Check who owns the land under the listing before you make that offer!

By
Real Estate Broker with S & W Real Estate, serving Lincoln County 200509394

Once upon a time, I had an exciting call from an agent who had a party interested in a condo listing of mine. He asked me, "Is the land under the condo owned, or leased? condo

The owner never mentioned a land lease to me, I had read the CC&R's and had not seen anything indicating that the units were sitting on leased land. The customer service report from title did not show any record of it.

I pulled the file and read the CC&R's with a fine tooth comb.  Somehow, I had missed reading a page with very old, small print. I checked again with a magnifying glass in hand. Indeed, the magnifying glass told the story, there was record of a land lease until year 2022. Yikes!

I did not panic or call the agent to tell him the bad news. Instead, I immediately called the title company, who graciously agreed to a more in depth search, even though the property was not in escrow with them. It turned out that the HOA had bought the property and had it deeded to the HOA. The document showing transfer of the deed was buried in a morass of paperwork which was even harder to find than the Lease document.

The CC&R's were prepared long before the deed was tranferred and was not included in the original set of documents.

This oversight could have cost the seller a sale had it not been for the attention of the buyers agent and myself to have title dig deeper before we sent the CC&R's to the buyer and lost a good transaction.

The story has a happy ending - the agent was able to tell his buyer that the condo is not on leased land and the title company that did the search was granted the transaction for their trouble!

May I add that this is yet another reason you want to use a real estate professional when buying or selling property!

 

 

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Rainmaker
127,313
Faye Taylor
Faye Taylor

Great info.

Always helps to have a good relationship with a title company.

December 13, 2011 10:50 PM
Rainmaker
886,989
Michael Jacobs
Pasadena Real Estate Representation 818.516.4393
Coldwell Banker Residential Brokerage

Barbara --- you never know what you can discover in the fine print.   Check, double check and then check again.  

December 13, 2011 11:31 PM
Rainmaker
176,206
Barbara Le Pine
S & W Real Estate, Newport OR
S & W Real Estate, serving Lincoln County

Rick, that certainly would have been sad to lose a transaction over something that could have been found.

Faye, I rely on my Title company to help me with many technical questions, which they are happy to do because I send them so many escrows. I also play golf with my favorite escrow officer from time to time, I make sure the green fees are on me!

Michael, I agree with you, check and check again, my eyes are not what they used to be!

Thanks for all of your comments!

December 14, 2011 02:50 PM
Rainer
86,659
Alan Anthony
Your Huntington Beach REALTOR®
Westline Real Estate

Great catch! We have some properties here in HB that are on leased land. Many people are attacted to them initially because of the price not knowing that the land is leased.

December 14, 2011 06:27 PM
Rainmaker
176,206
Barbara Le Pine
S & W Real Estate, Newport OR
S & W Real Estate, serving Lincoln County

Alan, We have a slew of manufactured homes on leased land near the beach that attract many calls from buyers outside the area. They are in a 55+ park, so the listings are pretty restrictive but look like a bargain on the internet. Thanks for your comment!

December 14, 2011 06:50 PM
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Rainmaker
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Barbara Le Pine

S & W Real Estate, Newport OR
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Additional Information

A mix of thoughts and ideas from a full time Real Estate Broker who lives in and works in the entire Lincoln County Area, serving Lincoln City, Otis, Gleneden Beach, Depoe Bay, Otter Rock, Beverly Beach, Agate Beach, Newport, Yaquina Bay, Toledo, South Beach, Seal Rock, Waldport, Alsea, Tidewater, and Yachats.