I sold 5 acres to builder & carried 1-yr. note, which expired in March. He has cont. to pay interest but we have no new note. What is legal status?
Question Details: In current economic slump, the buyer of my 5 acres has been unable to find another buyer to build a custom house for. 1-yr. note has expired, and no new note has been signed while buyer/builder and I discuss possibly making minor modifications to original sale (trust deed). A couple of months ago, buyer asked to return land in exchange for down payment, but I responded that I can't do that (financially), and don't want to. So far, buyer has continued to pay monthly interest and has now listed the acreage for sale. What are my current liabilities and what should I do now to protect the sale?
Real Estate Law Answers
If your note has expired, then you likely have the right to foreclose on the property. If you foreclose, you will be able to keep all payments made as well as any down payment you received. You need to decide whether you want to keep accepting interest only payments from the builder or take the property back. There would be no reason to return the downpayment in exchange for getting the property back.
You should consult with an attorney to review your current status based on the specifics of the note and trust deed that you have with the builder.
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