Legal Question in Real Estate Law in Utah

Re: notice of interest

Should the seller attempt to use the property as collateral for a loan, the title search done by the lender will show that you have an interest in the property in addition to the interest of the current owner. Without such a notice on record the lender would now know of your interest and conceivably loan the owner money using the property as collateral. That could lead to serious difficulties for you should the owner get into financial difficulties. For example, should he default in that situation, the lender could foreclose on the property and your recourse would be to sue the owner for breach of contract, but since he defaulted on the loan he would not likely be able to make good on your damages and you would lose your claim to the property, even if you were able to perform your obligations under the sales contract.

In my estimation and from the little information you've given, your realtor had given you excellent advice.

Re: notice of interest

Should the seller attempt to use the property as collateral for a loan, the title search done by the lender will show that you have an interest in the property in addition to the interest of the current owner. Without such a notice on record the lender would now know of your interest and conceivably loan the owner money using the property as collateral. That could lead to serious difficulties for you should the owner get into financial difficulties. For example, should he default in that situation, the lender could foreclose on the property and your recourse would be to sue the owner for breach of contract, but since he defaulted on the loan he would not likely be able to make good on your damages and you would lose your claim to the property, even if you were able to perform your obligations under the sales contract.

In my estimation and from the little information you've given, your realtor had given you excellent advice.