Foreclosure sale might help recoup costs
Dear Mr. Feichthaler: During the downturn, my husband and I decided to sell our rental property to our daughter. To protect our interests, we had her sign a mortgage and note, and the mortgage was recorded. Although she did pay the taxes and insurance, she never made payments to us as required by the note. Last year, she stopped paying taxes and insurance, too. Recently, she left town without telling us, and we have no idea where she is. We have a feeling she may not return soon, if ever. We do have a document from her giving us authority to take care of the house when she is out of town, and we wondered if we could rent or sell the house to get our money back.
– Barbara
Dear Barbara: First, you made a good decision when you decided to record the mortgage and make it official. If you had simply given the house to your daughter, you would have no recourse. The document you have giving permission to take care of the house is likely not sufficient to rent or sell the house. You would need a power of attorney that was specific to allow you to sell or rent the property. You can, however, continue to maintain the property so it can hold its value. Your note and mortgage likely allows you to pay for items like insurance, taxes and maintenance if your daughter failed to do so.
This brings us to your options. First, if you could make contact with your daughter, you could obtain a deed in lieu of foreclosure, which would eliminate the need to go through the court process. If she cannot be found, or will not cooperate, you may proceed with foreclosure. If there is equity in the property after the sale, your note, as well as many expenses you have made, will be collected after the sale. If you are the highest bidder at the foreclosure sale, you would take possession of the property. The costs of the foreclosure may also be recouped through the foreclosure sale.
These issues can become complicated, and professional guidance should be sought.
Eric P. Feichthaler has lived in Cape Coral for 27 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through his chairmanship of the Harney Point Kiwanis Club KidsFest, which provides a free day of fun and learning to thousands of Cape Coral families, and funds numerous scholarships. He has been married to his wife, Mary, for 13 years, and they have four children together. Recently, he earned his board certification in Real Estate Law from the Florida Bar. He is also a Supreme Court Certified Circuit Civil Mediator.
This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.