Breaking News Bar
posted: 6/2/2013 1:00 AM

Sign away your property ownership at great risk

hello
Success - Article sent! close
 
 

Q. I have been trying to sell my condominium for more than two years. I have been contacted by a guy who will pay me what I want. The problem is his credit is not very good and he has filed bankruptcy once, so he can't get a loan.

He has proposed giving me $1,000 and signing a note and mortgage for the balance. The note would balloon in 5 years. He would pay me monthly the principal and interest on the note plus one-twelfth of my real estate taxes plus the association dues. As the property has been vacant for over a year, I am very tempted. I'm wondering what I'm in for if things go bad and what I can do to protect myself the best I can.

Order Reprint Print Article
 
Interested in reusing this article?
Custom reprints are a powerful and strategic way to share your article with customers, employees and prospects.
The YGS Group provides digital and printed reprint services for Daily Herald. Complete the form to the right and a reprint consultant will contact you to discuss how you can reuse this article.
Need more information about reprints? Visit our Reprints Section for more details.

Contact information ( * required )

Success - request sent close

A. The first thing you can do is not convey the property to him and take back a note and mortgage. In the event this transaction proceeds as your purchaser is proposing, he becomes the owner of the property and you become a mortgagee. As such, you will be subject to the statutes that control all mortgages in this state.

In the event your purchaser takes possession and then fails to make any further payments, it will most likely be at least a year before you recover possession of your property. This is because mortgagors enjoy what is known as the statutory redemption period, which is the later of three months from the date a judgment for foreclosure is entered or seven months from the date the mortgagor is originally served in the foreclosure lawsuit. This means the mortgagor (your purchaser) has until the end of the redemption period to "redeem" the mortgage. You cannot dispossess him until the redemption period has run.

Add to the above the fact that you will be required to retain an attorney to file and prosecute the foreclosure case. And, the time of recovery gets even longer in the event your purchaser decides to fight your foreclosure case.

A much better avenue would be to enter into Articles of Agreement, otherwise known as an Installment Contract. In this type of transaction, title is not conveyed to the purchaser. You enter into a contract that states what the purchaser will pay you monthly and on what date the purchaser must obtain other financing and pay the balance due you. In the event your purchaser fails to comply with the terms of the agreement, terminating the installment contract and recovering possession of the property is far easier and less time consuming than if you conveyed the property and took back a mortgage.

I would strongly suggest you retain an experienced real estate attorney to prepare the paperwork, as you must be careful in creating the terms of the agreement. If an installment contract is not created properly, it can be construed as a mortgage, which then subjects you to the rules regarding mortgages.

Q. I received something called a "10 Day Notice" from my landlord. The notice says my tenancy is terminated in 10 days. Does this mean I will be evicted in 10 days?

A. No. 10 Day Notices are usually served on tenants due to their failure to comply with terms of their lease, other than payment of rent. Typically, 10 Day Notices might be served for excessive noise or violating pet restrictions.

Once the 10 days runs, the landlord would be entitled to file a forcible action and detainer (eviction) lawsuit against you. If you wish, a trial would be held to determine whether or not the landlord had a sufficient basis to serve the notice. If the court finds in favor of the landlord, you would be given time to vacate the property. In the event the landlord cannot establish that you violated the terms of your lease, your tenancy would continue for the duration of the lease.

• Send your questions to attorney Tom Resnick, 345 N. Quentin Road, Palatine, IL 60067, by email to tdr100@hotmail.com or call (847) 359-8983.

Share this page
Comments ()
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.