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Title Bombshells!
Recently a new, rush OTP (closing in four business days) landed on my desk and I got a call from 'Bill'. He was helping his mom sell her condo and wanted to chat about the next steps. His mom was a senior and not tech savvy, didn’t even have email. I told Bill I was glad he called because I was about to try to call his mom when he said "Oh, why is that?"
I told Bill I had reviewed the titles for both the living unit and the parking unit. While the living unit was in his mom's name, the parking unit had three names on it. That was strange.
Along with his mom's name, there were two others each holding a one third interest as tenants in common. Bill didn't know why the parking title had three names.
He told me that the other two names were his brother and his now deceased father.
This is an even bigger "uh oh", and I didn't want to ask the next question.
"So, Bill, after your dad died, why didn't his estate/probate transfer his 1/3 share to your mom, presuming your mom was your dad's sole heir?"
Bill says "oh, we didn't have to go through probate, my dad didn't have anything".
Obviously his mom, Bill and the rest of the family didn't understand that while dad may not have had much, he did have a 1/3 interest in the parking title as a tenant in common. If they had been joint tenants: easy-peasy. A person's joint tenancy interest passes basically automatically on death.
Tenants-in-common? This needs to go through probate, a Court process that ends up with a judge giving an executor official authority to deal with the deceased person's affairs.
Remember: this was a rush deal with four days to close! Not going to happen in that timeline. As much as the Probate Court is pretty cooperative about giving an order to sell property before probate is completed, the probate application must still be filed with the Court. I would say it takes at least a month.
And the final kicker? "Bill, what about that old mortgage still showing on the title?"
You guessed it. That mortgage was paid off long ago and there were no records to prove. See other emails regarding this problem:
I believe it's standard practice for all Realtors to pull a title at some point in the process. The trick is to give that title a good review. If your review raises any issues or questions, some immediate action may be required. You may not know how to solve the issue, answer the question or what action to take, but that doesn't matter. Start digging and ask questions.
If you were the listing Realtor, first question should be "why are there three names on the parking title?" That would have started the conversation. His mom would likely have spoken to her lawyer and dealt with the parking title problem right away instead of four days before closing.
Don't let your client say "you're the Realtor, you should know these things. Why didn't you tell me?"
Protect yourself.
Cheers,
Barry
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