Legal Question in Real Estate Law in Pennsylvania

Re: Joint owner made a loan without my approval

Only if the person is on Title....even then there are several other issues to discuss....the bottom line here is retain an attorney before this matter clouds your legal title to the property. If you don't you WILL HAVE MAJOR PROBLEMS if you ever want to sell the property or get a new loan!!!

For more information, please feel free to visit my website @ www.AlleghenyAttorneys.com or I can be reached by phone at 412.731.0865, best of luck.

Sincerely,

Marc V. Taiani, Esquire

AAAL - Allegheny Attorneys At Law, PC

412.731.0865 (Office)

412.731.0866 (Fax)

www.AlleghenyAttorneys.com

Re: Joint owner made a loan without my approval

If you are the owner of record, it could not have been done without your knowledge. There are facts missing and there is potential fraud. I suggest you consult with an attorney immmediately.

Re: Joint owner made a loan without my approval

You asked a co-owner could take a loan on a property without the approval of another co-owner.

Yes, it is possible, but it should not necessarily cause alarm. Both parties have the same right to the property. No party can devise the entire premises without the consent and agreement of the other party, but they can pledge a percentage of the property (this would depend on the manner in which title is held and the lender).

In this case, if the partner were to default on the loan they lender could seek to foreclose only on the amount of the property pledged. This should be no more than 50% of the property and then only subject to the pro-rata portion of the property unencumbered by liens with higher priority. The foreclosing lender could then either choose to hold the property as your new partner, to the extent it gained an interest in foreclosure or it could seek partition of the property.

In partition the property is sold and the value realized is apportioned according to priority. For example in this case: the most likely scenario is that the first mortgage holder would be paid in entirety, then you would be paid 50% of the remaining equity then the second (or new) lender would be paid its due, and only then would the current co-owner be paid any remaining equity.

You should speak with the co-owner and come to an understanding about encumbering the property. This would best be done using lawyers (preferably one each). As I said, you are right to be concerned but not alarmed yet. Take a look at the lien that the new lender has filed and see how it encumbers the property. If it doesn't sound right to you then speak with an attorney.

I hope this helps. Please feel free to contact me if I may be of further assistance.

Regards,

Roger Traversa