One home purchased last year while attending a Flipping Formula Buying Summit has proved to be a recurring nightmare. I can not completely blame Flipping Formula, after all I have certain due diligence requirements that I should have followed. My only excuse is that I was new at this process. See my previous blogs:
Aug 2, 2013--The Trip to The Flipping Formula Investor Buying Summit
Aug 26, 2013--Flipping Formula – Properties
Sept 9, 2013--Homes Purchased at Flipping Formula Seminar
Oct 22, 2013--The Saga of Two Properties
Because new nightmare occurred recently I felt compelled to bring you up to date. About 3 weeks ago I received a letter and bill from the Ruskin Heights Homes Association Inc. showing I had not paid my yearly HOA fee of $40.00 plus a Finance Charge of 80 cents. Apparently the bill had been sent 11/13/2013. My mailing address was listed but was missing the Unit C so I never received the original bill. I only got this one because the current carrier recognized our name.
The address of the property listed as part of the HOA showed 113th Terrace instead of 113th Street (Street is what appeared on my Warranty Deed). I contacted the Ruskin Heights office and told them that I did not own a property on 113th Terrace. After several discussions and emails back and forth with Sandy, Office Manager at Ruskin HOA, we determined that their documentation all showed that my property was on 113th Terrace not Street. Sandy was good enough to pull up and send me copies of the Rental Registration, property taxes due and Warranty Deed.
To my chagrin, Sandy pointed out that according to County records my property was to go into foreclosure as of May 1, 2014 for non-payment of property taxes back to 2011. I had assumed (there is that old “ass” word again) and been assured at the time of purchase in June 2013 that all taxes had been paid and there were no outstanding liens on the property.
Not only were the taxes not paid, but the Warranty Deed also listed a different parcel number in addition to the different street address. I had never been notified of any such error before. The revised Warranty Deed had been filed as of October 17, 2013 with the County, but never supplied to me.
I contacted the Jackson County Tax Collector office to confirm the information and see if I could let them know what had happened. After all I was sure this could be worked out, but I didn’t want the property to go to foreclosure. I was sure there was still an error somewhere as I had contacted Jackson County in December 2013, used the parcel number that had been provided to me on the original Warranty Deed, and thought I had paid the taxes on the property for which I had the Warranty Deed. (I had assumed that the taxes had been proration at time of sale and I was responsible for the December payment. So I was not surprised that taxes where owing.) I used the parcel number and address, but apparently I was not listed as the owner which I did not realize at the time.
I was informed by Jackson County that I was listed as owner of 113th Terrance and not 113th Street and furthermore that the property was going into foreclosure on May 1, 2014 because the property taxes had not been paid since 2011. And no, there was no way to stop the foreclosure except to pay the taxes of nearly $2600 by April 30. The clerk stated that I could not wire them the money which I found odd, nor could she email a copy of the tax bill to me. She could fax it, however. Since I was in the process of moving equipment and relocating my work area, I did not have working fax at the time so I had her fax the notice to Marquis (the seller).
In the meantime, I had sent an urgent email message to the seller, and left a telephone message for the contact person, and was notified within a day that they would look into the matter. They were sure the taxes had been paid.
These are the concerns that I have over the whole matter:
1) Given Warranty Deed with wrong parcel number and wrong address on it.
2) I believed I had paid the taxes on the wrong house because I was using the Warranty Deed that was given to me.
3) I didn’t know I was in an HOA association.
4) I had purchased property insurance and insured the wrong house since July 1, 2013.
5) I had not been getting all the rent due me on the property (and that is another story), so I wasn’t even sure if the new property management firm was going to the right house and trying to management the right house.
6) I wasn’t sure if the maintenance person (who was supposed to be replacing/repairing the heating system) was going to the right house.
Well the good news is that the seller did come through and pay the taxes current. My insurance company immediately corrected the policy to reflect the correct parcel number and address. And I was able to get the HOA current with their bill as well.
I still have to find out if the management company got the person evicted for non-payment as he was supposed to be vacating property, and whether the property has been re-rented. I will check on that tomorrow.
No doubt you are saying "duh", but for advice, before the property closes, contact the county and be sure that the parcel number and address on your contract matches what the county shows.
With all that has gone on with this property and the other one that I purchased at the buying summit, I may just dump this property and go to Secured Investment Corp and provide property loans. They won’t be big loans, but I think they will be less hassle then I have had over the past year.
This whole process has made me very gun shy and I think that is why it has been so hard for me to move forward on my real estate purchases. Why did I have to make all my mistakes on my first two houses?