Property has lien and adverse possession claim filed

TN · Member since 2019 · 9 posts · 0 votes

I recently purchased a property in a foreclosure that I could literally profit up to 80k or more. It has a few cosmetic issues on the outside with no idea what's going on with the inside. the other little detail, it has a tenant that's been living there for over 11 yrs., since the original owners abandoned it due to their financial difficulties. They don't want to move, and has a lien and adverse possession claim against the property. I made them a $6k offer, cash for keys, but they're asking for five times that. I'm already in for 150k, what do I do???

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Tom GimerBusiness Member

DMV · Member since 2017 · 3k+ posts · 3k+ votes

Evict the tenant. If they had permission to be there, their AP claim is fruitless. $6k will start looking pretty good once the sheriff shows up.

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Tom GimerBusiness Member
DMV · Member since 2017 · 3k+ posts · 3k+ votes
7y
Evict the tenant. If they had permission to be there, their AP claim is fruitless. $6k will start looking pretty good once the sheriff shows up.
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Kevin Sobilo
Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes
7y
Research the adverse possession laws in your state and consult a lawyer. In my state I believe 21 years of adverse possession (open use without permission) before such a claim can be substantiated.
I also agree with @Tom Gimer, if they were originally tenants, then they had permission to be there and if that permission was never revoked the possession may have never been adverse at all!
I would consult a lawyer, I wouldn't offer them anything until I had legal advice.
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Mark Fries
Contractor · Jacksonville, FL · Member since 2017 · 1k+ posts · 2k+ votes
7y
@John Smith
Seems like you did a poor job of research before your purchase because a quick online search with the court you could have discovered this adverse possession filing....this could get nasty for you...
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Davido Davido
Rental Property Investor · Olympia, WA · Member since 2012 · 543 posts · 311 votes
7y
@Account Closed is correct. "$6k will start looking pretty good ...." if they can see the reality of their situation. But the $6000 should be for moving now. Once the sheriff shows up it's already over for the squatters.
So, prepare an Eviction notice, a Law Suit and an alternative residence, truck, and movers. Then try to be the squatters friend and help him/her take your $6000 and help him "do the right thing". Commiserate with the squatter on how much you'd rather have him/her get your money, then to waste it all on a dirty rotten lawyer. If you are kind and well prepared, the squatter will feel overwhelmed. Just be ready to move them quickly during their moment of weakness. Few things are as changeable as a squatter's emotions/commitments.
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Account Closed
OP
TN · Member since 2019 · 9 posts · 0 votes
7y
Found out the original owners abandoned it, then 8 years later, tried eviction process and lost. He's saying he been to court 5 times, and each time he's won possession, against the original owners, the bank did a voluntary dismissal without prejudice in their lawsuit and sold it to me, really while the case was going on in court. They've been there for 13 years, they have a lien against the property for 58k and the the adverse possession claim. The sold me out on this one. They couldn't win in court and sold it to me at the same time. I strongly believe they prove having an Equitable interest in the property. Eeven if I give him 40k, I can still profit, a little over 60k. What should I do?
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
give them the money and move on..
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Account Closed
OP
TN · Member since 2019 · 9 posts · 0 votes
7y
The bank and their attorney were very bogus and unprofessional, from viewing the documents. The bank's attorneys had a problem, they never provided proof of ownership. They tried to ignore the claim in general session court, but once it got into Circuit Court, the bank withdrew their lawsuit, leaving the people still living in the property and having a lien and adverse possession claim filed against the property. The bank ran away from it with all their attorneys, what am I supposed to do? I'm stuck.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
your descriptions of the transaction are a little confusing.
did you say U bought from a bank.. and that it is now coming to your attention there is a 58k lien. so did U not get title insurance when you bought ?? Adverse claims are pretty tough things to get done for the average person..
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Davido Davido
Rental Property Investor · Olympia, WA · Member since 2012 · 543 posts · 311 votes
7y
@Account Closed, Can you bring some clarity to your posts? What did you buy from the bank? And what are the grounds for the squatters claim that they are owed $58,000?
Did the Bank assign its interest to you? (Giving you the right to foreclose?) or did you "purchase the property" at a foreclosure auction as indicated in your original post? If you bought it at auction then you have title to the property and should start eviction. Post a photo of your documents.
However, if the bank "never provided proof of ownership" (I think you mean the original mortgage document), in its filings with the court, then the bank may have sold you nothing. Sounds like a fun project, but unless you can clarify what you are involved in, the rest of us will be as lost as you are.
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Account Closed
OP
TN · Member since 2019 · 9 posts · 0 votes
7y
Yes it was purchased in foreclosure. I had an abstract title performed and they said everything was fine. But we're now seeing this popping up. Looks like they've already had a claim for a couple of years ago against the property before the bank ever showed up. And their seems to be some fraudulent activity with the bank. They thought, by withdrawaling of their lawsuit and selling it to me would dismiss the person's claim.
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OP
TN · Member since 2019 · 9 posts · 0 votes
7y
One case against the property the court, found the original owners of trying to commit fraud upon the court. They loss the case, possession was awarded to the people living in the house. That means the original owners, signed off rights they didn't have in an assignment of the loan. In Which the mortgage service in turn, then assigned to the bank. At one time on Register records, the bank attorney was the grantor and the grantee, and made themselves the substitute trustee. They've already got a countersuit filed against my detainer warrant, listing all the things I'm sharing. Do I pay these people or spend potential profits fighting? Remember I can pay them almost what they want and still make a nice profits.
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OP
TN · Member since 2019 · 9 posts · 0 votes
7y
The bank really didn't have any interest to assigned, because there's no leases for either side of the duplex.
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Deanna O.
Rental Property Investor · San Diego, CA · Member since 2010 · 366 posts · 314 votes
7y
It almost sounds like you could pay the occupants what they want, and also sue the bank for fraud.
If what you say is accurate, it seems the bank KNEW they were selling you a bad note, which is a pretty serious breach of conduct.
Maybe pay the current occupants, then find a lawyer willing to work on contingency & go for a fraud suit? Obviously read your paperwork first...carefully. Twice.
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Tom GimerBusiness Member
DMV · Member since 2017 · 3k+ posts · 3k+ votes
7y
@Deanna O. Throw in a claim against the abstractor/title search company as well. If they had done their job correctly they would have pulled all the prior cases and nobody would have touched this sale.
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Davido Davido
Rental Property Investor · Olympia, WA · Member since 2012 · 543 posts · 311 votes
7y
@Account Closed, I'm sorry to be having difficulty connecting the details of the story here. You inform us, "Yes it was purchased in foreclosure." But that could mean you bought your duplex at a foreclosure auction. In which case you should have title to the property. Alternatively, the comment, "Yes it was purchased in foreclosure", could mean that you purchased the bank's interest in the property before the banks foreclosure was complete. That is why I asked, "Did the Bank assign its interest to you?". If you purchased the bank's interest in the property then you do not own the property. In this purchase the bank sells (or assigns) its interest in the mortgage to you. That would mean that you own the banks mortgage and its right to foreclose, but you do not yet own the property.
Another alternative is that, "Yes it was purchased in foreclosure" could mean that while the foreclosure was being processed, but before the foreclosure auction was held, you bought the property from the owner who was being foreclosed upon. From your posts we can conclude that is not what happened because your posts indicate that the bank is now done with the property. If you had bought only the previous owner's interest, you'd still owe the bank what was left on the mortgage and still face the banks foreclosure.
Sounds more and more like you purchased only the banks interest, which means that you do not yet own the property, -just the banks right to be paid. That would mean you must now complete the foreclosure yourself, and that you can not evict the current occupant because the property is not yet yours. You might be able to get a court to order the property vacated while the foreclosure is pending though.
The bottom line is that from what is posted here, we really do not know what you bought. You could clear that up in an instant if your are willing to, "Post a photo of your documents." However, I realize that posting private or confidential documents is not always a good strategy in a public forum.
John, We also have very little insight into the substance or source of the I current tenants claims to possession or their lien. Please share your understanding of the lien. When was it filed and what was the lien for?   Do you realize that anyone can place a lien on your property, for any reason or no good reason. The existence of a lien does not mean it is legitimate or that a court will require it to be paid. If this lien is from people who are squatting, it is suspect.
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OP
TN · Member since 2019 · 9 posts · 0 votes
7y
The original owners abandoned the property, after 13yrs later, they tried to come back and claim it. After losing in court to the people living in the property, they signed their rights over to the mortgage service company, but they had no rights to give.
The property was foreclosed on by the mortgage service company, and the bank claim to have purchased it from them, which was only a assignment of the loan to the bank.
So the property was assigned to / purchased by bank and then sold to me while the bank attorneys, were still in litigation in court with the people living in the property. The bank had filed a summary motion in Circuit Court, the people living in the property filed a answer to their motion, and the judge ruled it would go to trail. That's when the bank filed a voluntary dismissal without prejudice motion and the judge granted the dismissal of their lawsuit. I filed a detainer warrant to try and get them out, they counter sue. Do I still own the property??? I had a title search done, but none of this was mentioned, I've been tricked or confused by the bank's realtor. What can I do? I can't share the documents, because I'm still in court.
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Greg H.Pro Member
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Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
7y
@Account Closed
With each post this becomes more unclear
So the Original owner had a mortgage. Did they sell 13 yrs ago subject to the mortgage ? If no, what did they return to sue for ? You say they assigned there rights....I assume their rights under the mortgage/deed of trust to foreclose on the subsequent buyer?
So there was not a foreclosure on the original note....just the SUB2 ?
My guess is at best you own a first lien that you need to foreclose on
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Deanna O.
Rental Property Investor · San Diego, CA · Member since 2010 · 366 posts · 314 votes
7y
SOMEONE was making payments on the mortgage all these years, right?
It almost sounds like the occupants tried to get out of the mortgage by filing under law of adverse possession, while the bank tried to make an end run around the court by withdrawing the lawsuit & selling the property in foreclosure. I'd deal with the occupants very cautiously. (and sue the bank for fraud).
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Account Closed
OP
TN · Member since 2019 · 9 posts · 0 votes
7y
No payments were made now or during the course of the 13yrs the occupants lived there. The occupants never had a mortgage or rent to pay to anyone. I'm totally bummed out about this, I made a few mistakes purchasing this property and now, I really don't know what to do.
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Greg H.Pro Member
Moderator
Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
7y
And just like that, the OP is gone. There has to be a lot more to this story!!
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Jerry N.
Chicago, IL · Member since 2016 · 172 posts · 38 votes
7y
I"m guessing that you didn't get a title search or insurance? Advice to everyone, even if you buy off market, owner finance or want to try to get something at auction. Depending on the situation, you may not be able to get title insurance, but paying for the search if you don't know how to do it can save you $ and headache.
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