Legal Question in Real Estate Law in Pennsylvania
WHAT TO DO to save the farm
I have been bailing out a brother, who has title (subject to a recent new mortgage taken out on property) to property in PA that has a stone quarry on premises. I have stipulated to him that I will only pay the back mortgage and taxes again if I have ''something in writing'' that will enable me to manage the property going forward to prevent this from happening again. The quarry is presently under lease and has room for another leasor, as well. My brother has agreed that he is willing to relinquish the title to me, which I know is currently under mortgage, when it is free and clear to do so. In the meantime, he is also agreeing that he is willing to allow me ''any power'' to control the property from now on. He is paid by the quarry leasors with ''royalties'' on amounts of rock removed. I want to be able to claim authority to manage this in order to collect this money and disburse toward paying off the note on the mortgage and taxes, as well as any other expenses related to such. How do I set this up and what forms would I need? Since he is still on the mortgage, how would I structure it for tax purposes, under who's name, and so forth. HELP!! time is running out.
2 Answers from Attorneys
Re: WHAT TO DO to save the farm
First note that this is a Pennsylvanis real estate law property question. If the property weee in Va., I eould advise you to take title to the property subject to the mortgage. The danger would be that the lender might then try to call the note because of a due on sale clause in the mortgage. If you are financiallyin good shape that would not be too bad as the lender (or your own lender) woulld work with you.
Re: WHAT TO DO to save the farm
The arrangement you have described seems unnecessarily complicated. If your brother truly
intends to convey title to you "when it is free and clear to do so", what does he gain by waiting
and having to continue making mortgage payments, which, apparently, he is hard put to do?
In return for your agreement to pay the mortgage arrears and taxes, your brother could convey to you via quitclaim deed whatever interest he has in the property, and with the approval of the mortgage company, allow you to assume the mortgage
with full ownership rights in fee simple, which would allow you to manage the property as you see
fit and allow you to claim whatever you may appropriately claim for tax purposes.
If the mortgagor refuses to allow you to assume
the mortgage and demands a payoff with the
title change, you could then seek your own financing, or, if feasible, finance it yourself
with your own mortgage structured for maximum tax advantage.
If there are issues of sharing mineral rights
and the "royalties" therefrom, I'm sure some equitable arrangement could also be worked out with respect to these.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
