All Forum Posts by: Chris K.

@Mary Jay

At least in Pennsylvania, it probably doesn't make a difference. As a practical matter, most folks in Pennsylvania just stick with a special warranty deed. If I'm the buyer (or representing the buyer) and I'm drafting the agreement of sale, I do ask for a general warranty deed. But in this scenario, I have a hard time envisioning a situation where it would really help you. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Amy Canfield 

Ask them to define what they mean by "collection actions." It seems to introduce an ambiguity that I don't think will help either party. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Zach Robbins

I'm in a similar situation as yours. In my situation, I use multiple CPAs and tax professionals. I have one main CPA that handles taxes for me personally and for my main business. Then I have other CPAs that handle some of the simpler items like dealing with K-1s and smaller rentals. We have a CPA that specializes in sales and use tax matters as well. It also happens to be easier given the fact that many of my investments and businesses have multiple owners. It keeps it easier to respect the formalities of all these different ventures. 

For the sake of self-reflection, you may want to ask whether you are coming prepared for the discussions with the CPA. When I first claimed the "real estate professional" status, my CPA firm and I had to spend a decent amount of time confirming whether I do indeed qualify. I did a lot of research on my own to find caselaw that was on point and shared it with the CPA. That made their lives easier and they were comfortable giving a "blessing." 

It's also helpful if you approach them during the time periods where they are not pulling 80 hour weeks. You may also want to explicitly tell them "Hey, bill me for your time but could you please look into something." Not to be cynical, but telling a professional that I want to pay them to think for me is a good way to make sure they pay attention. 

Note that different CPAs have different philosophies on how much risk they want to subject their clients. For example, I'm a lawyer, business owner, and investor. What I feel comfortable doing as a business owner and investor is not necessarily what I would recommend to a client when I'm working as a lawyer. That's especially true if I don't have faith that the particular client can necessarily handle all the consequences of the idea blows up. So my advice to a retiree with one or two rentals is going to be drastically different from a high net-worth person who has been battle-tested in the business world. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Kalman G Szabo

So in my old days as a full-time lawyer, I would just reach out to one of the solicitors for the Department of Revenue if we had a "tricky" situation. If you work with a lawyer that does a lot of estate work, they typically know who to contact. 

In terms of escheat, my guess is that it probably won't count as an inheritance tax payment --- at least at a practical level. That's something I would have to look into. I say as a "practical" matter since most people just want a marketable title and move on as quickly as possible. From a practical perspective, most of dealing with the Department of Revenue (or the IRS) involves finding a living human being with a decision power and negotiate it from there. The solicitors from these agencies tend to be responsive when an attorney asks a question. I'm not sure what the success rate is for non-attorneys.  

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Chaithra Kumar

Sorry, I can't say I know any construction companies in that area. I have contacts with national GCs (e.g. Gilbane) but they will likely be too expensive for a smaller project. I would ask @Ben Leybovich but he left the area for warm weather in Phoenix, AZ. :)

If you want general advice regarding new construction projects, I would be happy to answer any questions. I worked as a real estate lawyer for such projects and also own construction companies. So I have some experience in the realm. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Kalman G Szabo

The foreclosing party really has no duties to notify anyone except the mortgagor. The buyer takes all the risks including all the issues that can be caused by a foreclosing party that has no idea what it is doing. 

In your particular scenario, maybe the amount set aside for the Commonwealth is enough to pay the inheritance tax associated with the property. Maybe it doesn't. No one knows until you open up the estate. It's why many people just pay it off so that they can get a marketable title and continue with their investment plans. 

As @David Krulac said, foreclosures sales and tax sales carry way more risk than an average transaction. You can get lucky but you can also easily end up with a property that gives you headaches for the next several years. If you see folks who really do this at a large scale, they understand some of the properties they buy will end up being a dud. They try to cover those losses by having a home run. It is what it is. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Peter Walther

Well, it's draconian in that I don't think they will win if a case actually ended up in the appellate courts. There's really no basis for them to take the position they are taking. 

Also, I read that part to mean situations where the mortgagee ends up with the property after the foreclosure sale. That's very common in Fannie/Freddie/FHA situations since the Feds set the upset price. If the property is trashed, then maybe it makes sense to claim a lower amount. But the fact that you bought it at a bargain doesn't mean that the Commonwealth will budget on the inheritance tax amount.

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Chaithra Kumar

Where is the land located? 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Eric Schrader

I would reach out to them to see if you can work something out. Or hire a lawyer to do it for you. My guess is that they will probably forgive on the default if they hear from you. But if not, it would make sense for a lawyer to review your loan documents and try to negotiate a settlement. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Matt Tallent

There's no real natural appreciation in Scranton. But you can cash flow if you buy it correctly. So a classic tertiary market. 

Note that Scranton itself has higher taxes compared to the surrounding municipalities. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.