Real Estate Law
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Can you tell me the type of lien that is on your property?
My tax adviser provided this information: You have two liens on the property: one for the land loan (around $30K and the other with your trust (around $23K). Polar Properties also have an additional loan with your trust (around $112K) that does not have a lien on the property. At a minimum, you will need to pay off the two loans that are liens against the property before you can transfer the property to Mark. You also need to contact the trustee about the other loan to see what your requirements are, if any, if you transfer the property but do not pay the loan off.
My objective is to lease the land to Mark so that he can develop yurts as rental property. I have also considered gifting it to him, but the trust who has provided an interest free loan to me does not like the idea of gifting the property to Mark.
Polar properties LLC is my company which owns the property.
Transfer and renting are differenr
Transferring the title to the property and leasing the property are two different matters.
I found out that transfer is not an option so now I am looking into leasing the property.
Correct. not with the liens. If there is no prohibition in loan documents or trust for renting the land you would be able to rent the property.
So the botXXXXX XXXXXne is that I need to ask the trust if it is ok to rent the land? I cannot rent the land without permission from the trust.
If the terms of the trust state that there is a prohibition against renting the property then you would need permission from the trust to rent. In the absence of language prohibiting rental of the property you should be able to rent.
I found this text in the security agreement: (f) Maintenance of Collateral. Debtor shall cause the Collateral to bemaintained in good condition and repair. Debtor will not commit or permit damage to ordestruction of the Collateral or any part of the Collateral beyond ordinary wear and tear.Debtor shall immediately notify Secured Party of all cases involving the return, rejection,repossession, loss or damage of or to any Collateral and generally of all happenings andevents affecting the Collateral or the value or the amount of the Collateral.
I think it means that I need to inform the trust of all happenings and events so I would need to tell them I have leased the property but not ask permission (assuming I don't find any language that prohibits renting the property)? The best practice may be to ask permission just to be safe.
The language is so broad "happenings" that the best practice would to advise them that the property has been rented.
ok, thank you so much.
I hope that the information I provided has been helpful.
Yes, very helpful!
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