All Forum Posts by: Tom Gimer

The assignment did not release the original contract purchaser from liability unless the seller expressly consented to the assignment and fully released them (a novation, in effect)… which is not part of the fact pattern.

So the agent is right.

Title work, yes. Not legal work though... thanks for asking.

Of course and I never suggested otherwise. But if the docs give you the right to start charging default interest, force release of the lien etc that is at least some leverage, control. 

@Joe S. You're going to need to pull local mechanics lien laws to determine whether a vendor needs a written contract with the owner in order to record a lien. Some states laws say for non-owner occupied property, the vendor doesn't need a written contract.

That said, in the absence of a written agreement if the lien is to be based upon the reasonable value of services provided, that $9k estimate seems like a good starting point.

You can include in the definition of default the creation of an additional lien (either voluntarily or involuntarily).

KeyGlee was planning to double close here. The agreement specifically allowed KeyGlee to use the End Buyer's EMD to secure the underlying contract with the actual seller... and to forfeit that EMD if the End Buyer failed to close. That sounds like what happened here. I would be surprised if there weren't notices given to both the defaulting End Buyer (You're in default, you must close by X date or we're forfeiting your deposit) as well as the escrow agent (Buyer defaulted, see contract Earnest Money paragraph regarding release) prior to that actually occurring. If those things did not occur, some regs may have been violated by licensees.

Regarding marketable title, unless the "liens" were in excess of $255,000 IMO there would not be an argument that the seller could not deliver marketable title. And, even if the liens were in excess of $255,000, the seller could bring cash to close and deliver marketable title.

No. The property would be transferred to a trust and at settlement you would be selling your interest in that trust. 

As a seller I would be considering offers other than subto, for sure.

Yes, having the court impose a constructive trust on the assets is the remedy for a claim (under these circumstances) for unjust enrichment. 

What they want to do is have the property transferred into a trust (days, hours, minutes) prior to settlement. The declaration identifies the would-be buyer as trustee; and the current owner as the beneficiary of the trust. At settlement what is sold is the beneficial interest in the trust rather than the property itself.

On paper the lender just sees a common estate planning tactic rather than a sale of the property. But what is being proposed is nothing more than an effort to avoid implication of the due on sale clause. This may actually be the best method to prevent the sale from being discovered, but of course there are other potential pitfalls.

Under federal law a transfer to a trust where the grantor retains the beneficial interest WOULD be exempt from the DOS... but notice how in the context outlined above the exemption would disappear.