House foreclosed 2010, condemned due to serious public safety issues (black mold, etc....utilities turned off 2009 house flooded 4 times), bank refuses to maintain denies property preservation because of HELOC, no equity, has several federal and city tax liens, cited for demolition, up for sheriff's sale 7/2012, no real value except for the land it sits on, decreasing the value of other homes in upscale neighborhood. Under eminent domain and/or any other applicable law can this property be purchased outright and get a clear clean title? and how does one do so?
State/Country relating to question: Indiana
*contact homeowner-via certified mail, phone and thru city commisioner's office to no avail
*working with city to stay the demo
*tireless efforts with bank personnel(agreed to short sale-with homeowner approval-unable to get)
*researching the laws, land value, title, etc..
*looking for feedback on how to obtain this property without much cost...unload the burden from the city and refurbish/rebuild the property at my own cost...do a public service for the community as well
Hi - my name is XXXXX XXXXX X'm a Real Estate litigation attorney here to assist you.
Eminent domain and condemnation laws are only available to the government to acquire property for public use or for the public good.
In a condemnation proceeding, the landowner usually keeps title to the property and is billed by the city/county for any cost associated with cleaning up the property site, removing unsafe structures, debris, etc.
Thus, it is likely that the lender/purchaser at foreclosure still holds title to the property and can sell it to you free and clear - assuming the lien for removing the structure is paid.
Given all that is wrong with this property, abated by homeowner, bank no longer interested-no equity-huge liability to them, my willingness to clean it up at my cost and serving the public good, How can I purchase this property, is there a way to get free and clear title due to the circumstances of this case? CBS did a segment called "There goes the neighborhood" aired Dec 27 2011 with similar issues...
You would have to find out who owns the property. If it was foreclosed on, the likely owner is the lender. You can check the county records to see who is the title owner of the property. You would have to contact the owner and offer to purchase the property from that person/entity. The condemnation or demolition plans for the home doesn't effect the property's title unless the property is being condemned through eminent domain (property needed to build or expand a road, etc.). As long as the property is being condemned solely to clean up the site, the owner doesn't change. However, any expense the county/city incurs by cleaning up the property would be a lien against the property and would have to be paid by the owner to hold title free and clear. If you were able to reach a deal with the owner to purchase the property, you should also contact the local officials about any pending clean up plans. If it hasn't taken an action, it is likely that they would give you a month or so to clean up, and if you do, they will likely stop any plans for condemnation.
Kirk, Excuse me in the aforementioned maybe I didn't clarify properly the following points:I know the homeowner and he doesn't want anything more to do with the property-he made it clear and he walked away. He filled bankruptcy and foreclosed on the property.Property has already been condemned by city last year.Demolition is a possibility.Set for Sherifs sale next month.Yes I have been working with city officials.Yes I purchased title search and have all the info on property Doesn't eminent domain also include condemnation for public safety issues...Any suggestion how to get property with clear title possibly at Sherifs sale or preferably before Sherifs sale?
Ok. Thanks for the information.
f you've had a title search done, then whoever the owner of the property is is who you would have to talk to about purchasing the property. If the property is in the middle of foreclosure (but hasn't been sold yet), you would have to get approval from the lender to purchase the property as well - in order to stop the foreclosure.
Condemnation has two different definitions. Eminent domain is a type of condemnation. This is when a government entity takes property from a private person or entity for public purposes - like building a road, extending a right of way, etc.
However, another type of condemnation is when a piece of property is a hazard because it has not been taken care of - falling in, eye sore to community, grown up, etc. This is a type of condemnation - but it is not an eminent domain proceeding. Instead, the city/county cleans up the property and bills the property owner for the cost. There is no taking of the land in this process. Instead, it is just a clean up.
Often, lenders are not agreeable to selling a property after foreclosure has been started unless the owner wants to redeem the property. It is not illegal for lenders to sell the property before foreclosure, but lenders usually don't do this because it could appear to be an inside sale instead of an arm's length, fair market value sale.
Thus, if you want the property, you will likely have to show up at the foreclosure sale and bid on the property. If you are the winning bidder, you will be named as the owner in the deed from the foreclosing lender.
You would still have to resolve any issues with the city regarding the condemnation (clean up) plans. If no clean up has been done, it is likely that they would give you time to get the property up to code. However, if any work has been done, you would likely owe the local authority for that time.
Ok...thank you. The house has already foreclosed...the court awarded judgement to the bank interesting though the bank was Countrywide who now is bank of America who ultimately refutes responsibility for property preservation...therefore, the city has been caring for grass etc but domicile is now dilapidated ...The title search reports federal tax Liens as well as city tax liens ...will the buyer at the Sherifs sale assume the responsibility of taxes? What if any could the fair market value be for property that is condemned due to its condition and has no equity with (homeowner owes more than worth) ? Here are numbers owed...$55,000 mortgage, $ 323,000 mortgage, $80,000 federal taxes, $7,600 city taxes. The Land value is appraised at $43,000-this is really all it is worth. As one can see this is a real pickle. Are there any statutes or laws that would help an interested party/buyer get this property?
Relist: Answer quality.Expert to read all info provided then answer completely. Please don't repeat what I have provided as the answer or ask questions that have been answered in the info I provided...a waste of time. Thank you.
Hi and welcome to Just Answer
I have read the Q and A between you and the expert. As I see it, you want an attorney to tell you that there is a way to force the Bank or the municipality to sell you the property for valid reasons. Don't shoot the messenger but you have no legal right to do that. The best you can do is keep at it to try to get title.
One other thought. Make an application to the city environmental control board to order a sale.
Sorry for the delay....
Usually, at a sheriff's sale, all past taxes, liens, assessments, etc. are put into the opening bid for the property (sheriff will open bidding with a base price established by owner/lender). Thus, the proceeds from the winning bid would be used to pay off all liens that encumber the property.
When you're dealing with a condemned piece of property, the value is generally considered to be the worth of the raw land. If there are all of these taxes and liens against the property, it is likely that the value will be reduced in order to absorb the taxes and lien. For instance, if the value of the property here is $43,000, that's probably all that will be sought in the sale. The property would be released from the mortgages and the taxes would be paid.
On another note, a federal tax lien is usually against the landowner and NOT against the real estate itself. If this is the case, the federal tax lien would not stay with the property if it is sold at foreclosure. Thus, you should not have to worry about that. Instead, the federal tax lien will continue against any property or assets of the owner.
Also, lenders can seek deficiency judgments against lenders in the event that a foreclosure sale/sheriff's sale doesn't generate enough money to pay off the mortgage. Thus, that balance can be pursued against the original owner. Whether or not this is pursued depends on whether the lender believes it can recover anything from the owner - which seems unlikely in this instance.
Thus, the opening bid at the sale is likely to be close to the market value of the lot, and the liens should all be erased with the proceeds of the sale. If the seller isn't offering to give you free and clear title to the property, you don't need to try to purchase it.
Unfortunately, there are no laws that would give you any right to get this property that are unique or different that the laws that would apply in any property auction. Instead, you will have to show up and bid on the property just as you would in any other instance.
BV Rated by Martindale-Hubbell; SuperLawyer rating by West
Kirk-Thank you! You have helped clarify this issue considerably.
One typo..... sorry. Also, lenders can seek deficiency judgments against BORROWERS in the event that a foreclosure sale/sheriff's sale doesn't generate enough money to pay off the mortgage. Thus, that balance can be pursued against the original owner. Whether or not this is pursued depends on whether the lender believes it can recover anything from the owner - which seems unlikely in this instance.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).