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  1. #1
    Join Date
    Jan 2009
    Location
    Morenci, MI
    Posts
    2

    Default Home Purchase With an Undisclosed Lease on Land

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

    Below is the description of the situation we have on the property we purchased on July 31st 2007 in Morenci, Michigan 49256

    When the property was purchased we were told it was free and clear of any recorded lien or right to lien, easements or claims.

    Early in 2008 we approached the farmer that farms the acreage around our property about 2 acres that he has planted that is on our 6.669 acres of land. This was after discussing with them multiple times that our property extends into their field, and we wanted to utilize part of that space to plant a garden and some trees. Not until after they had this 2 acres planted did they present the lease document showing they have that 2 acres under contract with the owner from 1999. The lease was filed in February 1999 and was for a 30 year lease based on a one lump sum payment. (Making the agreement end in 2029)

    Up until this point no one, including the realtor, title company, farmer, or seller (Fannie Mae) disclosed any of this information to us.

    We were sold the property free and clear of any legal claims and thus we own and have access to 100% of the land. We need to rectify this as I am not happy that almost a third of my property is at this point believe to be under a lease contract that we had no knowledge of or benefit from.

    Since this we have contacted the Title Insurance company and they have provided us with a claim number and little else.

    I have retained a lawyer that assisted in talking with the farmer to attempt to negotiate a buy out of the lease and that was not succesful. Other than this we have sent a letter to the Title Insurance company stating that we would prefer our our land, but if that is not possible gave them a figure based on the value of the land and the rental fees we are out for the remainder of the lease (21 years after we purchased the property)

    Since the lease was signed the property has gone through the following:
    a) Sold by the owner who signed the lease - around 2004
    b) House Foreclosed on - early 2006
    c) We purchased the property from Fannie Mae - July 2007

    My initial reaction was the lease would not be valid since the property was Foreclosed on, but my lawyer tells me it is. The lease is wrote in very simple terms stating who what and when, no outs, conditions, etc. The lease was filed at the county in February 1999.

    Any insight or help would be appreciated.

    FYI: I did file a claim with the Michigan Office of Financial and Insurance Regulation on Monday of this week.

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,844

    Default Re: Home Purchase With an Undisclosed Lease on Land

    Normally a lease would terminate with foreclosure. What was your lawyer's explanation for why that wasn't the case with this lease?

  3. #3
    Join Date
    Jan 2009
    Location
    Morenci, MI
    Posts
    2

    Default Re: Home Purchase With an Undisclosed Lease on Land

    That is why I hired a lawyer; he stated in Michigan the lease carries from owner to owner and transfer of ownership, even foreclosure does not negate the lease.


    Also if it didn't transfer, wouldn't the Title Companys lawyers jump all over that and this would be all settled. So I do think my lawyer is correct in what he has told me.

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