Encumbrances are ties to the property, not the owner

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Michael Kayem is a Realtor with Re/max Estate Properties serving Culver City and the Westside since 2001.

Dear Michael: If I become the owner of a home property by a quick deed, am I responsible for any delinquent taxes?

Answer: That would most likely depend on where the property is located but the most common answer to that question is “yes.” Property taxes, mortgages, liens and other encumbrances are tied directly to the property, not the person that owns it. For instance, the IRS has the right to place a tax lien on your property if you are delinquent on your taxes.  That lien is then attached to the property.  If you quit claim your home to a relative, then the lien follows the property and your relative will have to pay the tax lien off when they try to sell the property. Never obtain a property without research.  At the very least, check the taxing authority, and any other entity that may have the right to lien the property. There may also be judgments and other liens attached to the property that you won’t find on your own and will become a problem.  They may not be your judgments but they will become your problem when you attempt to sell the property or get a mortgage on it. I recommend that you have a title company do a complete title search on the property before you have the property deeded to you.

Dear Michael: How can I get out of owning a timeshare? We can’t afford making the payments on it and to be perfectly honest, we have to prioritize our monthly bills.

Answer: By “get out,” I assume you mean you no longer want to own it? If that is the case, you will need to sell it. If there is a loan on it, you will either need to sell if for more than you owe, or bring the difference in price to the closing to fully pay off the lender. Your first step should be to talk to the management at the location. They will likely have a recent list of sales, prices, and potentially, the brokers that assisted in the sale. Find out what is involved in transferring the deed (if deeded) to another person. Often, there is a transfer fee. You do not generally have to use the broker, you can market and arrange for sale on your own if you prefer.  If you are selling make sure that the resort does not have a first right of refusal, or a right to buy your unit before anyone else. If you cannot make your payments, and cannot sell the unit, contact the lender to see if hardship payment arrangements can be made. Ask if it would be possible for a new owner to “assume” your debt to take it over without penalty, if you could find a willing party. Contact the resort to see if there is a way to make payments on your dues. Like being unable to fulfill any obligation, though, this method may have a derogatory effect on your credit. If you simply stop paying, a deeded unit will likely fall into foreclosure which is much worse than a workout above for your credit. The unit will be repossessed or reseeded, often to the resort, and you may be held liable for their losses in court or otherwise.

Dear Michael: I can no longer make the mortgage payments on my home. Are there steps I should take in order to turn in the keys to the bank and move on?

Answer: Have you pursued a loan modification to make it more affordable?  This is the first step to take if you want to remain in your home. Call your mortgage company’s loss mitigation department and ask for a loan modification. If you truly wish to walk away, call your bank and tell them you wish to do a deed-in-lieu of foreclosure.  This is less of a hit on your credit, although still a hit. You basically give the mortgage company your deed before they foreclose, saving you and the bank time and money. You also save your credit from having late payment recorded on it, on top of the foreclosure. The bank will send you the proper form to execute and you will be all set. Think about it very seriously before going forward. There is no turning back!

Michael Kayem is a Realtor with Re/max Estate Properties serving Culver City and the Westside since 2001. You can contact Michael with your questions at 310-390-3337 or e-mail them to him at: homes@agentmichael.com

 

 

Encumbrances are ties to the property, not the owner