[OrganizedNut]

I am looking for help. We are the sellers and have a land contract in Westland. The buyers are getting divorced. The husband moved out and is living with a girlfriend. The wife and kids were at the house. He was making "rent" payments, but we found out that he is behind on taxes and his water has been moved to taxes as well.

Now, the husband kicked the wife out and wants to give the house back to us because they obviously cannot keep the payments up. This was back in November 2014. Until he submits a Warranty Deed back into our name, the house is in their name and we cannot get property insurance.

So, the house is vacant. However, we are still requesting "rent" until the name is transferred back. Also, back taxes need to be paid; and the water bill that is on taxes (more about to be transferred to taxes) needs to be paid.

How do we collect payment? We want to legally sue them for at least the unpaid taxes, late tax fees, and water bills. Then, we would also like to collect "rent" from November til the transfer is made if we can.

I am researching online. If we let them "forfeit" (which we've already given them a right to forfeit notice), do they not owe us ANYTHING? Even their unpaid water bill (which is attached to the property)? We don't really want to go thru foreclosure with them. WE do not hold a mortgage on the house. It is paid in full; and then we were land contracting it to this couple. We do have a clause in the contract saying that they can forfeit.

We now live out of state, and this is not going to be fun. I want to end this quickly and yet still get at LEAST the taxes and water paid.

How do we handle this?? Please reply only if you know what to do. Responses will be appreciated.

[teachbeach]

A real estate attorney is going to cost you money, but in the end it will be done correctly and swiftly, with all strings tied nicely. I would contact a real estate agent or realty company and ask them to recommend an attorney that specialized in these types of situations. Small claims court might also be the option, but you have too much going on and too many loose ends to drag it through the court system.

[jackmichigan]

Originally Posted by OrganizedNut

How do we collect payment?

You probably won't be able to. Even if you can get a judgment against them, you might have a difficult time collecting anything from them. If you go through the foreclosure process, it's going to cost you both time and money.

I would recommend that you just try to get both of them to sign a Quit Claim Deed back to you (they can sign separate Deeds, if need be). Agree to let them walk if they will sign a properly executed and notarized Deed back to you (or try to get them to agree to at least pay something). Then you would be free to sell the house again. (Hopefully, they paid a significant down payment which might at least cover some of the taxes which are now owed.) You mentioned trying to get a Warranty Deed from them, but they really aren't in a position to give you a Warranty Deed, nor does it really matter. A Quit Claim Deed relinquishes all of their interest--and it is the most appropriate type of Deed to use in this situation since they don't have the entire interest to convey. Besides, a Warranty Deed can not even be recorded when there are outstanding taxes.

One of the big down sides of selling on Land Contract is that if taxes aren't paid, a Seller usually gets stuck paying the bill. It's a live and learn situation. I have had several Land Contracts--both as a Seller and a Buyer. Sometimes they worked out...and sometimes they were problematic.

Your big dilemma is that you are now out-of-state. Is the house still heated, or has it been winterized? If it hasn't been properly winterized, you could have a major problem with water pipes. Broken water pipes will be a major headache--and expense--if they occur. Do you have someone in the area who is checking on the house?

As a licensed Real Estate Broker, I feel obligated to recommend that you work with an experienced real estate attorney. Maybe a strongly worded letter from an attorney would help to persuade them to at least make some payment to you. Good luck.

P.S. And who is shoveling the snow? We had about a foot of snow yesterday!

[Jswee]

If you sold it to them on a land contract, the deed will still be in your name until the contract is paid off, so they do not have any standing to give you a warranty deed. If you have a provision in the land contract that allows them to forfeit their interest in the property, then that is what will govern whether or not they owe you anything other than surrendering their interest. The formal process for reclaiming a property after a defaulted land contract is called "redemption", not foreclosure. As others have suggested, you really need to consult with a good real estate attorney to help resolve this issue.

[jackmichigan]

Originally Posted by OrganizedNut

How do we handle this?? Please reply only if you know what to do. Responses will be appreciated.

Hey, OP--did you ever read these replies? What's new? How are you moving forward?