All Forum Posts by: Ryan Nichols

Great thread idea.

I started practicing law at a big firm out of law school where everything revolves around the billable hour. A few months in, my mother (and only living parent) almost died in a car accident and was hospitalized for nearly a month. Numerous other health/wellbeing issues followed requiring my time and attention several hours away from where I live and work. A few years later, my only living uncle (divorced, no children, brother of my deceased father) developed an extremely rare terminal condition. We live in SC, but he spent weeks at Duke Medical Center and then Vanderbilt for evaluations of a possible life-saving surgery (didn’t pan out). All the time I spent at hospitals dealing with problems of the utmost importance in life, I was stressed over how my billable hours were going to look to my superiors that week/month/year. Somewhere along the way I decided that I wanted/needed to be in a position where, if needed, I could drop everything for an indefinite period of time for a loved one.

@Gail K. I’ve had the same experience in my area. Scammers copied my rental listing photos and posted a fake listing on Craigslist. One poor lady showed up after it was rented having already sent a money order somewhere. Sad there are lowlife people like that in this world that have no regard whatsoever for others.

As a few others have mentioned, there is little chance this would be covered by your title policy. If you didn’t get a new survey, the policy would have contained the standard survey exception. If you did get a new survey and this encroachment was revealed by the survey, there is no chance the title company would have insured over it, so the encroachment would have been excepted. Assuming the encroachment has been in existence for a number of years, the adverse possession argument may be your best bet/leverage point for negotiations.

@Jabbar Adesada. I doubt there is any lender that would let you be on title without being on the mortgage. The question is whether the lender is okay with you being on title without being on the promissory note and thus without being personally liable on the loan. You will almost certainly have to be a party to the mortgage. If you weren’t a party to the mortgage and the borrower were to default on the note, when the lender went to foreclose on the mortgage  you could potentially raise a number of defenses based on the fact that you weren’t a party to the mortgage, which would make things muddy. No lender is willing to take that risk. Thus, by making you sign the mortgage, the bank is basically getting you to agree in writing that they have every right to foreclose on the collateral if the borrower defaults on the promissory note. 

@Jabbar Adesada. You might be confusing the mortgage with the promissory note. It is perfectly legal for a non-borrower to be on title, at least in my state. Only borrowers go through underwriting and sign the promissory note (the document that actually lays out the terms of the loan (the loan amount, the interest rate, the maturity date, etc.)). However, any person or entity on title would be required to sign the mortgage. That’s because the mortgage secures the promissory note and gives the lender the right to foreclose on the property in the event the borrower defaults on the promissory note. Because a non-borrower on title has an interest in the property, all lenders will require every person/entity on title to also be a party to the mortgage. Some lenders may have policies against this (I’m not sure one way or the other), but I know some lenders allow it and that there isn’t anything illegal about it in my state.

@Jonathan Hernandez. I’m guessing you don’t currently have a contract? If you’re not under contract and that’s the only reason he’s unwilling to provide the rent roll, I can understand that. If that’s the case, use whatever information he provides for purposes of determining your offer price. Since this is a commercial deal, your offer should include a provision for “Seller Deliverables” (items that must be delivered within x days after the effective day of the contract. Typically 5 -10 days). At minimum, seller deliveries should include all leases, rent roll, third party contracts, etc. Additionally, owner’s delivery of estoppel certificates (google what these are and what they’re intended to do if you’re unfamiliar) from all tenants shortly prior to closing should be a condition to your obligation to close. Estoppel certificates may not be in the cards if he’s an unsophisticated and unrepresented seller, but if he’s not willing to provide the rent roll and leases once the property is under contract, you should be wary.

Here is the skinny. A nice couple with a young daughter recently applied for my listing. They passed the background checks, references and income requirements with flying colors, even though they are a single-income family, but neither met my credit score requirements. It appears the wife has just never really established any credit. The husband's credit score appears to have been hurt by student loan debt. The credit report shows he owes nearly $1,000 a month in total for all of his student loans and that several of the loans are in arrears. We discussed it and he told me that he has tried to work out reduced payment plans with the loan servicer but makes too much income to qualify for reduced payments but can't always afford to pay $1,000 a month and support his family, so he just started making lower payments. I sympathized with that situation and feel good about the fact that there are no other negative marks on his credit aside from those associated with the student loans. As such, after driving by the house they are currently renting and confirming it is well kept, I conditionally approved their application pending they would agree to an additional security deposit equivalent to two, as opposed to one, month's rent. They agreed, have set everything up to pay the security deposit and pro-rated rent for November through cozy.co and are planning to move in this weekend. Thereafter, recurring rent payments are scheduled to begin on December 1st.

Today, the wife contacted me and asked if I would be okay with them paying December's rent plus the $50 late fee on December 6th (I assume payday is on the 5th or 6th) because it would make things more manageable for them. However, she said they would make December 1st work if I wasn't comfortable with that.

Given the larger deposit, the upcoming holiday season, and their apparent willingness to do whatever I'm most comfortable with, I'm emotionally inclined to tell them I will waive the late fee just this once under the circumstances but that the lease will be strictly enforced moving forward. However, this will be my first rental and I realize that I could be setting a bad precedent by attempting to be nice here. With that in mind, I'm hoping to hear different viewpoints on how this situation should be handled. So now the question becomes, what would you do in this situation? Thanks for your input in advance.

@Davido Davido

What or who would prevent you from withdrawing those funds from accounts in your personal name? If the answer is you and you alone, which it appears to be, I cannot imagine a court finding that constitutes substantial limitations sufficient to prevent constructive receipt. No need to quote anything I said and respond. I don’t have a dog in the fight, just offering my opinion.

@Russell Brazil @Davido Davido

While I admittedly do not have any specialized experience in taxation law, I am an attorney and was required to take income tax in law school. I don’t remember all that many specifics and don’t have the time to look into them but all you really need to know is that Mr. Brazil is correct, and it’s really that simple. I take no issue with your creativeness or how you’ve managed to see an opportunity and potentially capitalize on it. That said, you need to bite the bullet and seek professional help to get the tax issue sorted out. In particular, on the legal side, you probably need to look for a lawyer that has an LLM in taxation law or either significant experience in that arena.

@Matthew Bailey 

It's not uncommon for terms or phrases used in a statute to be defined in one of the first sections of the Act in which the statute at issue appears. In this case, the subject statute, SC Code Section 30-2-50, is part of the Family Privacy Protection Act.  For purposes of this Act, "'[c]ommerical solicitation'" means contact by telephone, mail, or electronic mail for the purpose of selling or marketing a consumer product or service. ... ." S.C. Code Ann. § 30-2-30(3).

You're not trying to sell or market a consumer product or service, so this law shouldn't apply to a direct mail campaign.