All Forum Posts by: Tom Gimer

What hasn't been provided yet is some suggestion that the title company missed something material that should have been discovered. That something is the following requirement (or similar):  "... if a notice, describing any part of the Land, is recorded in the Public Records setting forth the violation or intention to enforce, but only to the extent of the violation or enforcement referred to in that notice."

Maybe post the plat reference or a link to it, along with the legal description in the deed.

Sure it doesn't hurt to file a title claim but I would be focusing on the seller hiding the issue. A title claim even if covered is not going to reimburse for the $100k reno or pay for any of the items the city is now claiming must be done to approve the subdivision.

@Greg Loberg I have experience working with them but on the title side.

They're based in Martinsburg, WV. Small shop, good people.

@Jay Hinrichs @Chris Seveney The deed was recorded, so the buyer owns the land as agreed. I don't see how a title claim would be successful here unless there was a violation or other notice recorded prior to settlement. I'm sure @Peter Walther will correct me! Notice I didn't use definitive language.

Since GA is a caveat emptor state this would seem to be a buyer due diligence failure. Although it could be considered a material defect (adverse impact on value) leading to seller liability.

@Karen Reyes-Arenas This is a contract matter and nobody can answer the question properly without reviewing the actual contract language. Post-settlement occupancy agreements usually deal with issues in addition to rent/holdover, such as physical damage to the property. There are often dates for providing information to title, and sometimes automatic release provisions for when a party does not timely provide the information. If this agreement was not drawn up properly, the title company may feel like the contract does not address the situation.

That said, the answer may be buried in the fact pattern... the title company doesn't have an in-house attorney so they may not know what they can legally do. There are many title companies who don't have the confidence to make a decision based on the facts in front of them and instead require joint written instructions for everything relating to escrows.

Obvious answer: sell it

Reason: subto is not a viable long term hold solution

@Carlos Ptriawan @Jay Hinrichs Residential ground leases in Maryland (Baltimore City mainly but also surrounding counties) are typically 99-year leases renewable in perpetuity, meaning as long as the rent continues to be paid the lease is automatically renewed for 99 more.

No pay or slow pay and you can loose your leasehold property.

You can "redeem" the ground (well except for "irredeemable" ground rents, but those are quite rare and another story) by buying out the owner of the fee simple interest a cap rate formula based upon the date the original lease was created. So to buy out an $84 annual lease created in 1900 you would divide the rent by 0.06 = $1400. A ground rent redemption deed is executed and recorded, extinguishing the ground rent and making the land fee simple... the fee and leasehold interests having been "merged".

There is an entire industry surrounding ground rents: buying/selling (often in bulk), servicing, collecting, ejectment actions for non-payment, GRR deed prep, etc. There are actually 2 chains of title on leasehold properties... one for the leasehold interest (transferred by assignment) and one for the fee (transferred by deed).

When you get a decision like this followed by appeals it is no-mans land for title insurers. They'll just so "no thanks" until the law is settled and then evaluate new business policy in that context.

The good news is that a change in the law would only affect future and pending sales... the bad news is OP is pending.

@Jay Hinrichs @Peter Walther You two should pull some Maryland ground leases from the 1800s and get back to me about how much you love the handwriting. It can be guesswork.

@Devin Dull If you do nothing you should expect to become the defendant in a lawsuit for a constructive trust and have your account frozen, among other things.

This is inaccurate. The first mortgage holder is not even a party to the subordinate lien foreclosure action and thus the first lien is unaffected.

The internet (and BP) is full of stories from people who overpaid at the foreclosure of a junior (second trust, HOA/COA lien), etc... not realizing they were then taking title subject to the senior.