By Ilyce R. Glink with Samuel J. Tamkin
Saturday, November 29, 2008
Q: My fiancee has her name on three mortgages for two commercial buildings with her ex-husband. According to the divorce decree, her ex-husband has until August 2009 to refinance the mortgages.
He wants to do an assumption, which would not take away her liability. He had her sign something last weekend, which in theory says that the lenders have agreed to take away her liability from one of the properties.
I don't trust her ex-husband, and I have no idea what she has signed. Can you shed some light on what she may have signed
AI have no idea what your fiancee signed. But I hope she read the document thoroughly and had her lawyer look at it first. But I'm guessing that neither of those things happened, which is why she can't explain to you what her liability is or will be.
You didn't ask this question, but I'll throw out another piece of advice: You should make sure you understand everything there is to know about your fiancee's finances and her responsibilities and liabilities on these (and perhaps other) properties. It sounds as if she has a financial liability when it comes to these properties but may not have an ownership interest in them.
If she was careless enough to sign a quitclaim deed, giving her ownership rights to her ex without him securing new financing that would relieve her of any liability, that would be a big red flag: She may either not fully understand what this means or not care enough to secure her own financial future.
If I were you, I would want to make sure I understand what her financial obligations are, what she owns and what problems could arise from these obligations.
I am a cosigner on a mortgage. Will a quitclaim deed remove me from this debt?
No. The debt will remain but a quitclaim deed will take away your ownership interest in the property.
I have a house with a recent appraisal of $110,000 that my friend would like to buy. He has a house with a tax-assessed value of $150,000 that I want to buy.
I owe $55,000 on a private loan for my house. We would like to mutually reduce our asking prices by about $50,000 to make our houses that much more affordable. So, technically I would need a loan of just $90,000, and he would need a loan of just $55,000 to pay off my mortgage. How can we structure this?
If I tell an appraiser I'm buying it for $90,000, wouldn't that make the "market value" of the property $90,000? I don't want the future value of the home to be reduced just because I'm buying it at a lower value than anybody else could buy it for right now.
Please talk to a local real estate lawyer about arranging a swap of property. There would be a value assigned to each piece of the property, and you would accomplish this with paperwork and at an official closing. The lawyer can advise you on how to obtain financing.
Just keep in mind that the tax-assessed value in some places may not reflect what a property is actually worth in the market. You and your friend may need to do a little additional work to determine what the two properties are worth.
In some states, when you exchange properties, you save some money in the transaction fees relating to the sale or purchase of that property. In other states, the swap of properties won't save you anything.
I just bought a townhouse. I introduced myself to the head of the homeowners association, who welcomed me and then sent me information about an emergency meeting to vote on street repairs that would cost each homeowner $1,200.
The letter came two weeks after my closing. I called her, and she said that the sellers had known about this since the beginning of the year and that the last notice that went out about it was in July.
The seller did not list this home for sale until August, maybe even September.
What recourse do I have? This is something that should have been disclosed to me, right?
Did you ask the seller specifically about any special assessments coming? Did you request homeowners association board minutes from the past two years? Did you request a copy of the association budget for the last full year plus the projected budget for the current year?
Your lawyer or your real estate agent should have suggested that you get this information before you made an offer.
That said, sellers have an obligation to disclose material facts that are hidden. An announced project could well be considered public information that would not fall under the seller disclosure rules. So I'm not entirely sure that the seller had a legal responsibility to share this information with you.
Many real estate contracts have certain representations by the seller relating to homeowners association issues. Do you know if the seller made any representations about the association in your contract? As a home buyer, you have an obligation to find out everything you can about the property before you sign the contract, and certainly by the time you close on it.
I'm not saying the sellers or their agent shouldn't have shared this information -- and if you asked them specifically about special assessments and they didn't disclose it, then you might have a seller-disclosure case.
But if you never asked them about it and you never asked for association minutes or building or development budgets, then I'm not sure what legal options you have.
You can certainly go back to your agent and ask why he didn't know about this -- or if he knew it, why he didn't share it with you. You can also talk with a local real estate lawyer to see what options you may have.
Ilyce R. Glink is an author and nationally syndicated columnist. Her latest book is "100 Questions Every First-Time Home Buyer Should Ask." Samuel J. Tamkin is a real estate lawyer in Chicago. If you have questions for them, write Real Estate Matters Syndicate, P.O. Box 366, Glencoe, Ill. 60022, or contact them through Glink's Web sites, http://www.thinkglink.com and http://www.expertrealestatetips.net.
© 2008 Ilyce R. Glink and Samuel J. Tamkin
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