Legal Question in Real Estate Law in Delaware
Bankruptcy / co-owner
I am looking to finance home with Guidance Financial Group.
They have Co-owner deciling Balance program.
They form a co-ower (affiliate company). One of the term is listed below and I am concerned about. What is it actaully mean? Please advise
''Requiring that the co-owner be formed as a special purpose, bankruptcy-remote limited liability company under the laws of Delaware. This requirment prohibits the co-owner from incuring debt, limits its ability to file a voluntary bankrucpty petition and minimizes your risk that the asset of the co-owner, which is its ownership interest in your residence, will be subject to the bankruptcy of another party (ie. an affiliate). This is particularly important because pursuate to a Transfer Event, any appreciation in the property belongs to you, therefore it is crucial that such appreciation is protected from other parties''
2 Answers from Attorneys
Re: Bankruptcy / co-owner
My firm just enrolled in program. If you still need DELAWARE attorney on issue, please contact us. Ed Pankowski
Re: Bankruptcy / co-owner
CAUTION:
I would strongly suggest that you review this agreement with an attorney. This type of provision is extremely rare in a residential mortgage situation and can (and probably will) severely limit your ability to (1) manage your property, and (2) protect yourself in case there are any problems with the mortgage or the repayment of the mortgage.
CAUTION.
See an attorney before SIGNING ANYTHING.
Tom Weiss
Mount Pleasant
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