I found some strange documents recorded with notary in this property: 639 Duer Road, Sebastopol CA 95472.
A lease agreement between 639 Duer Road Easement, LLC and the owner of this address.
The landlord is 639 Duer Road Easement, LLC, the tenant is the owner of this address. It is a fixed lease from 2/2/2024 to 2/2/2027. The signature name of the landlord is different from the owner. I can’t find the business name of 639 Duer Road Easement, LLC in Secretary of State’s website. I doubt that the LLC and the lease agreement are both illegal. But both are recorded in Sonoma county.
Another document is a Conservation easement. The grantee is 639 Duer Road Easement, LLC, Grantor is the owner of this address.
I want to know if these documents will affect the owner after foreclosure. Since this LLC does not exist (At least I can’t find it), I doubt if these documents are legal. Any advice? Thanks!
You would have to honor a fair market lease to an unrelated party that was made after the loan, most everything else recorded after the loan should be wiped out. I always recommend developing a relationship with a title (not escrow) officer at a local title company. Take them to lunch and get their (non binding) opinion. I learned more about title that way then any other. If you plan to resell, what matters more than what is true/false or right/wrong, is whether or not a title company will insure it.
Hi Sean,
Thanks for reply. I am planning SB1079 bid on this property. What you said is out of my knowledge. It sounds much more complicated than what I thought.
But I really doubt that the easement and the lease agreement are illegal or faked.
The conservation easement:
Grantor is 637 Dure Rd easement, LLC, grantee is the owner of property in 637 Dure Rd. It is like the owner added a conservation easement to her own property. And I couldn’t find that LLC is a registered LLC. I don’t think the LLC is a legal company.
The lease agreement:
Landlord is 637 Dure Rd easement LLC
Tenant is the owner of 637 Dure Rd.
It is a fixed lease agreement from 2/2024 to 2/2027. How can an unregistered LLC lease the property to the owner of the property?
Since I am going to bid in SB1079. I can’t sell and lease the property in one year. Do I have to lease the property to the person in that lease agreement?
If I don’t resell immediately. Will the title company insure the property later? In what situation a title company won’t insure the title? Is it typical that a property from foreclosure won’t get title insurance? Thanks!
Hi Sean,
You said :" You would have to honor a fair market lease to an unrelated party that was made after the loan,"
Do you mean that I have to follow the lease agreement if it is recorded? Then that property is not eligible for SB1079 bidding since I have to live there.
A lot of foreclosures have tenant. Can I let the tenant go if their lease agreement is not recorded in county?
Yes, buying foreclosures at trustee sale is complicated and carries significant risk.
Regarding bidding as a prospective owner occupant note the following from SB 1079
“(e) A prospective owner-occupant shall not be in violation of this section if a legal owner’s compliance with the requirements of Section 2924n renders them unable to occupy the property as their primary residence within 60 days of the trustee’s deed being recorded.”
and here is 2924n
“2924n. Nothing in this article shall relieve a person deemed the legal owner of real property when the trustee’s deed is recorded from complying with applicable law regarding the eviction or displacement of tenants, including, but not limited to, notice requirements, requirements for the provision of temporary or permanent relocation assistance, the right to return, and just cause eviction requirements.”
I believe the laws above clearly answer your question.
I am not sure about my understanding of (e) and 2924n since I am not native English speaking.
My understanding is that I won’t be in violation of SB1079 if I can’t move in and have to lease the house to the previous owner per her recorded lease agreement after I used all eviction method in 2924n
Am I right? I have been struggling in this.
Thank you very much!
Cluo—that is how I would read it as well. That said, you must understand that no one can give you certainty, not even an attorney - only opinions. What it comes down to is your risk tolerance. I never recommend that someone buy a foreclosure for their residence. Sure, you can save some money, but in the long run it is more important to find the best home, not the best deal. If you are looking to invest, I’d suggest starting with simpler deals and working your way up to ones with more complexity as you gain experience. Really diving in and learning how to tackle those complex deals is definitely worthwhile over time, as there is less competition on those, but likely to overwhelming to do as your first one.
I hope that helps.
I asked a few title companies, and they do not insure title for houses from auction. How important it is to insure the title if I want to sell it? There are so many auctioned houses, how do other people do it?