Real Estate Transactions
Lien Priority Disputes
Title defects cause huge fights over lien priority and are a major reason homeowners are unable to sell and buy property. The Firm is capable of handling these lien priority disputes through quiet title actions, negotiations, or litigation.
Income Taxes: An IRS tax lien arises automatically when a person fails to pay taxes. This lien remains until paid or the tax assessment expires which is 10 years. The tax lien lacks priority against listed classes of creditors until the Notice of Federal Tax Lien is filed. Holders of security interests, mechanic’s lien and judgment lien creditors have priority over federal tax liens if filed first.
State Taxes: State Tax Liens must be filed before IRS tax liens to have priority, even if the state lien arose automatically when the state taxes were unpaid.
Elimination of IRS tax liens: (1). Certificate of Release where the tax is fully paid or compromised, (2) Certificate of Discharge which only affects the specific property listed and does not affect taxpayer’s other property, (3) Certificate of Subordination where the IRS can subordinate its lien in specific property if the IRS is paid the value of its interest or the IRS believes it will realize more money by issuing the subordination, (4) Withdraw of the IRS lien can be due to a prematurely filed lien or a lien in violation of IRS procedures or where the taxpayer has entered into an installment agreement where the agreement provides for the withdraw of the lien.
Lis Pendens: The filing of a lis pendens does not perfect a lien. The purpose of recording this document is to give claimants constructive notice of a potential lien. Once determined by a court, the filing may result in a perfected lien.
FIVE MAJOR ASSIGNMENT ERRORS
(In Missouri mortgages (proper term is deed of trust) are assigned, not promissory notes. Get it right the first time. An assignment is a document that shows the transfer of a deed of trust from one person/entity to another.
- Data errors: Incorrect book/page, leaving blank the name of the assignee. You cannot fill in the blanks after the document has already been signed and notarized. Missing chain of assignment.
- Not recording assignments: People are cheap when they do not record an assignment. Failure to record may not be required by law but it does cause tremendous title issues.
- No uniformity in recording: Creating a template without knowing the county recording requirements is suicide. There are more than 3,600 recording districts in the United States. Many have different recording requirements, regulating font size, margins and signatures.
- MERS: Mortgage Electronic Registration Systems no longer commences legal actions in its name. As a result assignments must be prepared. There is a backlog. There are times when the MERS number is not on the assignment when it is recorded or the wrong number is attached to the loan or MERS forgot to deactivate the number after it has been assigned.
- No Timely release: If the loan is paid off, a release is required to be recorded.
Purchasing property at a tax sale is a great way of acquiring a house at an inexpensive price. The laws are very specific and any mistake in the procedures will result in a loss of the property. St. Louis City rules require the court to confirm the tax sale; however, in St. Louis County it is best practice to file a Quiet Title lawsuit. Our firm can guide you through this process.
Real Estate Tax Foreclosure Sale purchases are profitable. The key is to know where to purchase and the laws for your area. There are three (3) sets of Missouri statutes used for the sale of real estate for non-payment of real estate taxes: (1) laws that apply to the City of St. Louis, Missouri, (2) laws that apply to Jackson County and which may apply to some parts of Kansas City, Missouri, lying outside Jackson County, Missouri , and (3) laws that apply to all other counties like St. Louis County.
Delinquent Real Estate Tax Sale procedures currently used in the City of St. Louis and JacksonCounty are based upon judicial foreclosure of tax liens through land tax suits and provide judicial confirmation of the delinquent tax sale as one of the procedures followed in land tax suits.
Delinquent Real Estate Tax Sale procedures currently used in the County of St. Louis is based upon an administrative action (no judicial foreclosure) by the County Collector of Revenue. You will need a finish up the process with a lawsuit.
Notice is critical. Take for instance a case where a contractor filed a proper mechanic’s lien statement but was not given notice of the tax foreclosure sale. The contractor’s identity and address was reasonably ascertainable. So the court found that the tax sale was to be set aside. (See, In the Matter of Foreclosure Liens for Delinquent Taxes by Action in Rem v. Parcels of Land, Case No. WD 75353)
Service Insufficient, Tax Sale Set Aside
Nothing “required [taxing authority] to perform an open-ended internet search to locate a property owner who failed to provide the correct mailing address” but, when taxing authority knows that mailing of foreclosure notice to persons described in statutes has failed, it must take further steps. Taxpayer has the burden to prove that further step “was practicable under the circumstances.” Mailing to “occupant” was “available, reasonable, and practicable under the circumstances.”
In The Matter of Foreclosure of Liens for Delinquent Land Taaxes By Action in Rem: Collector of Revenue, by and Through The Director of Collections for Jackson County, Missouri vs. Terry Holton, Christina McIntosh
Missouri Court of Appeals, Western District – WD76280
Tax Sales are held on different dates and times based on the County.
St. Charles County– Real Estate Tax Foreclosure Sales are held once a year in August.
St. Louis City-Real Estate Tax Foreclosure sales are held 5 times a year(May, June, July, August and October) at 9:00 am in the lobby of the Civil Courts Building (10 N Tucker Blvd).
Jefferson County Real Estate Tax Foreclosure sales are held once each year at 10:00 a.m. on the fourth Monday in August.
Missouri’s mechanic’s lien laws allow for a contractor, subcontractor, materialmen, and others to take a security interest in the title of a property upon supplying labor or materials to improve such property. Chapter 429 of the Missouri Code contains the procedures for obtaining, perfecting, and enforcing mechanic’s liens.
For a lien to be valid you must comply with all procedural requirements. NOTICE is the most important requirement which must be personally served. Original contractors must give owners Notice of the Owner’s property rights. An original contractor is one who contracts directly with an owner to perform labor or furnish materials. Errors in the information contained int he notice of rights that may prejudice the owner, title company, disbursing company or subsequent purchaser will cause forfeiture of the claimant’s lien to the extent of the prejudice. DEADLINE for filing a claim is only six (6) months from the date of last labor or material provided to the property. (See Section 429.080). A LIEN STATEMENT (Section 429.080) must include a “just and true account of the demand”, a true description of the property and the name of the owner, contractor or both and be verified by oath. It is important to review the invoices attached to the Lien and determine if non-lienable items are included such as equipment rental, downtime, other laborers/material providers who have signed lien waivers or work already addressed by prior lien waivers. If still not paid, a lawsuit (Petition to Enforce the lien) must be filed within Six (6) months of filing the lien statement.
Examining Priority is critical. When did the lien attach to the property? When did the other interested liens attach? With a Mechanic lien there is a FIRST SPADE rule (Section 429.060) where the lien attaches when it becomes first visible that actual construction of new property or improvements to existing property is in operation. All mechanic’s liens on the same project are on the same footing and have equal priority. Generally, mechanic’s liens DO NOT have priority over purchase money mortgages where the money was used to purchase the real property.
LIEN WAIVERS are necessary to protect homeowners. As to subcontractors, there is no waiving of their lien rights for partial payments without an unconditional, final lien waiver.
DEFENSES to a Lien include failure: (1) to file a just and true account, (2) to provide Notice by original contractors, (3) to file a Lien within 6 months, (4) to commence a lawsuit within 6 months, (5) Defective work, (6) to accurately describe the legal description of the property, (7) Already paid, (8) lien is invalid because it is based on a purchase and sale agreement and not a construction contract, (9) lien waiver executed, (10) failure to join all necessary parties, (11) lien includes work performed by others, (12) lien includes non-lienable items, (13) lien claimant did not name or properly serve the lender.
Lawn work does not extend deadline for lien according to the 2013 ruling by the Court of Appeals in the Western District of Missouri. Manning Construction Company Inc. v. MCI Partners. LLC. The court determined that the work was added solely to extend lien rights after the work for the project had been completed.
The law provides landlords and tenants with rights and obligations. Whether it is a dispute regarding the terms of a lease or an issue with possession of the premises, the firm has extensive experience handling lease disputes efficiently and effectively.
Laws passed in 1997 offer greater protection for tenants renting from unresponsive landlords as well as more options for landlords to get rid of drug dealers and destructive tenants. Among the provisions:
● Authorizes county courts to order the quick removal of tenants involved in drug-related criminal activity or violence, even when there is no arrest. Prior written notice is not required to remove a tenant.
● Allows landlords to remove abandoned personal items once they have complied with notice requirements.
● Makes a landlord guilty of forcible entry for willfully interrupting utility service, unless it is done for health and safety reasons.
● Allows a tenant, under certain circumstances and after giving a landlord 14 days’ notice, to deduct one-half month’s rent or up to $300 (whichever is greater) for repair of code violations when a landlord neglects property. This can be done once a year.
● Allows a landlord to double the rent when a tenant lets another person take over the premises without the landlord’s permission.
Leases: Renters are bound either by an oral or written agreement.
WRITTEN AGREEMENT: Written agreements are more common and better protect the tenant and the landlord. When a lease is signed by both parties, it becomes a binding legal contract. If any party does not fulfill the terms of the lease, the person who defaults can be sued. A tenant is not excused from honoring a lease simply because he does not understand or did not read it.
When considering a written lease agreement, tenants should:
● Read the entire contract and ask questions or obtain a legal opinion about unclear provisions.
● Ask for changes. If tenants dislike certain provisions in the lease, they have the right to ask landlords to amend the lease with written changes. However if a landlord refuses, which he has a right to do, a tenant must decide whether to sign the lease. If changes are made, both the tenant and landlord should initial the changes.
BASIC LEASE PROVISIONS: At a minimum the lease should include:
● Landlord’s name, address and phone number.
● Address of rental property.
● Amount of monthly rent.
● Rent due date and grace period (if any).
● Amount of security deposit and conditions for its return.
● Length of lease.
Security deposit: Under Missouri law, a landlord can only require a maximum two months’ rent as a security deposit. At the end of the lease, the landlord has 30 days to return the security deposit with an itemized list of damages for which any portion of the deposit is kept. During that 30-day period, the landlord must notify the tenant of the time and date when the landlord plans to inspect the dwelling. The tenant has the right to be present during the move-out inspection, which must be conducted at a reasonable time. To avoid last-minute problems, tenants should ask the landlord in what condition he expects the unit to be left. Then allow plenty of time for cleaning. The landlord may keep all or part of a deposit to pay for actual damages (not for normal wear and tear), unpaid rent, or lost rent due to the tenant moving out without adequate notice. The tenant may not use the security deposit to pay the last month’s rent. Remember to give the landlord your forwarding address in writing. Otherwise, he may not be able to send your deposit.
Our firm has extensive experience in easement disputes including border dispute and landowner rights.
Sometimes, people other than the owner of a piece of property have the right to use the owner’s property. This right may be to go across the property to get to a road. It may be to park cars. It may be to install or service utility lines. A right to use property that lasts forever is called an easement. A right that lasts less than forever is called a license. An easement can be given to a person or company (this is called an “easement in gross”) or it can be given to whoever owns another piece of land (this is called an “easement appurtenant”).
Easements may be created in a written document that is recorded in the county in which the subject property is located. Easements may also be created by prescription (using the subject property for more than 20 years without permission), necessity (to give a landlocked property access to a public road) or by implication. The law relating to easements is complex. There is frequent litigation about whether an easement exists, where on the property the easement is located, who has the duty to maintain an easement, whether the right is a license or an easement, whether an improperly drawn easement can be corrected, and on other easement issues.
Condemnation is based on the principal of compensating people whose property is acquired through eminent domain for the benefit of the public. However, a municipality or county will only want to pay the minimum. Yet the statutes call for “just compensation” that encompasses a payment for the property that is based on a “fair market value” .
In addition to this amount a homeowner may be entitled to an additional amount for “heritage value” which is defined as 50% of the fair market value of the property that has been owned within the same family for 50 years or more. The Missouri Supreme Court in St. Louis County, Missouri v. River Bend Estates Homeowners’ Association, Case No 92470 (2013), upheld the heritage value to property owners in an eminent domain case. The County thought $160,000.00 was sufficient but the court decided on $650,000.00 in heritage value.
At the firm we offer extensive experience and proven results in condemnation proceedings, including representation of the condemning authority, property owners, and lien holders.