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  1. #1
    Join Date
    Nov 2014
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    Default My Tenant in Common May Have Committed Bankruptcy Fraud

    My question involves real estate located in the State of CA:

    Hi,

    I own several large parcels of land as tenants in common with one other person. 4 years ago, I signed a contract to sell 4 parcels of my land. Out of the clear blue, a lawsuit was filed by a party that claimed he held a Deed of Trust for $100,000. that was filed and recorded in 1984. In his complaint, he states under penalty of perjury, that my co-owner came into ownership of the properties by defrauding the bankruptcy courts. He claims that her father, who was the owner and trustor of his deed of trust declared bankruptcy, intentionally failed to inform the bankruptcy court of these properties, and transferred title of several properties to my co-owner. The bankruptcy took place about 20 years ago.

    After 2 years, my co-owner reached a settlement with the lien holder and the sales transaction concluded. Title insurance was issued.

    Does anybody know what happens in a situation like this? I’m scared that I could build a huge development on the property only to have it confiscated or co-owner’s portion seized by the feds? Could this happen?

    Even though the lawsuit was settled with no final judgment, at this time I’m quite sure that the bankruptcy fraud is true. I’m trying to research this prior to speaking to a lawyer. Thanks :-)

  2. #2
    Join Date
    Sep 2010
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    19,901

    Default Re: My Tenant in Common May Have Committed Bankruptcy Fraud

    How did you come into ownership? Does it predate this deed of trust or were you deeded ownership afterwards by your cotenant? Did you have title insurance before this hoohah started? What did the settlement between the alleged trustor and your contenant say? Frankly, I think you need to take everything to an attorney.

  3. #3
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    Nov 2014
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    4

    Default Re: My Tenant in Common May Have Committed Bankruptcy Fraud

    I came into ownership much later in 1991. These properties always had 2 chains of grant deed and my share, undivided interest, was sold to me by her former tenant in common. She didn't even have to know about the sale. My chain of title has always been free and clear. All encumbrances in history were only filed on her portion of the property. Yes I have title insurance in 1991 and during the last transaction, the Title Company assured me that my portion of the property was perfect, always has been, and none of co-owners problems can affect my ownership of my properties. I believe the settlement was private, I know that the lawsuit and sales transaction could not close until the case was settled and deed of trust was reconveyed. He was suing for an exorbitant amount: principal, 28 years interest & fees, fraud, punitive damages... A lot of people became aware of this ordeal, ugh.

  4. #4
    Join Date
    Oct 2006
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    16,474

    Default Re: My Tenant in Common May Have Committed Bankruptcy Fraud

    Quote Quoting Contango
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    I came into ownership much later in 1991. These properties always had 2 chains of grant deed and my share, undivided interest, was sold to me by her former tenant in common. She didn't even have to know about the sale. My chain of title has always been free and clear. All encumbrances in history were only filed on her portion of the property. Yes I have title insurance in 1991 and during the last transaction, the Title Company assured me that my portion of the property was perfect, always has been, and none of co-owners problems can affect my ownership of my properties. I believe the settlement was private, I know that the lawsuit and sales transaction could not close until the case was settled and deed of trust was reconveyed. He was suing for an exorbitant amount: principal, 28 years interest & fees, fraud, punitive damages... A lot of people became aware of this ordeal, ugh.
    I am still uncertain as to how the party that sued had anything to do with the bankruptcy...and who the person who sued was. That is one of the reasons why you need to be talking to an attorney, so that you can lay out all of the details to the attorney.

  5. #5
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    Nov 2014
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    Default Re: My Tenant in Common May Have Committed Bankruptcy Fraud

    The Deed Holder (plaintiff) sued for quiet title but ultimately only sued my Co Tenant for the $100,000. DT+ that he thought was unrecoverable. I had nothing to do with any of this. This was a significant transaction and he learned about the sale in progress. The Plaintiff turned out to be 95 years old and a well known public figure. The purchaser needed 100% of the properties free and clear for a development project. I know I must talk to attorneys but I'm just trying to prepare for my next step, attorneys.

  6. #6
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    Oct 2006
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    16,474

    Default Re: My Tenant in Common May Have Committed Bankruptcy Fraud

    Quote Quoting Contango
    View Post
    The Deed Holder (plaintiff) sued for quiet title but ultimately only sued my Co Tenant for the $100,000. DT+ that he thought was unrecoverable. I had nothing to do with any of this. This was a significant transaction and he learned about the sale in progress. The Plaintiff turned out to be 95 years old and a well known public figure. The purchaser needed 100% of the properties free and clear for a development project. I know I must talk to attorneys but I'm just trying to prepare for my next step, attorneys.
    Again, you really need to be speaking to an attorney because you are not giving a clear picture of the situation. I realize that you are trying, but you are not giving a clear picture. Perhaps that is because you don't have enough information to give a clear picture. You need a face to face meeting with an attorney.

  7. #7
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    Nov 2014
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    Default Re: My Tenant in Common May Have Committed Bankruptcy Fraud

    The Bankruptcy Fraud was stated in his Formal Complaint, out of the clear blue... It appears to be true.

    It's a mess for me because this is consideration now prior to any next moves on my properties

    - - - Updated - - -

    I believe all claims are released now on the property. The problem is that Plaintiff's Complaint states Bankruptcy Fraud and co tenant's title may have been achieved fraudulently. I wish I could find some definitive case law but I can't. I'm told that if it is discovered, regardless of how many times it has changed hands, co tenant's property belongs to the feds.

  8. #8
    Join Date
    Sep 2011
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    OH10
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    Default Re: My Tenant in Common May Have Committed Bankruptcy Fraud

    You need to have claim releases from everyone involved recorded with the county on the deed. Use a land lawyer to make sure you get everyone.

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