Sherrifs sale listing quandry...

[Prospector]

I've never gone after a Sherrif's Sale thinking they are too messy for my liking. But this one caught my eye.

What is unclear to me is whether you are buying out a 1/3 interest in ownership (timeshare? Split ownership?) or 1/3 of a lot as in physical land. Anyone wanna clear this one up?

UNDER AND BY VIRTUE OF a Writ of Seizure and Sale issued out of the
Superior Court of Justice at 333 Church Street, Fort Frances, Ontario to me
directed, against the real and personal property of Robert James Pearson,
Defendant, at the suit of Northern Lights Credit Union Limited, Plaintiff, I
have seized and taken in execution all of the right, title, interest and equity of
redemption of Robert James Pearson in and to:

A one-third interest in the following subject property - PIN 56066-1498,
Parcel 21739 Section Rainy River; Location HA-403 unsurveyed territory,
part 1 on Plan 48R1169, District of Rainy River
Municipal Address: No municipal address assigned.

Property Description:
The subject property is a 2.86 acre island located on Manion Lake near Mine
Centre, Ontario, approx. 40 miles from Fort Frances, Ontario. Access to
the lake is by road and access to island is by boat or air. The exterior of a
two (2) level wood frame cottage (22? x 42?) is hand hewn wood giving the
appearance of natural log. The roof has cedar shakes and skylights. There is
an abundance of young healthy red pine trees on the island.

[Pfm1011]

Save your money..I confirmed there IS three on the title and all have the same last name so you would be buying one third and therefore nothing usable and they would have to buy you out ...If its the matrimonial home, you cant force a sale of the remainder , If its not it will still take years and you will lose money..

[Prospector]

Save your money..I confirmed there IS three on the title and all have the same last name so you would be buying one third and therefore nothing usable and they would have to buy you out ...If its the matrimonial home, you cant force a sale of the remainder , If its not it will still take years and you will lose money..

Thanks PFM, I suspected something like this.

[twinn1]

I have been to a sheriff sale like this in Toronto many years ago.   It was only for a 50% interest in the property and the funny thing is that the other co-owner showed up to the sale.  He handed out a document stating that he is the other co-owner in the property and he has no intentions of moving out of the house and would fight any legal challenge to that effect.

It worked out pretty good for him because no one bid on that property.   I am sure that the property did sell at some point but it was not for a long time as I saw that same property come up for sheriff sale at least 3-4 more times before I stopped following it.

Shriff sales are risky enough as is, I would never touch a deal were it is only a interest in the property.

[Pfm1011]

Seems like alot of trouble to avoid paying a debt..why didnt the co-owner (or a friend or two)  just bid super low at the sale and it would have eliminated the threat to the house and a pile of on going legals.

 They could still chase the debt but they couldnt get the house. Without the house as an asset the creditor would have settled for pennys on the dollar as you would be judgement proof and all your problems would be over. If there is no pot at the end they wont spend the money to pursue you. Even if they do they hassle you they have nothing left to threaten you with.

If I owe you a dollar..its my problem..If I owe you a million..its yours

And no I have never done anything like this before and have always had  mint credit. However years ago I almost lost a company and was staring bankruptcy in the face ..It was a very nasty feeling.

[twinn1]

Who knows the backstory, a lot of times things get real messy with sherrif sales.  In that case the co-owner had the same last name so i am assuming it was either the brother or son.

One of my friends who is a contractor had to go through the sherrif sale process to get money back that was owed to him, it took a long time and the house did not sell at the first few sherrif sales.  At the end he did get his money but I would not have wanted to be the person that brought that house.

Thats the thing with sherrifs sale, the price has to be right as you are basically buying the house unseen (the inside anyway) without vacant possession.  And I could only imagine what condition the house will be in after you get the owners evicted.

[Jayz]

Seems like alot of trouble to avoid paying a debt..why didnt the co-owner (or a friend or two)  just bid super low at the sale and it would have eliminated the threat to the house and a pile of on going legals.

 They could still chase the debt but they couldnt get the house. Without the house as an asset the creditor would have settled for pennys on the dollar as you would be judgement proof and all your problems would be over. If there is no pot at the end they wont spend the money to pursue you. Even if they do they hassle you they have nothing left to threaten you with.

If I owe you a dollar..its my problem..If I owe you a million..its yours

And no I have never done anything like this before and have always had  mint credit. However years ago I almost lost a company and was staring bankruptcy in the face ..It was a very nasty feeling.

Is there such a possibility that the bank was still the bigggest creditor to the house, so the other owner or owners couldn't afford to buy that portion out?

I myself have a situation, well, actually worse case ongoing in which I own 1/3 of a property by contract (I am not even on title!). The relationship has gone nasty. After refusing to pay me back debt they owe me (1/3 share by contract but I am actually the one who spent the most for the property including the downpayment and reno where the money were mostly spent; the portion I overpaid (for them) is the debt), the person who is on title is trying to sell the property without my agreement. After Kowning that, I put a "caution" against the property, so that person can't close the deal now. The buyer's lawyer has requested the "caution" to be removed, and treatened that the guy on title would stop the mortgage payment (which has been being paid by rental income) and then to sue me for damages if the property goes under power of sale on some point.

In this case, the guy on title can't afford to pay me the debt and buy me out as he said. Although the money he owes me alone is enough for me to buy him out, I can't afford to assume large sum of mortgage owing. I don't know what situation brings along Sheriff's Sale, but I assume it could be in my better interest if, rather than Power of Sale where I might get nothing, it goes under Sheriff's Sale where I can at least have a judgement to have something back if it eventually gets sold. Any idea? Anyone with experience and or legal knowledge please comment. If you know any good lawyers please recommend. Thanks.       

[twinn1]

 Why would you get into a deal without your name on title?  I assume it was to save upfront costs/land transfer/legal fees etc...

Here is my free advice, please consult with a lawyer before actioning anything you read in these forums.

With sherrif sales, the bank remains first title on the property, the buyer assumes all debt obligations and liens agaisnt the property so in your case it sounds like it would be an ideal situation.  if you are forcing the sale, you get paid and the buyer pays assumes all other debt.

Why not have the person relquish their right to the property, since the debt outstanding is enought to buy them out.  Have them volunter to take their name of the property in return for you to remove the "caution".

Even with power of sale, the bank has first title but any liens registeried against the property must be paid by the buyer so I still think you would get money back, that is if you have an actual lien registeried against the property.  I really don;t think he has much of a chance to sue you and win, espically if you have a legal binding contract or agreement outlining the terms of your business deal.  It would be a civil matter anyway and in those cases, the losing party has to pay both legal fees, so its unlikely that he or his lawyer would take the case that far.  In my opinon its just a bluff.

[Jayz]

Why would you get into a deal without your name on title?  I assume it was to save upfront costs/land transfer/legal fees etc...

To avoid financing complication

Here is my free advice, please consult with a lawyer before actioning anything you read in these forums.

With sherrif sales, the bank remains first title on the property, the buyer assumes all debt obligations and liens agaisnt the property so in your case it sounds like it would be an ideal situation.  if you are forcing the sale, you get paid and the buyer pays assumes all other debt.

Any idea how to "force" the sale? I assume you meant "Sheriff's Sale"?

Why not have the person relquish their right to the property, since the debt outstanding is enought to buy them out.  Have them volunter to take their name of the property in return for you to remove the "caution".

As I said, I can't afford to assume the large sum of mortgage remaining since I've already had too much liability.

Even with power of sale, the bank has first title but any liens registeried against the property must be paid by the buyer so I still think you would get money back, that is if you have an actual lien registeried against the property.  I really don;t think he has much of a chance to sue you and win, espically if you have a legal binding contract or agreement outlining the terms of your business deal.  It would be a civil matter anyway and in those cases, the losing party has to pay both legal fees, so its unlikely that he or his lawyer would take the case that far.  In my opinon its just a bluff.

A lawyer I spoke with actually said otherwise. He didn't mention in our telephone conversation but later he sent an email saying- It's very likely for him to succeed in bring Application to court to have the "caution" removed.  When I asked what makes him think so and why I need a lawyer if you think he will win and I will lose, he never responded. I am not if it's because he is a "small" lawyer and the lawyer the other guy retained is a "big" lawyer from a big Toronto law firm. 

[markymark]

Jayz should you not have registered a lien as soon as you had a contract?

[Jayz]

Jayz should you not have registered a lien as soon as you had a contract?

When you thought you got a good friend to trust, you wouldn't think of anything to protect yourself but rather try whole-heartly to grow the business together until things went so wrong. A lesson learned of course, and it's an expensive one.

[twinn1]

without a regisitried lien on the property the chances are that he will win.  I assumed that a "caution" was a lien.  To force a sale you need to have a lien against the property and have to prove that the lien is valid.   Without a lien you really do not have to much to stand on.

I really hope that this was not a gentleman's agreement without a contract that was reviewed by a lawyer, because if that is the case then you are sh*t out of luck.

Power of sale or sherrif sale, it does not matter to you if have a lien agaisnt the property, the buyer cannot complete the transfer without paying of the lien. 

[Jayz]

without a regisitried lien on the property the chances are that he will win.  I assumed that a "caution" was a lien.  To force a sale you need to have a lien against the property and have to prove that the lien is valid.   Without a lien you really do not have to much to stand on.

While the "caution" survives for 90 days,  I'm working on having the Partnership Agreement officially registered, and then legal lien may be put against the property. But I am not sure if it'll successful.

I really hope that this was not a gentleman's agreement without a contract that was reviewed by a lawyer, because if that is the case then you are sh*t out of luck.

Not sure if you can call it a gentleman's agreement. It's written and signed but not reviewed or witnessed by any lawyer.

Power of sale or sherrif sale, it does not matter to you if have a lien agaisnt the property, the buyer cannot complete the transfer without paying of the lien.   
 
 
 

[Pfm1011]

The catch is a lien has to be registered within two weeks ( or tens days )of the transfer of money to be bulletproof. It can be struck but they will spend more to prove it invalid they it would cost to pay you out.

A contract does not need to be witnessed by a lawyer. Hopefully this is a one page simple contract.
Lawyers make them 30 which just adds more outs for the parties

How much money are we talking about? One has to way cost benefit when deciding direction.

As per
lawyer and the lawyer the other guy retained is a "big" lawyer from a big Toronto law firm.  

Don't be scared of that BS. big law firms simply mean worse service with substantially higher bills, The "expert" you think you are hiring for the 600 an hour will hand the whole case off to juniors then run the sh*t out of the bill. They will let the juniors "save you money " charging half but  taking ten times as long to do the job incorrectly .  

The big name you thought you hired will occasionally bless you with his presence.. yes he will show up at hearing or cross and have a junior carry his bag, and another to take notes . The costs to you will go to 13 to 1400 and hour and they will argue totally irrelevant crap for hours at your expense.  

  The success rate of the big firms is no better , and could be worse then the small local guy who costs way less.  

Think of it as a rolex and a timex ..The rolex cost a pile more , looks impressive , makes the wearer feel more important , but is not as accurate as a cheap timex quartz and they both get the job done

[Jayz]

The catch is a lien has to be registered within two weeks ( or tens days )of the transfer of money to be bulletproof. It can be struck but they will spend more to prove it invalid they it would cost to pay you out.

Unfortunately when you have 2 or more people doing a thing together, money doesn't flow among each other with clear cuts. An example would be, the business required a computer, I bought it and paid for it let me say $1000. Obviously here, if this is a 2-party partnership, the other person would owe me $500 to make it equal share. There are just too many things were done this way. I kept a record of my own expenses, but the other party never had a proper accounting of expenses and incomes including all rents taken over years.

A contract does not need to be witnessed by a lawyer. Hopefully this is a one page simple contract.
Lawyers make them 30 which just adds more outs for the parties

I understand this part. Ours is a 3-page.

How much money are we talking about? One has to way cost benefit when deciding direction.

$200k more or less.