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What would you do, property sold with outbuilding not paid off?

So my brother in law bought a property two years ago which included a huge outbuilding with power and water as well as the main house.  It was listed on the mortgage and insurance papers as well as all of the advertising for the property. Well now apparently he finds out the outbuilding isn't paid off, the seller had it via a rent to own company. I feel the real estate company is partially at fault since they should've looked into this, and the seller definitely is at fault. The outbuilding company is trying to repossess it now... two years after he bought the property. Apparently he found out the seller was making payments on it until recently, now he refuses to pay or return calls. The seller moved multiple states away so he isn't easy to contact. What would you do in this situation?  

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  • 3 months ago
    Favourite answer

    If he got title insurance when he bought the property then maybe that'll cover his losses. Beyond that I doubt he has any recourse against the real estate agent unless he can prove they knew about this problem (very unlikely).  Of course he has recourse against the seller but good luck with that, since the seller is now a few states away (ie its now difficult to serve unless you can catch the seller when he is in town, or somehow trick him into coming back to town to serve him notice).

    Nonetheless, if the deed listed this building or even suggested that this building was included in the sale (ie said he gains ownership of all buildings on the property - even if stated in general terms) then I'll bet the title insurance would haver to cover this, if he got title insurance (if not, he's pretty much screwed).

    Try calling the closing agent who handled this sale and ask them if the title insurance would cover this.  Even if the closing agent says no, he might consider talking to a real estate lawyer to see what they think.

    • Camsery3 months agoReport

      Thankfully he did get title insurance, very thorough answer. Thank you 

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  • 3 months ago

    I would consult an attorney as you're describing what could become a very complicated situation.

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  • Eva
    Lv 7
    3 months ago

    Did your brother in law purchase title insurance? If so, he needs to talk to them first. If the balance left on it isn't that much he could pay it off and sue the seller. It is not the real estate agent's responsibility to know how much is owed on the property.

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  • Judy
    Lv 7
    3 months ago

    The title company your b-i-l used for the purchase should have caught it. He should contact them.

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  • 3 months ago

    Why would the realtor have ANY responsibility?  The realtor is NOT your brother-in-law's lawyer and has no legal responsibility toward his client whatsoever, except what falls with real estate agent laws and responsibilities.  How much equity is in the building has NOTHING to do with the realtor, whose ONLY responsibility is to sell the property.  That, the realtor did.  If your brother did not want to do due diligence on the property he was planning on buying, then why didn't he hire a lawyer to do it for him?  A lawyer would have taken care of all that and made sure that the money was transferred properly and that the out building was paid off, as it should have been upon the purchase.  Your brother-in-law has a choice.  1) He can pay off the seller's lender to avoid a foreclosure or 2) He can do nothing and be foreclosed on and evicted.  If he chooses no. 1, he can sue the seller but he would do better this time by hiring a lawyer to do that.

    Source(s): Certified Paralegal, with 25+ years' experience.
    • Nuff Sed
      Lv 7
      3 months agoReport

      A realtor who published a false advertisement may be in hot water.

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  • 3 months ago

    tell the outbuilding people to pound sand,

    I doubt they will have any case?

    I';m sure the title company did a lien search on the property. and found nothing.

    this is actually a really good question.

    • Nuff Sed
      Lv 7
      3 months agoReport

      The rental company didn't sell its property, so it can repossess when it wants to.

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  • 3 months ago

    If they are still in the US...they can easily be contacted...you just cannot confront them face to face.  

    You're going to need to talk to your attorney about this situation...period.  We cannot help further. 

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  • 3 months ago

    Call my lawyer asap.

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  • Anonymous
    3 months ago

    This is what a title insurance policy is for.  

    Sounds like it's time for BIL to talk to an attorney.

    Just curious...is the outbuilding on a separate tax parcel or is it sitting on BIL's tax parcel?    Does it have separate water and electric meters?

    Let's say someone else owns the outbuilding and it's sitting on your brother's tax parcel that he owns.  Is there any kind of easement that requires your BIL to allow them to use his property to get to the outbuilding?   An easement would have been seen on a title search.   If there is no easement, wouldn't they be trespassing if they have to cross BIL's property to get to their building? 

    If they don't own the land the building sits on, are they leasing the land?   I mean, you can't just plop your building on someone else's property for free.   If they don't own the land, couldn't BIL tell them to remove their eyesore of a building unless they're willing to pay rent?  

    If there's a separate tax parcel for the outbuilding and the land it sits on, it's possible that BIL didn't actually buy it.

    It's also possible that the seller didn't actually buy it in which case it wasn't theirs to sell.

    This whole thing sounds weird.  Time for an attorney.

    ETA:   Thanks for the additional info.  This whole thing sounds weirder and even more implausible all the time unless the outbuilding is a non-permanent structure that wasn't stick built on the property.    If they want to "repo" the outbuilding, I'd be tempted to tell them "Fine, take it the hell off my property, but I'm going to charge you $(insert amount here) to access MY property to remove it, or I'm going to charge you $(insert amount here) month rent to keep it here.   Or you can gift it to me and pay nothing.    Your choice." 

    So...is the outbuilding a permanent stick built structure built with a proper county permit or is it a metal pole building/mobile/modular type thing?   The plot thickens...

    • ...Show all comments
    • Camsery3 months agoReport

      Oh, to add to this. He did a rent to own apparently with the outbuilding, his name is on the account. He just stopped making payments about 4 months ago and that's when my BIL found out that it wasn't paid off (repo guy visited). Talk about a shock

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  • 3 months ago

    If the outbuilding company has a legitimate claim then your brother in law either pays it off or loses it.  Also, I've never seen a mortgage specify what's included in the mortgage.  And title insurance probably won't help because unrecorded liens are not included in the coverage.

    • Nuff Sed
      Lv 7
      3 months agoReport

      I have never seen a mortgage that does NOT "specify what's included in the mortgage".  That's the whole point: the say what the property is that is the collateral for the loan.

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