In Libby Rogers’ nineteen plus years of experience in real estate (and more than 100 years collectively among our R.B. HALEY agents), we encounter new and interesting information on a daily basis. Many of these pearls are not well known and are often “things that you didn’t know you didn’t know.” We thought it would be great to share these with our audience and invite you to share these posts with others to spread the knowledge, and share your own thoughts and experiences as well!
So, for today’s “I learned something new today about real estate…” we have a scenario where, unfortunately, a client had passed away. Their home was in a trust and many siblings inherited the property. Generally, in situations like these, the trustee would sell the home and liquidate it to pay off the heirs and the bank. In this particular situation however, there is a family member living in the home that wishes to purchase it but cannot qualify for a loan to re-finance the property. She happens to have enough cash to pay off the siblings. The siblings asked if they could safely accept the money and avoid any liability should she ever default on the existing loan. We checked with title about whether the bank would be noticed upon a quitclaim being filed and if this would actually work.
Surprisingly, he said as long as the bank is being paid, it is unlikely they would ever question any recording of a quitclaim and the siblings can safely take payment and walk away. He cited the GARN-ST GERMAIN DEPOSITORY INSTITUTIONS ACT OF 1982.
Although this is an unusual situation, it is certainly interesting and noteworthy that the potential buyer may be able to simply maintain the existing loan and will be fine provided she stays current. And, more importantly, the other heirs can allow her to pay them and also not have to worry about any potential liability in the future! Of course, it is a good idea for them to have an attorney draw up the paperwork confirming what each heir is willing to accept for payment of their portion, and verify all for the record, but this appears to be a good situation for all!
Have you seen or experienced anything like this? Tell us about it! We’d love to hear your thoughts and input in the comments below, and please share so that others can benefit from this as well.
*Please note that this article is not meant to act as legal advice.