Owner seeks to sell property with some stipulations
Q: I live on 14 acres in Grimes County and wish to sell the front 3 acres with the stipulation that it remains residential, with one brick home, no manufactured housing nor commercial use. How can I legally sell in this manner?
A: You can deed-restrict the lot as part of the conveyance. If the restriction is violated, you can sue for injunctive relief or damages. A more creative way could be to create a conditional limitation in the deed. If they violate the condition, title automatically reverts to you. In either event, you will need professional help.
Just defining “residential use” can be a challenge.
Q: I looked at a home to purchase that is owned by a Realtor. They offered to finance it for me, but the home has an existing lien on it. They said the lienholder (bank) would approve the sale, and that my new loan to the Realtor would be additional collateral for them. What am I getting into?
A: Without looking at the documents, we don’t know. This could be a wraparound financing that is subject to the underlying debt. The big issue, though, is if the underlying debt is not paid. The lender has the right to foreclose on it and you will know nothing about it. Is the lender willing to give you timely notice of any defaults so that you can cure them? If not, why not. If so, why don’t they just make you a new loan? There’s nothing illegal about the transaction, but if your seller skips out of town with your money and defaults, you may have some issues to deal with.
Q: I closed on the sale of my house a year ago. The title company just sent me a new tax proration agreement and said I’d underpaid the taxes last year because they prorated incorrectly. Now they want me to come up with more money. Why isn’t this their fault?
A: Check your closing documents. There is probably a form that says that they prorated taxes on the best information available, and if there are any errors the parties would correct the error. The title company doesn’t get anything out of this. Pay your share of the money and move on.
Q: I have a contract to sell my home, and the buyer is requesting that I purchase the title policy. I understand that this is common in Texas, but I just bought this house last year. Since I have a title policy that is so new, why should I have to pay the fee to buy another one?
A: We get this question a lot. In Texas, it is standard for the seller to pay, although you can agree that the buyer pay those fees in the TREC contract form. The title company has to research title every time a policy is issued, so the fee (set by the state of Texas) has to be paid for that search and policy to be issued. Title companies do make mistakes, and one title company may be willing to take a risk another title company will not take. One recent issue we encountered was a lien reflected on a title commitment that expired ten years ago, but the lien was never released. One title company would insure against it, another would not.
These risks are evaluated in every transaction, so a new title policy needs to be issued.
To send us a question visit www.AskGeorge.net and select the “Ask A Question” button. Our answers to questions do not contain legal advice. If you wish to obtain legal advice, you should consult your own attorney. George Stephens is the broker of Stephens Properties. Charles J. Jacobus, J.D. is Board Certified by the Texas Board of Legal Specialization in Residential and Commercial Real Estate Law.