You Can't Make This Stuff Up
One of my clients owned some property in another county. About 20 years ago, they sold it to a couple. They agreed to finance part of the purchase price. They took back a deed of trust lien to secure the debt. Everything went along fine until the debtor just quit paying.
Not too long ago, my client told me that the debtor had not paid the note and that the taxes were also past due. Because the property was in another town, I contacted a lawyer to handle the matter. I sent this lawyer’s contact information to my client and thought that the matter was under control.
This morning around noon, I received a call from my client. The call went to voicemail. I was busy with some deadlines and did not get the message until after lunch. In the voicemail, she told me that she had been served with a lawsuit for unpaid taxes on the property and that she thought that the answer date was next Monday (3 days from now).
Of course, I panic and go into high gear. I have almost no information about the property, the loan or anything else. Besides, I am not 100% sure that she has a deed of trust or whether she still owns the property and used a contract for deed. People often get confused between these two.
As you might guess, I call her but am unable to reach her. When I finally got her on the phone, the connection was bad and I could not understand a word. I am beginning to get a little worried that I will need to take a field-trip very early Monday morning to show up at the hearing.
While I am waiting to talk to her, I checked around and found what I thought was the correct property. I might be wrong, but it looked logical. There was a deed of trust and a deed. That meant that I should not have to worry about a contract for deed . . . unless I have the wrong property.
I used this information to look up the tax records. I am immediately confused by what I find. I thought that there was a house on the property, but the tax district does not list any improvements.
When I finally talk to my client, she tells me that her brother told her that the house burned down. It’s hard to belive, but it gets better.
While I am trolling for information about the property and the taxes, I checked around to see if I could find anything about the debtor: an address or some other useful information. In the process, I found several news stories about a man with the same name as our debtor who was arrested several years ago. It appears that he was staying in a motel and he brought along a mobile meth lab. The van caught on fire and ended burning down the motel. As you can imagine, he ended up going to jail.
Maybe that is what happened to the house. We can only guess. You can’t make this stuff up.
The good news is that the answer date – the last day to file an answer in a lawsuit – is at least 10 days in the future, or possibly longer. We have some time to react and make some calls.
The bottom line is that the total taxes and estimated cost of the foreclosure probably exceed the value of the property. My client ends up agreeing to let the property go. She can sign an In Rem judgment (which means that there is no personal liability) and the county can have the property.
So much for the list of things that I needed to do this afternoon.
William M. Bell, Jr.