 Dear George: I bought a property at a judgment sale at the county sheriff's office without having done title research on the property. Two months later, the property was foreclosed on by a bank without my knowledge and sold to an individual. The county still recognizes me as the owner of the property and has billed me for the property taxes. I am not sure as to what my rights are. Should I pay the property taxes? Do I have full rights to the property since I am the only one on the title at the county? Does the law allow me to sell the property if I have sole ownership rights?
Answer: Buying at a sheriff's sale without title research is not a bona fide purchase for value and has no protection from title defects. The other lien was probably a prior lien, although you do not say that, so your interest is gone. The fact that the county still bills you for taxes means nothing. You'll need to find out who bought at the foreclosure sale and what the lien's priority was.
Dear George: My house note has doubled because the escrow agent or lender miscalculated the tax for my property. I called the lender and requested that the escrow account be cancelled and that I be allowed to pay the taxes and insurance. They denied my request. Now they want $9,000 to deposit in my escrow. My loan is a VA loan. I can't afford the $9,000 or the house note because it doubled. What can I do?
Answer: Based upon the information you provided, there are not enough facts to answer your question. But here are some recommendations:
1. From whom did you purchase your home? Was a REALTOR® involved? Was the home new construction? If it was previously occupied, why did the lender not base the escrow upon last year's taxes and insurance? The only way to get answers to these questions is to contact the loan officer working for the lender and ask him. Also, if there was a REALTOR® or licensee involved, she should be made aware of your problem.
2. Call the customer service number listed on your monthly statement and get someone to explain what happened to the loan in terms you can understand. For example, if the home was new construction, there is the possibility that taxes were calculated upon the land value only. You or the escrow agent may have received that actual tax bill so you have to make up the shortfall plus pay the monthly escrow amount so there will be adequate funds to pay next years taxes.
3. The doubling of a house note and paying $9,000 in additional escrow funds are not the kinds of surprises about which the Texas Department of Savings and Mortgage Lending enjoys hearing. Visit its Web site and check out the Complaints section.
4. You may also wish to contact the Department of Veterans Affairs (800/252-VETS) and ask the receptionist if they have anyone on staff with whom you can speak about your escrow bill and increased house note.
| Dear George: I understand that an attorney can buy and sell property for people as long as he does not earn a commission. Can an attorney become a broker who sponsors a real estate agent as long as the attorney does not earn any commissions? How does an attorney become a broker?
Answer: An attorney is exempt while practicing law, period. He can charge a legal fee for services. As long as the fee does not violate the code of ethics as being excessive (in excess of the normal hourly rate, including contingencies) the attorney is exempt. An attorney is not qualified as real estate broker, cannot split fees with a real estate agent, and cannot sponsor salespeople. If an attorney wants to be a broker, he must satisfy the real estate commission that he has the proper educational requirements. Few attorneys, even with JD degrees, will automatically qualify; most still have to take an exam. Just being an attorney does not qualify someone to practice real estate brokerage.
Dear George: Does the entity that buys an apartment complex in order to convert it into condos have "negligent conversion" liability even if they hire a contractor to do the work? Is negligent conversion a developed doctrine in Texas?
Answer: There is a federal law about condo conversions that was enacted when the developers were buying apartments, converting them to condos, and throwing everyone out. The developer could then turn the project over to a homeowners association to maintain and keep half the units with no maintenance duties. It got very abusive, apparently, and created a housing shortage. We know of no similar issue in Texas. There are, however, two pertinent Texas statutes: Section 82.154 of the Property Code has a property-condition disclosure requirement; and Section 82.160 requires the landlord to give notice (60 days) to terminate an existing tenant, and give a Notice of Conversion to the tenant. We don't see any remedies in the code for negligence in doing the conversion, however.
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