Expert: Dick Dennis - 1/25/2010

Question
Hello my name is Norm.
Back in April of 09' I purchased a home on a land contract. I don't have the best credit due to losing home from financial problems and lender refusing to work with me. That aside. I found a home within my price range and it seemed like a pretty good deal. The home needed work but nothing I couldn't do or hire someone to do. The home was completely without electrical and plumbing, it all had to be replaced. Including needing the meter box and wiring on outside of home. With all that being said. I have been in the home now since April 1st. The company is based out of California but have an office with staff set up here in Detroit MI, which I live in the Saginaw County MI area. The Land Contract stated they were to supply a furnace, hot water heater and new water pipes if needed. Well after 7 weeks they finally brought those items; which were used and the furnace was out of a mobile home and I couldn't get anyone to install it for that reason. My home is 1246 sq ft. So I called them and weeks went by nothing, finally I just bought a used furnace. I then called them again and got very rude on the message machine. That afternoon I got a call; the person stated they were not aware and that someone would promptly bring out a new furnace. I never informed them I bought my own. Another week went by and I heard nothing. So I called the company in Detroit, they stated there were not told to bring me anything, that the contract didn't state what type of furnace and the one they dropped off was taken out of a home so it should be fine. I said you were suppose to replace water pipes too; they said no only pvc pipes if you had them; we know that home had all copper if any was left. I had enough and just let it go. So all these months have passed. The middle of December I start to wonder where my tax bill is for my winter taxes, which is the only taxes according to contract I should owe. Well it never came, so I called Saginaw County; left messages for almost two weeks straight. Finally I get a return call that I need to call the Village I live in. I do, they only work a couple hours a day and left numerous messages. Finally the beginning of January I get a return call from Village. They inform me they sent all the bills out to the Owner. I stated I was on a Land Contract. The woman replied that the contract had never been filed, but a quick claim deed had been. The deed was just them transferring the house in their own company between the different names they have. So I ask if I can file it so I get the tax bills. She replies no, only the Owner can and to contact them. I attempt to call them and find out they are no longer holding my contract; their other name is and I need to call that number. Before I can I come home to a 10 day notice on my door. It states that I owe almost 2,000 dollars. I have ten days to pay or leave. I immediately call and leave message. The next day some rude guy calls my phone and proceeds to tell me that I have breached the contract because I didn't pay the taxes. I inform him that I didn't receive a bill and that they never filed the Land Contract for me too. He is saying it doesn't matter its my responsibility and they payed them so either I pay them now, agree to go on a 30 changeable interest rate or move in ten days. I am currently on a 15 loan and my rate is really low. The winter taxes are due to be payed by the 15th. This was last Friday I got the notice. I do not know what to do. They never recorded the contract which in it states they are suppose to do within 30 days. So what can I do? Should I just move, what kind of consequences will I face. Mind you the home I found out after moving in completely floods all the bedrooms, kitchen and bathroom. This happens because the home is older built on a cement slab. The house has lifted away from the slab. The one bedroom has to be completely remolded due to this. The first major rain storm we got we were away from home and came back to a flooded home. Home owners doesn't cover flooding unless a pipe burst. Thank you for your time.


Norm

Answer
Land contracts are the primary way of owning and conveying property in Michigan, Norm. But what is a hassle about it is that the buyer actually doesn't own the property until he has lived up to all terms and conditions that he agreed to when he signed that land contract.

Since you have sellers who are not cooperate, you can do one of two things: 1. Hire a real estate attorney and him/her get the sellers on the ball and then make sure the transaction comes to a successful conclusion. That's not to mention the work that should be done.

2. But what you describe about the house, you might be better off to leave the keys and go find a good rental somewhere, giving you time to improve your credit for purchasing a home in a few years and saving up the money for the down payment. One thing good about this walking away from a land contract is that it does not affect your credit because there is nothing of record of your ownership. In fact, with you paying the taxes you don't even get that credit. Only with the IRS can you get credit in filing your return (just make sure you keep all receipts). I do wish you well.

Dick Dennis
dixiedee13@aol.com