Legal Question in Real Estate Law in California
Five years ago I had to sell my house in CA. My buyer could not get a loan so I signed a deed and had it noterised. We agreed he would continue getting his loan within two years. I moved to Buffal NY and bought a house. Now I find the CA house is still legally in my name. He never filed the deed with the county, but kept payments up. I am now in a position where I must file bankruptsy and have two liens on my NY home. I am fed up with the buyer stalling in CA and would rather sell the house to someone who can get it a loan on their own, and pay off my creditors. What are my legal otions in this? I cringe when I think of how he is cheating the system and involving me. The homeowner exemption has been $7000 a year and I am not living there
Worried & Broke
2 Answers from Attorneys
Well, your situation is fairly complex, and as often happens on LawGuru, I can't give you a truly useful answer without the proverbial "more information." However, here are a few starting points to work from:
1. Failure to record a deed doesn't render the deed ineffective to transfer title (ownership) to the buyer for most purposes. "An unrecorded instrument is valid as between the parties thereto and those who have notice thereof." Civil Code section 1217. Notice can be actual or "constructive," meaning (among other things) that a party is presumed to have notice of things that would be obvious or apparent upon an inspection.
2. A seller of real property has a lien thereon for so much of the purchase price as remains unpaid and unsecured. Civil Code section 3046, defining a "vendor's lien."
3. However, the vendor's lien is subject to certain limitations which may or may not apply here.........Civil Code sections 3047, 3048.
4. The buyer might have recorded the deed but Humboldt County mis-recorded it. Or, more likely, the buyer failed to record it, but would do so if "reminded" to do so by your taking legal action against him.
5. What deed form did you use? A standard California grant deed, or did the two of you make something up? Did you perhaps use a "land contract" or "contract for deed" form, rather than a grant deed? Do you have a copy?
6. What, specifically, was your agreement regarding postponement of financing the purchase and paying you off? Your buyer is acting, in some ways, more like a tenant than a purchaser.
7. Who's paying the property taxes and insurance? Who does the assessor think is the owner?
You have a lot of issues. The first question that I would have for you would be whether you had a contract in writing for this arrangement. The best thing I can suggest is that you speak at length with a competent real estate attorney.
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