Ask The Expert
Q I’m selling a four-plex, and would like to sell the individual units to increase my profits. Is this possible?
A Yes, if you convert the property to either condominiums or townhouses before listing it for sale, you can sell individual units. Townhouses are easier for your purchasers to finance, but are only an option if each unit has access to a public road and onsite parking. If there is a common driveway and parking area, you can convert it to condominiums and set up a property owners’ association to own and maintain the common areas. However, you can only convert property to a townhouse or condominium complex if the area is zoned for them; please check with the city-parish planning commission or your own attorney before proceeding.
Q I would like to buy a strip of property from my neighbor so that my yard will be wider, how do I accomplish this?
A Your first step is to hire a surveyor and have him review the subdivision map. The surveyor will measure and confirm that your neighbor will have enough frontage on a public road to meet the city-parish’s minimum requirements after the sale. Assuming the requirements are satisfied, the surveyor will prepare a survey/map showing the relocated property line and submit it to the planning commission for approval. Once the map is approved, we can execute an act of sale wherein your neighbor conveys the property to you; the new survey will be attached to this sale before we file it of record.
Q I’m purchasing a new home and would like to put it in my ten year old daughter’s name. Is this possible?
A It is possible, but I don’t recommend it. If you’re financing the purchase, your daughter must sign the mortgage and other financing documents. Since your daughter is a minor, you must open a tutorship proceeding in district court and obtain a court order authorizing you to execute these documents on her behalf. Also, you’ll need a court order to sell or refinance the property before she turns eighteen. In addition to the court costs and attorneys fees involved, the time delays to obtain these court orders may interfere with your proposed transactions, and there will be limitations on how you utilize the proceeds from any sale or refinance because the funds belong to the minor child and are subject to accounting at termination of the tutorship.
Q I’m purchasing a new home from the contractor who built it and am concerned about liens from unpaid suppliers. How can I protect myself?
A There are two ways to protect your self. The first is to have your closing attorney confirm that a Notice of Substantial Completion has been filed of record, then schedule your closing after the lien period has expired. The lien period is either thirty or sixty days after the Notice of Substantial Completion is filed. The time depends on whether or not a construction contract was filed before construction began. Most people can’t wait until the lien period expires, i.e. because their loan commitment will expire or they need a place to live immediately. In this situation, you should purchase an owner’s title insurance policy at your closing. This policy provides affirmative coverage against construction liens.
Q What is title?
A Title is a general term that identifies your legal right to own, possess, control or sell land. Title takes into account all previous ownership, uses and transfers. To transfer real estate, a title search must be performed and reveal that the property is free of defects and encumbrances.
Q What is a title search?
A A title search is a detailed examination of the historical records concerning a property. These records deeds, mortgages, liens, court records, property and name indices, as well as any other document filed of record that may affect the property or one of it’s owners. The purpose of the search is to verify the seller’s right to convey the property and to discover any defects or encumbrances on the title.
Q What is a title defect or encumbrance?
A A title defect is something missing from the chain of title; an example would be an heir of a previous owner who may have a claim to the property. An encumbrance is a claim upon the property by someone other than the landowner; an example would be an easement in favor of a utility company that provides electricity to your neighborhood. A mortgage company will require proof that the property is free from defects and unacceptable encumbrances before they provide financing to purchase your home.
Q Are there any problems that a title search cannot reveal?
A Yes, we call these "hidden defects" because the most diligent title examination may not reveal them. For example, a previous owner may have falsely declared that he/she was single in their acquisition and subsequent resale of the property; in such a situation, the spouse would have a valid claim to the property. Other hidden defects include forgery, defective deeds, mental incompetence of a party to a deed, and indexing error in the Clerk’s records. Title insurance is required by mortgage companies to protect against such risks, and a separate policy is available to purchasers.
Q A potential buyer wants to assume the mortgage on my home, but doesn’t want to notify the mortgage company. What are the risks involved in doing this?
A Very few mortgage loans are assumable, those that can be assumed only allow "qualified assumptions" meaning that the purchaser must apply and be approved by your mortgage company before he can assume the loan. Should you sell your home to someone who agrees to assume your loan, but doesn’t qualify with your lender, the mortgage company has the option to call your loan and foreclose on the property. In such an event, you and the buyer would be responsible for the amount due. Should your buyer execute a qualifying assumption through the mortgage company, you will be released from liability on the loan and will not be responsible if the buyer defaults later.
Q I have my late father’s will which states that he left his home to me. Why do I have to open a succession proceeding before I can sell the home?
A The will states your father’s intentions, but does not act as a conveyance. As part of the succession proceeding, the Judge will order that the will be filed in the conveyance records and executed according to law. After the will is filed, the Judge will sign a Judgment of Possession recognizing you as the owner and granting you possession of the home pursuant to the terms of your father’s will. This document is the actual conveyance from your father to you and completes the chain of title so that you can sell or mortgage the home.
Q My home is owned by a trust that my grandfather created years ago. My uncle was the trustee, but he died recently. Who can sign to sell my home?
A Review the document creating the trust. Most trust agreements designate an alternative or successor trustee to take over if the original trustee dies or can’t perform his duties. If it doesn’t designate a particular individual, it may outline a procedure for selecting a new trustee. If the trust agreement doesn’t provide for alternative/successor trustees, you can petition the local district court requesting that a successor trustee be appointed; if you are the only beneficiary, or if all the other beneficiaries agree with your choice of successor trustee, the Court will not require a hearing and the new trustee will be appointed right away.
Q I’m purchasing a home and would like to purchase an owners title insurance policy. I understand that the policy is issued for the purchase price, what protects me if my home increases in value?
A Most title insurance companies offer enhanced or premium policies in addition to their traditional owners title insurance policy. These policies usually cost ten per cent more that the traditional policy, but offer that increases by ten percent of the original policy amount during each of the first five years. When scheduling your closing, ask your title company about this enhanced coverage.
Q I received a deed when I purchased my house, does that guarantee clear title?
A Unfortunately, not. A "deed" is a document or instrument wherein a seller transfers his rights in the property, whatever they may be, to you as the purchaser. It does not guarantee that the person appearing as seller is the actual owner of the property and it does not terminate any liens or claims that other parties may have had against the seller or the property.
Q My 15 year old daughter wants to sell five acres that she inherited from her grandfather. Can she sell it before she turns 18?
A Yes, but is will require Court approval. A minor is legally prohibited from entering contracts, so you as her natural parent must open a proceeding called a Tutorship wherein you would be appointed as Tutor to manage the property on her behalf. Once you are appointed Tutor, you can request authority to sell the property. The Court will review the recommendation and evidence presented to determine if the sale is in her best interest. If so, the Judge will sign an order authorizing you to sign the sale on your daughter’s behalf. A certified copy of the order will be attached to the sale before it is filed of record.
Q I am an only child and both of my parents are deceased, why must I file a succession proceeding before I can sell their house?
A An attorney examining title to a property must find a continuous record or "chain of title" showing all the transfers that link the current owner to the original owner of the property. A Judgment of Possession identifying you as the heir and sending you into possession of your parents’ property will be issued by the Court then filed of record to create the "link" between you and your parents in the chain of title.
Q I want to bid on some property at a Sheriff’s Sale, should I obtain a title examination first?
A The deed issued by the Sheriff will direct the Clerk of Court to cancel the mortgage being foreclosed upon and release the property from all liens and mortgages inferior to the one being foreclosed upon. However, this will not affect any superior or prior liens or mortgages. A tax sale purchaser should always research the title and make sure that there are no prior liens/mortgage to clear up before reselling the property.
Q My brother and I inherited some land from our grandfather. I want to sell it, but my brother refuses. How can I get out of co-owning this property with him?
A You can file suit requesting a judicial partition. If there is enough property and it can be divided into parcels of equal value, the court will order a "like kind" in which the property is divided evenly and you and your brother each own one of the smaller parcels; you would then be free to sell your parcel. If the property cannot be divided, for example a private residence on a subdivision lot, the court will order "partition by licitation" and schedule a public auction of the property. After deducting the costs of the sale, the proceeds would be divided between you and your brother.
Q I’ve been told that the Homestead Exemption is $75,000.00. I bought my home for $250,000.00. Does this mean I can’t claim the Homestead Exemption?
A Everyone who owns their personal residence is entitled to claim the Homestead Exemption, regardless of the value of their home. When you qualify for the Homestead Exemption, the first $75,000.00 in value of your home is deducted before calculating your taxes. The Assessor will start with the value of your home, subtract the exempt amount, and assess taxes on the net value of your home (i.e. $250,000.00 - $75,000.00 = $175,000.00). Depending on the ward you live in, this could reduce your property taxes by $750 - $800 per year.
Q The rear ten feet of my yard is a utility servitude. Does this mean I can’t use my own property?
A The servitude gives the utility company the right to enter the property to install and maintain their lines and equipment. You can do anything you want on the property that doesn’t interfere with their rights. For instance, you can enclose it with a fence as long as you have a gate so that utility company employees can access their lines and equipment for servicing. You can also landscape the servitude area or store things within the area, as long as the items can be removed when the lines and equipment are serviced. For instance, you might put your child’s swing set in the rear servitude, but would not want to build any permanent structure there.
Q I inherited a house from my uncle, but my mother has a usufruct over it for the remainder of her life. How does this affect me?
A Usufruct gives your mother the right to use and enjoy the house and the fruits produced by the house. This means that she can live in the house if she chooses, or she can lease it out and collect the monthly rent (i.e. "fruits"). Since usufruct is an element of ownership, it will require her signature and consent to sell the property or to mortgage it as security for a loan.