Legal Question in Real Estate Law in California

land

Bought land to break into lots and sell. I am a realtor. My real estate company I work for loaned me $300,000 with the note due in July. I entitled the land and I found a buyer and ''was'' to close before that time. My ''buyer'' asked for more time to close. I notified my broker- and he did not call the loan. I made on time payments for July, Aug, Sept and Oct. Today the land official fell out of escrow. I asked my broker for time to resell the lots - he asked me to just sign over the land to the company. I can not refinance residential land - those loans have dried up. I may find private funds- but I need time. I sold it for $600,000 though today I would be lucky to get $500,000. Question- since they took my payments how much time do I have before they can call the note? Do they have to give me a certain amount of time...since by their actions it showed that they were willing to take my payment and continue on. Also I have an unsecured promissory note of $100,000 that I used to develop the land- can I record it onto this land so that if I sign it over and they sell it, they would have to pay back that investor with the profits? Also if my broker sells it for more than the first and second do I get the difference? -Diane


Asked on 10/22/08, 8:33 pm

1 Answer from Attorneys
David Gibbs The Gibbs Law Firm, APC

Re: land

I am a bit surprised that as a licensed real estate sales person you don't know the answer to many of these questions. As a part of your licensing eduction, you covered most of this. In any event, the acceptance of payments after the due date has very little to do with anything. Their acceptance of payments probably doesn't in any way alter the fact that the loan is due, and the holder can start a foreclosure at any time. Again, as a licensed real estate salesperson you should know, or can research the timing for a foreclosure, so I am not going to repeat that information here. You have some time, but you cannot drag your feet. As for the unsecured note, you could theoretically record a deed of trust in favor of that lender against the property, but if your broker knows what he is doing, he will not take a deed-in-lieu of foreclosure once he discovers the subordinate debt, and will instead foreclose and wipe out the DOT, and you are back to square one with an unsecured obligation. If the broker sells the land down the road, you get nothing - once you sign it over, or he forecloses, you have no further rights or interest in that property, and the broker will keep any upside. Again, this is something you should know.

*Due to the limitations of the LawGuru Forums, The Gibbs Law Firm, APC's (the "Firm") participation in responding to questions posted herein does not constitute legal advice, nor legal representation of the person or entity posting a question. No Attorney/Client relationship is or shall be construed to be created hereby. The information provided is general and requires that the poster obtain specific legal advice from an attorney. The poster shall not rely upon the information provided herein as legal advice nor as the basis for making any decisions of legal consequence.

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Answered on 10/23/08, 12:36 pm


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