We graded a house pad and the owner built a home on it. He ran out of money before completion of the project. We have recorded promissory notes with payment schedules that were not honored. I have had liens on the property and when it came time to get a draw on the construction loan I would remove lien. We did this several times. I have $25K in lawyer?s fees and a balance of $60K still owed to me. I have a lien and a deed of trust all recorded with the county the property is in. The property is valued at $1million and he owes $1.5 million on various loans (construction and property). What?s the chances of me getting paid in full?
Totally depends on the position of your lien vs. the others. If yours was recorded first it is nearly certain you’ll recover everything - if you were recorded last I’d say you’ll very likely get nothing.
Add up the loans recorded before yours and you’ll get a pretty good idea of where you stand.
I was the first one to put a lien on the property, because I did the grading. The owner was getting draws from the bank upon completion of phases of construction. I was paid about 1/2 of what he owed me before he defauted on the loan. It’s been 2 1/2 years of waiting and paying lawyers to fight for what I should have never let get this far out of hand. I guess what troubles me is the property has a $1.5 million loan balance and I would bet it will sell for around the $1 million mark. Do you think I will get a % of my money or
would I get paid out first from the proceeds?
Again… depends on the priority order of the loans and liens. You say you have the first lien - but are you ahead of the loans too? In determining priority order loan vs. lien makes no difference. So if that $1.5M loan was recorded before your lien, you will likely get nothing.