DEAR BOB: In February I closed on the “as is” purchase of a condo, which was a foreclosure sale by Fannie Mae. At the closing, I was surprised by a $600 debt due to the condo homeowner’s association. I thought Fannie Mae should have paid this. The lawyer who handled the closing agreed with me, but it had to be paid or I wouldn’t receive title. I reluctantly paid. When I protested to the condo association, I was told to hire a lawyer because it is my responsibility to pay. What is your opinion? –Ken M.
DEAR KEN: When buying an “as is” foreclosure property from the foreclosing lender, which was Fannie Mae, it is customary to deliver marketable and insurable title. Frankly, I am surprised Fannie Mae refused to pay that $600 condo association lien. The sale term “as is” refers to physical condition, meaning the seller will not pay to make any repairs. It does not mean the seller will surprise the buyer with undisclosed liens that the seller refuses to pay.
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Thankfully, the amount is small. I suggest you write a very polite demand letter insisting Fannie Mae reimburse you $600 for the unexpected cost you had to pay at the closing. Ask for payment to be received within 10 business days. Send it by registered mail to be sure Fannie Mae receives it.
If you don’t receive payment, bring a local Small Claims Court action against Fannie Mae. Chances are a Fannie Mae representative will not show up and you will win a default judgment.
YOUR “UNDERSTANDING” ABOUT WATER LEAKS DOESN’T MATTER
DEAR BOB: We bought a rental house “as is” but with the understanding it had no water leaks. That is what the written disclosure said. However, since purchase we have been fixing roof leaks for months now. My tenants told me the past landlord knew of the leaks but would not fix them. What can I do to make him pay for the repairs? –Kevin C.
DEAR KEVIN: Your “understanding” doesn’t matter. Did the seller’s written disclosure statement say there were no material defects in the house? If so, you might have recourse for misrepresentation if you can prove the roof leaked at the time of the sale.
Depending on your cost of the roof repairs or replacement to stop the leaks, you might want to take the seller to the local Small Claims Court. If you can get your tenant to testify as a witness that the landlord knew the roof leaked before the sale but he refused to repair it, that is excellent evidence for you.
However, if the cost of repairs or roof replacement exceeds the local Small Claims Court jurisdiction, then you can either reduce your claim to that maximum amount or hire an attorney to sue the seller in a formal court proceeding.
NO ADVERSE POSSESSION AGAINST GOVERNMENT, UTILITY OR RAILROAD
DEAR BOB: Can you stand another adverse-possession question? There are numerous properties in my city that are owned by government agencies and are not being used. Is there any way I can gain title by adverse possession to put these properties to use? –Rodger A.
DEAR RODGER: Sorry. Adverse-possession laws do not apply to real estate owned by any government agency, public utility or railroad.
The reason is these landowners cannot periodically inspect their many properties to see if someone like you might be adversely possessing them without permission, such as by planting a flower garden for the required number of years. For more details, please consult a local real estate attorney.
The new Robert Bruss special report, “Everything You Need to Know About the Pros and Cons of Reverse Mortgages for Senior Citizen Homeowners,” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, Calif., 94010, or by credit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this column are welcome at either address.
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