Utah Home Foreclosure
What legal recourse does a person have who signed a contract to purchase a
home, from a private owner, and who has not missed a single payment, never been
late with a payment, and has made each tax and insurance payment as required by
said contract? This person received a notice today that the owner of the house
had taken a second mortgage out on it, and has stopped making the second
mortgage payments, and the finance company has announced that they will begin
forclosure proceedings immediately. The gentleman in question has been
"renting to own" this house for three years and four months. He's never been
late or missed a payment, has made sure the taxes were all paid, all the
insurance was taken care of, and has made whatever necessary repairs that were
needed in a timely fashion. He has a contract with the seller and now finds
out that the house is in the process of being forclosed upon.
What legal recourse does he have, since he's followed his end of the contract
to the letter of the law? He was told today that the owner is planning to file
bankruptcy in the very near future, making it impossible to file a lawsuit
against him for breech of contract. Does anyone have any ideas, or advice?
First, I suggest you disregard "Richard"'s advice. He is a dangerous little
man who knows nothing about the law but misleads unsuspecting posters by
speaking as if he does.
As to your questions, it's unclear what the actual agreement between the
parties says and that will largely determine their rights. Is it a contract
for deed? I don't know Utah law at all and very little about this area of
law, but some states have legislated additional protections to those buying
under contract for deed. In any case, your post raises some potential issues
which may be worth looking into (fraud, whether the second lien is
subordinate to his contract, and whether it's worth working a deal with the
2nd-lienholder come to mind). Also, even if the owner files BR, the buyer
may still be able to retain his interest in the property and if there's
indeed a fraud claim, that claim might not be dischargeable in BR. This
buyer should *immediately* consult with a real estate lawyer to see if any
action (such as a temporary restraining order) can be taken prior to the
foreclosure sale.