Land ISSUES - Lawyers advise

[blkhonda1991]

PurdueSD, the farmer has shown legal documentation that is onfile with the county registrar of deeds that the lease was filed on the 10th of February 1999.

JB740i, no they farm several thousands acres, the field behind our house is probably close to 80 acres in it self.

Hopefully I will get into talk to the lawyer again the end of this week. I just didn't want to have to pull out my wallet to get this resolved.

This is what i dont understand...its such a minute piece of land in the grand scheme of things for him. I think you pointed out why he wanted to lease this small piece earlier in the thread but i have since forgotten the answer. This is really turning into a great big pain in the *** for you

 

[jay50]

The farmer is business savy; he is going to hold out for big bucks from Title company.

Looks like this is going to get ugly and expensive before it ends....if it ever does....

 

[blkhonda1991]

The farmer is business savy; he is going to hold out for big bucks from Title company.

Looks like this is going to get ugly and expensive before it ends....if it ever does....

i dont know how much the farmer can really get from this aside from a what the lease buyout is

 

[ddawg16]

I just had a friend of mine who is in realestate read the thread.....

The lease is legal....

Besides the title company, the previous owner can also be sued for non-disclosure....and if the owner before him did not disclose....he can sue him....domino effect.

My gut feeling is that the previous owner was very much aware of the lease....and I would not be surprised if the neighbor and previous owner 'discussed' the sale of the property to you and had an agreement to not bring it up until it became an issue.....like when he plowed the land.....

So...given the facts as we know them.....the neighbor can hold out for 21 years farming the land unless someone can offer him enough money to give up the lease.

The title company will most likely try to pay you for those 2 acres of land....which as we understand is not an option.....

You can resend the sale, get all your money back and maybe sue for some compensation for all the hassles.

It all goes back to what the farmer is really after...does he want to farm the land or is he just holding out to see how much money he can make?.....I wonder if he played the same game with the other owners? It might be worth while talking to the previous owner and seeing what he knew.

So...if the farmer can not be bought out...then the title company has made it pretty clear...they are basically only going to give you what those 2 acres are worth. If you want more money then you have to go after the previous owners.

Or....you can just sell the property....

But....at the end of the day, it's the lawyers who win.....

Make sure you stipulate any any agreement to include all legal fees.....

 

[Junkman]

For those that forgot, or didn't read the entire thread, he purchased the land through an agent that was representing the land owner, which acquired the land as a result of a foreclosure of the previous mortgage. This lets the previous titled land owner off the hook, since the bank or mortgage company too the property when they defaulted. The bank or mortgage company in all probability wasn't even aware of the lease. Usually when a bank or mortgage company sells a foreclosed property, you buy it as is, as seen, and it is up to the buyer to do diligence and learn all there is to know about the property prior to making an offer. In this case, too much was relied upon by the buyers, since they were not legally represented at the closing by their own attorney. I have seen this many times before, the buyers don't want to spend any more than they have to when it comes to closing expenses. Real estate people routinely tell buyers that they don't need an attorney, since a buyers attorney will be asking the hard questions that they don't want to answer. Most people are under the impression that the real estate people represent the buyer, when it actuality, they are really working for the seller. This is born out by the fact that the seller is paying the real estate commissions. In the end, the title insurance company is going to reimburse him for the 2 acres, less 21 years of rent that he will collect, and call it a day. No sense in getting all worked up about this any more, since there is no way that it can be reasonably settled. If he pushes too hard, then they will just buy out the property from him for the present day market value, and also charge him for "rent" for the time that he lived there. Title insurance companies don't give away money unless it is absolutely, positively, beyond a doubt, the least expensive way for them to put this to bed. What it will cost to resolve this now, will far exceed what it would have cost to have an attorney represent him at closing.

 

[Tscott]

Actually I don't think he is collecting any rent. If I recall, the lease was paid in full by the farmer to the previous owner. Am I wrong?

Maybe you could cut him a little slack Junk. We all make mistakes. Yes an attorney would have been a good idea when dealing with a foreclosure property, but the title company does have some responsibility to make it a right as they can. Does this mean he gets his land back ? Maybe not, but the least we can do is be supportive. After all, thats pretty much what this place is, a handy man support group.

For what its wort NWOhioChevyGuy I hope it all works out in the end.


Tom

 

[Junkman]

Actually I don't think he is collecting any rent. If I recall, the lease was paid in full by the farmer to the previous owner. Am I wrong?

Maybe you could cut him a little slack Junk. We all make mistakes. Yes an attorney would have been a good idea when dealing with a foreclosure property, but the title company does have some responsibility to make it a right as they can. Does this mean he gets his land back ? Maybe not, but the least we can do is be supportive. After all, thats pretty much what this place is, a handy man support group.

For what its wort NWOhioChevyGuy I hope it all works out in the end.


Tom

I am sympathetic to his plight, and I could give him encouragement, but that wouldn't be the honest thing to do. My last post is in general response to people that are making silly suggestions, such as putting a fence around the property. I have been involved in a land dispute in the past, and I know first hand the solutions that the title company will use. I also realize that to give someone false hope, knowing that what you are telling them will not come about under any circumstances, to me is just plain wrong. It is like the doctor that tells you and your family that you are getting better, when he knows full well that you are about to die very shortly. As hard as the truth is to swallow, it is the honest thing to do. Sure, you should have encouragement, when encouragement is necessary to continue the fight, but when there is nothing left to fight for, then recognize the handwriting on the wall. I am supportive, but I call the cards the way that they are presented, without giving false hope. He has already said in the past that he chooses not to spend any money at this time, and wants the title company to resolve this. Assuming that each acre is worth $50,000 that is a total of $100,000. That is the most that the title company will pay, and then they will want a deed for those 2 acres, since he has been reimbursed for them. He needs to read the contract (insurance policy) to fully know what the remedy is going to be. Just like any insurance policy, it spells out what they will do, and what you must do. I believe that he might have already shot himself in the foot by even mentioning the title insurance company to the farmer. One of the letters from the Title Insurance Company warned him NOT to mention that there was insurance.

 

[Brad54]

When he bought the land, it was represented as being free and clear of liens, as per the title company and the lender. It turned out to not, in fact, be clear of liens, because the farmer had a lease on the land filed with the county. The lease was made with a previous owner, for the length of 30 years, and paid in full to the previous owner.

The title company screwed up, that's why they have insurance.

If you buy a 6 acre tract under the guarantee that it is free and clear, and it is not, the organization that guaranteed it should be held liable. They signed a contract to that effect.

They have admitted they screwed up.

Where it is going to get ugly is compensating the property owner: They have entertained offering the farmer a buy-out. The farmer isn't obligated to take it. If he farms thousands of acres, and will be be reasonable compensated for lost crops on these TWO acres, his legal fees, etc., and still refuses a buy-out, then he's a *****. But that's his right.

Next in the company's best interest is to offer the land owner a buy-out. They will take the cheapest approach to this, and that's fair market value for these two bald acres, as they are today. That will be their offer, and depending on what is spelled out in the original contract, the owner will have to move forward from there. That's where the owner having his own lawyer RIGHT NOW will be good for him. Because from his perspective, what's best for the title company is NOT best for him, as we've all said.

The lawyer, though we all hate them, is paid to fight for his client. Just as a mechanic is payed to put your car back together, and a doctor is paid to treat your illness.

If it were me, I'd fight to get out of the property and start over. that will require court, and the decision of a judge (or jury) to determine who is responsible for paying, and who is entitled to how much compensation.

-Brad

As a side note, if the farmer refuses a buy-out, check the wording of the contract, and see if it forbids ANYTHING from being on the two acres in question. If not, I'd put property boundary markers at the corners, just to clarify where his land ends and yours begins. You can't put up a fence or building, but markers should be allowed. Something that he has to break cadence and drive around. And either a deep ditch, or a tree line exactly on the line. A fence would also be a pain for him to deal with. Don't put it in the land he farms, but exactly on the border of what he farms and what you're allowed to build on. There shouldn't be any set-back requirements on your own property, even if it is leased to someone else. Or a 1 acer pond. And then sue him for chemical run-off.

 

[rancherbill]

.......That is the most that the title company will pay, and then they will want a deed for those 2 acres, since he has been reimbursed for them.

They want the deed????

What you are describing is a forced subdivision. I A) don't thin the local government would go for it, B) the bank would not go for them diminishing the value of the property that they have loaned against, which they required title insurance to protect the value.

He needs to read the contract (insurance policy) to fully know what the remedy is going to be. Just like any insurance policy, it spells out what they will do, and what you must do.

Well my guess is he has taken the time to read the policy. I have never seen a "Remedy" section in a policy. Remedies are based on the applicable statute, and Common Law. A policy cannot be limited unless it is clearly specified as a limit, or you sign a specific waiver section on the policy.

 

[NWOhioChevyGuy]

For those of you who are debating the policy sections 7 & 8 reads like this:

7. Options to pay or otherwise settle claims; termination of liablity
In case of a claim under this policy, the Company shall have the following additional options:
(a) To Pay or Tender Payment of the Amount of Insurance.
To pay or tender payment of the Amount of Insurance under this policy together with any cost, attorneys fees, and expenses incurred by the Indsured Claimant that wer authorized by the Company up to the time of payment or tender of payment and that the Company is obligated to pay. Upon the exercise byt the Company of this option, all liability and obligations of the Company to the Insured under this policy, other than to make the payment required in this subsection, shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation.
(b) To Pay or Otherwise Settle With Parties Other Than the Insured or With the Insured Claimant.
(i) To pay or other wise settle with other parties for or in the name of an Insured Claimant any claim insured against under this policy. In addition, the Company will pay any costs, attornys' fees, and expensses incured byt he Insured Claimant that were authorized by the Company up to the time of payment and that the Company is obligated to pay; or
(ii) To pay or otherwise settle with the Insured Claimant the loss or damage provided for under this policy, together with any costs, attorneys' fees, and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of payment and that the Company is obligated to pay.
Upon the exersize by the Company of either of the options provided for in the subsections (b)(i) or (ii) the Company's obligations to the Insured under this policy for the claimed loss or damage, other htan the payments required to be made, shall terminate, including any liability or obligation to defend procecute, or continue any litigation.

8. Determination oand extend of liability
This policy is a contract of indemnity against the actual monetary loss or damabe sustained or incurred byt he Insured Claimant who has suffered loss or damage by reason of matters insured against by this policy.
(a) The extent of liability of the Company for loss or damage under this policy shall not exceed the lesser of
(i) the Amount of the Insurance; or
(ii) the difference between the value of the Title as insured and the value of hte Title subject to the risk insured against this policy.
(b) If the Company pursues its rights under Section 5 of these Conditions and is unsuccessful in establishing the Title, as insured.
(i) the Amount of Insurance shall be increased by 10%, and
(ii) the Insured Claimant shall have the right to have the loss or damage determined either as of the date the claim was made by the Insured Claimant or as of the date it is settled and paid.
(c) In addition to the extent of the liability under (a) and (b), the Company will also pay those costs, attorneys' fees, and expenses incured in accordance with Section 5 and 7 of these Conditions.


In no place does it give conditions of what the settlement will be or how it will be determined.

The document is 10-12 pages of fine print so I am not going to type all of the verbiage in to clarify everything.


I will keep you informed of what transpires in this unfolding situation.

Keith

 

[Jaguar Fan]

For those of you who are debating the policy sections 7 & 8 reads like this:

7. Options to pay or otherwise settle claims; termination of liablity
In case of a claim under this policy, the Company shall have the following additional options:
(a) To Pay or Tender Payment of the Amount of Insurance.
To pay or tender payment of the Amount of Insurance under this policy together with any cost, attorneys fees, and expenses incurred by the Indsured Claimant that wer authorized by the Company up to the time of payment or tender of payment and that the Company is obligated to pay. Upon the exercise byt the Company of this option, all liability and obligations of the Company to the Insured under this policy, other than to make the payment required in this subsection, shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation.
(b) To Pay or Otherwise Settle With Parties Other Than the Insured or With the Insured Claimant.
(i) To pay or other wise settle with other parties for or in the name of an Insured Claimant any claim insured against under this policy. In addition, the Company will pay any costs, attornys' fees, and expensses incured byt he Insured Claimant that were authorized by the Company up to the time of payment and that the Company is obligated to pay; or
(ii) To pay or otherwise settle with the Insured Claimant the loss or damage provided for under this policy, together with any costs, attorneys' fees, and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of payment and that the Company is obligated to pay.
Upon the exersize by the Company of either of the options provided for in the subsections (b)(i) or (ii) the Company's obligations to the Insured under this policy for the claimed loss or damage, other htan the payments required to be made, shall terminate, including any liability or obligation to defend procecute, or continue any litigation.

8. Determination oand extend of liability
This policy is a contract of indemnity against the actual monetary loss or damabe sustained or incurred byt he Insured Claimant who has suffered loss or damage by reason of matters insured against by this policy.
(a) The extent of liability of the Company for loss or damage under this policy shall not exceed the lesser of
(i) the Amount of the Insurance; or
(ii) the difference between the value of the Title as insured and the value of hte Title subject to the risk insured against this policy.
(b) If the Company pursues its rights under Section 5 of these Conditions and is unsuccessful in establishing the Title, as insured.
(i) the Amount of Insurance shall be increased by 10%, and
(ii) the Insured Claimant shall have the right to have the loss or damage determined either as of the date the claim was made by the Insured Claimant or as of the date it is settled and paid.
(c) In addition to the extent of the liability under (a) and (b), the Company will also pay those costs, attorneys' fees, and expenses incured in accordance with Section 5 and 7 of these Conditions.


In no place does it give conditions of what the settlement will be or how it will be determined.

The document is 10-12 pages of fine print so I am not going to type all of the verbiage in to clarify everything.


I will keep you informed of what transpires in this unfolding situation.

Keith

You're probably screwed. Sorry, big guy. Their attorney says they are pursuing 8(a)(ii), if I recall correctly.

You could try telling the insurance company something like "I don't see any need for a survey. This is digital, not analog: the value of the property exists solely in my ability to carry out my plans and project. I can carry out my plans and project if I have all 6 acres. I cannot carry them out if I have less than 6 acres. So... the loss is total as it stands, unless the farmer changes his mind. A survey is 100% irrelevant."

It won't work; the insurance company will come back & say "no, the loss isn't total; it is proportional."

But at least at that point you will told them clearly that a proportional loss isn't something you will accept.

By the way: I'll bet internally at the Insurance company they are already having meetings about what outside law firm they will use to defend themselves once you (inevitably) sue them. Their accounting people are already putting a reserve on earnings in case they do not win. Budgets to fight you are already being allocated.

Your best bet is to get the neighbor to agree that some number will buy him out. Maybe its $25K. Maybe its $250K. But you need to get a number from him (e.g., the start of negotiation).

 

[dfrace]

He who represents himself has a fool for a client.

You really need to have an attorney working all angles of this for you. And you have to stay on top of them as well. I do not think you fully understand how badly this can go, the title insurance company has no interest in doing what is right, only what is cost effective for them.

Also, I have followed this thread from the beginning, that farmer is not your friend. He never told you about the lease until after he planted, even though the land in question had been discussed with him numerous times over the winter. And he is not willing to *sell back* a lease on 2 acres, COME ON. That 2 acres is 1/3 of your property, and it means nothing to him. As someone else here said, he sounds like a *****.

 

[QUIKSVT]

He who represents himself has a fool for a client.

You really need to have an attorney working all angles of this for you. And you have to stay on top of them as well. I do not think you fully understand how badly this can go, the title insurance company has no interest in doing what is right, only what is cost effective for them.

Also, I have followed this thread from the beginning, that farmer is not your friend. He never told you about the lease until after he planted, even though the land in question had been discussed with him numerous times over the winter. And he is not willing to *sell back* a lease on 2 acres, COME ON. That 2 acres is 1/3 of your property, and it means nothing to him. As someone else here said, he sounds like a *****.

+1
Sorry this ***** for you. I've been through a similar thing with a bad real estate fumble.

 

[warrent]

Well since this is happening in Michigan, about 20 years ago they passed a law that the selling property owner must disclose any known problems, liens, etc at the time of sell of property. They make the seller sign a discloser letter. Have you sent a letter to the Attorney General Mike Cox and notify them of the Title companies mistake. Both the title company and the seller have broken the law.

 

[kvom]

I googled a bit and found that on average soybeans yield about $200/acre profit. So two reasonable parties could settle for a payment of $400/yr, or some annuity value to buy out the lease. Or everyone can play hardball and pay off the lawyers.

 

[ddawg16]

$200/acre? I still think something else is going on. He can't be wanting the land to just plant the soy.....there is something else....maybe more personal.

Have you considered doing a search of news around the time that the lease was started? Find out what you can about the guy....maybe talk to other 'neighbors'.

 

[warrent]

Keith,
Go to this link http://www.michigan.gov/documents/dleg/redbook_217577_7.pdf

Then to page 86. At the end of the section is the disclosure form. Did you get one of these?

There should of been one signed by all three of the previous owners back to when the lease was signed. Try to get a copy. Then sue the heck out of the one that first did not put about the lease.

 

[Junkman]

Well since this is happening in Michigan, about 20 years ago they passed a law that the selling property owner must disclose any known problems, liens, etc at the time of sell of property. They make the seller sign a discloser letter. Have you sent a letter to the Attorney General Mike Cox and notify them of the Title companies mistake. Both the title company and the seller have broken the law.

Without seeing the whole text of the law, it is hard to comment. As for the seller, it was a foreclosure sale, which usually are "as is, as shown, with no representations". The title company isn't the seller, they just are a service provider, and as such, the most that they can be held liable for is the damages for their lack of due diligence. They haven't violated any laws that I could think of that might be in place. Can it be illegal to make a mistake? I don't think so. NWOhioChevyGuy has told us that the land was in foreclosure, but he never disclosed who the seller was. Was the seller the mortgage company or a bank? You can only be held responsible for disclosing what you know. If it was a mortgage company, then they would have had to have been knowledgeable of the lease, which we have no idea of. One thought has come to mind that might put the lease itself in question. If the land was mortgaged when the lease was given, the mortgage company would have had to have granted permission to give a lease in the first place. I know of no mortgage company that would allow this, for the very reason that there is a problem now. I believe that it would be best to question the signatures of the lease, and the lease itself to establish the real circumstances. It might be that the person that gave the lease had no legal right to lease the property, and that a court might invalidate the lease. If the farmer has to start to defend the lease, he might be more inclined to just abandon the lease. I believe that there is more about this matter that we don't know, than what we think we know. Until there is full disclosure we are all speculating. This is why he needs to hire an attorney now!

 

[jr2]

Keith,
Go to this link http://www.michigan.gov/documents/dleg/redbook_217577_7.pdf

Then to page 86. At the end of the section is the disclosure form. Did you get one of these?

There should of been one signed by all three of the previous owners back to when the lease was signed. Try to get a copy. Then sue the heck out of the one that first did not put about the lease.

Junkman is correct. Warrent, you should have read through it before you posted it.

Quote: 565.953 Seller disclosure requirements; exceptions.
Sec. 3.
(c) Transfers by a sale under a power of sale or any foreclosure sale under a decree of foreclosure after default in an obligation secured by a mortgage or deed of trust or secured by any other instrument containing a power of sale,

 

[W-Cummins]

If the land was mortgaged when the lease was given, the mortgage company would have had to have granted permission to give a lease in the first place. I know of no mortgage company that would allow this, for the very reason that there is a problem now.

I don't know for sure about the laws in CT but this is NOT true any place I have ever lived. The mortgage CO has NO say about you leasing the property.

As for a fence It sounds like a great idea to me as long as it's not explicitly prohibited in the lease ( and I would bet it's not). I would put a fence around my whole property ( you can not deny the farmer access to the leased land, but he can go through the 20' gate you will put there for him to enter. And if this makes him unhappy because he can't turn is combine around as well, well that's too bad....


William....

 

[warrent]

jr2,
You are correct about the section on foreclosure. The point I was trying to make was if he had one of these or not. As junkman stated if from a mortgage company then probably not but the mortgage company can provide the previous ones. The title company should also have the previous disclosures. If Keith decided that he did not need one of these because the house was sold as is, then he has made a big mistake. But I would still check with the attorney generals office and get their view point. It is a service that is free for you to use.
I think that it is a lesson that we should all learn is make sure that you do not buy a house "as is".

 

[jr2]

jr2,
You are correct about the section on foreclosure. The point I was trying to make was if he had one of these or not. As junkman stated if from a mortgage company then probably not but the mortgage company can provide the previous ones. The title company should also have the previous disclosures. If Keith decided that he did not need one of these because the house was sold as is, then he has made a big mistake. But I would still check with the attorney generals office and get their view point. It is a service that is free for you to use.
I think that it is a lesson that we should all learn is make sure that you do not buy a house "as is".

Hey.. hope that didn't come across as gruff.... I was typing quick.. No harm meant.

 

[NWOhioChevyGuy]

OK, to answer a couple questions that have come up in the last several posts.

We bought the property from the Mortgage company holding the lein on the property, Federal National Mortgage Association, as it reads on the Settlement Statement. (FannieMae)

The Title Company completely missed this lease, and Yes I have shown it to my lawyer and the lease is legal and transfers through the sale of the property even when foreclosed on.

I meet with my lawyer again next week. (earliest I could get into his office when I'm in town)

The lease was on file at the county so reguardless if it was known or disclosed to the selling agent the Title Company should have found it!

Yes we did purchase the land and house "As Is" in the settlement but that does not exclude a lein that is not disclosed and has direct bearing on what is being purchased.

-- Jr2 -- It is my understanding that the "Waiver and release regarding property condition at closing" document was used in place of the document you mentioned.

 

[Brad54]

You know, I had another idea today--if the farmer doesn't want to accept your offer to buy him out, and particularly if it's a fair offer to compensate him for future lost income from the land, then screw him; break the lease.

After he harvests this winter, hire a crew to come in and run a chain link fence across the back of YOUR two acres. Then plant a bunch of cheap trees on the land and seed the rest. Make it so he can't simply come in with his implements and till it back up. Plan on putting a building back there? Have some building materials delivered and set on the ground.

He'll raise a stink, say he's got a lease, at which point you politely tell him you've decided to break the lease. What's he going to do? If he'd like to sue you for the rights to the two measly acres, he's more than welcome to see you in court.

At which point, you can have your lawyer point out that he'll tie the thing up for months in court, maybe years...all the while your trees are growing and getting harder to get rid of. (I suggest pines...they grow FAST. And a couple rows of corn too...but don't harvest that. He won't like corn in his beans, and it's hard to get rid of.) He'd be racking up legal bills that will be a loss against the crops on those two acres, fighting you. Then offer to settle with him for the amount the land company offered. A judge might suggest arbitration, or tell you to simply compensate the farmer for breaking his lease.

Leases and contracts are broken every day in this country, and the courts deal with it.

Does the legalese on the lease spell out any penalties for breaking the contract? If it does, that's your "out." Tell him you're breaking the lease and abiding by the contract he signed.

And you might want to time it so that you do all the work on your land right before planting season, so he doesn't have the winter to get his lawyer rolling. Then you've got him ******* through one whole growing season, at least.

Dirty? Maybe. But I don't have a lot of sympathy for the guy, if he sees you got screwed by a former owner and the title company, and isn't willing to take fair compensation to buy him out of two acres when he farms thousands.

The key here is how much money those two acres are going to bring in, versus how much it will cost him fighting you.

Break the lease. Go on the offensive.

-Brad

 

[jay50]

You know, I had another idea today--if the farmer doesn't want to accept your offer to buy him out, and particularly if it's a fair offer to compensate him for future lost income from the land, then screw him; break the lease.

After he harvests this winter, hire a crew to come in and run a chain link fence across the back of YOUR two acres. Then plant a bunch of cheap trees on the land and seed the rest. Make it so he can't simply come in with his implements and till it back up. Plan on putting a building back there? Have some building materials delivered and set on the ground.

He'll raise a stink, say he's got a lease, at which point you politely tell him you've decided to break the lease. What's he going to do? If he'd like to sue you for the rights to the two measly acres, he's more than welcome to see you in court.

At which point, you can have your lawyer point out that he'll tie the thing up for months in court, maybe years...all the while your trees are growing and getting harder to get rid of. (I suggest pines...they grow FAST. And a couple rows of corn too...but don't harvest that. He won't like corn in his beans, and it's hard to get rid of.) He'd be racking up legal bills that will be a loss against the crops on those two acres, fighting you. Then offer to settle with him for the amount the land company offered. A judge might suggest arbitration, or tell you to simply compensate the farmer for breaking his lease.

Leases and contracts are broken every day in this country, and the courts deal with it.

Does the legalese on the lease spell out any penalties for breaking the contract? If it does, that's your "out." Tell him you're breaking the lease and abiding by the contract he signed.

And you might want to time it so that you do all the work on your land right before planting season, so he doesn't have the winter to get his lawyer rolling. Then you've got him ******* through one whole growing season, at least.

Dirty? Maybe. But I don't have a lot of sympathy for the guy, if he sees you got screwed by a former owner and the title company, and isn't willing to take fair compensation to buy him out of two acres when he farms thousands.

The key here is how much money those two acres are going to bring in, versus how much it will cost him fighting you.

Break the lease. Go on the offensive.

-Brad

You're way off base on this suggested course of action; it will only bring on more stress to the owner.
I believe the owner should keep on good terms with the farmer; it might work out in the future.
And besides....the farmers I know have plenty of guns for varmit control...and maybe for an a$$hole who gets in their way during planting season.....

 

[wantedabiggergarage]

Actually, if there is a breaking the lease clause, then maybe that should be sent over to the title companies lawyer.

 

[Brad54]

You're way off base on this suggested course of action; it will only bring on more stress to the owner.
I believe the owner should keep on good terms with the farmer; it might work out in the future.

Re-read my first paragraph: IF the farmer doesn't want to accept a fair offer to buy him out. Come on--the guy farms thousands of acres, and is being un-neighborly to this home owner for two--2--acres. Yeah, try to stay on the farmer's good side, and be a good neighbor, but when someone is farming a couple thousand acres, and doesn't want to give up two of them when he will be compensated for them? The home owner here is not being un-neighborly. The farmer is. Yes, he's got a lease, and he KNOWS the homeowner got screwed, and he's going to stick to the lease rather than be compensated for it?
Think about that...The farmer will be compensated for what he's going to grow on that land for the next 25+ years, without having to do anything, and he's still not willing to do it, when he could take the money, give the land back to the owner and go on his way, being a good neighbor.

-Brad

 

[ddawg16]

This all goes back to what I was saying before.....

What is the farmers 'real' agenda.....

He has that much land and is being **** about 2 acres? Something else is going on....find that out and your next step will be more obvious.

 

[Mr. Welsh]

15 pages and nothing has happened?

Where is the title company here? They should have responded by now...

 

[NWOhioChevyGuy]

Good question Mr. Welsh

 

[jay50]

15 pages and nothing has happened?

Where is the title company here? They should have responded by now...

Title company is busy covering their bases; they would not be so stupid to reveal their hand....even though they displayed oversight in missing something so obvious in court records as a lien on the property...

 

[Jaguar Fan]

This all goes back to what I was saying before.....

What is the farmers 'real' agenda.....

He has that much land and is being **** about 2 acres? Something else is going on....find that out and your next step will be more obvious.

+1 to comments by ddawg.

And by the way, there is nothing illegal or immoral about breaking the contract (lease): it is just a matter of how much money you end up owing the farmer after the judge rules against you. There might be a "liquidated damages" clause to the lease that specifies this. It is highly unlikely a judge would compel you to continue to lease your land to the farmer; he'll just make you pay for breaking the lease. It is not likely to be more than the $200/acre/year you forecast.

 

[ovilla]

Keith, I really feel for you. This totally *****. I know that someday I plan on moving out to the country to just get 3-5 acres and I would like to do whatever I want on my 3-5 acres.

Anyway, here's some thoughts I had.

Buy the farmer 2 acres.
- You would basically accept and use the title company's money to buy two acres for the farmer (and hopefully have some money left over for your troubles). He of course would have to agree that by accepting this "gift", he would then let you out of the lease. Heck, I bet with the money you get from the title company, you may be able to buy a lot more than 2 acres. I'd buy as much land as possible right next to any of his properties (say 5-7 acres or whatever you can get) and then either give it to him to break your lease or change the "site" of the lease. You'd basically give him the remainder of his lease at the new site. This way you could move forward for your plans on your original 6 acres.


Break the lease.
- I still think that you should ask your lawyer what's the worst to be expected with this solution (YES, it's a viable solution). Hell, people break leases on rentals all the time. One could consider a rental or even a store front rental to be a short term land lease, right? Also, let's say you wanted to start a business on your land and therefore now needed those two acres to build a building? Wouldn't that be grounds to break the lease? To me it's no different than a landlord telling someone that they need to move out next month because they are now selling the building. Yes, the landlord would have to give you back your deposit.

Break the lease and refund the lease amount.
- This may be a bit rough but why couldn't your attorney draft a letter to the farmer informing him that the lease is being terminated after the completion of this years harvest. You could say that there are now plans for the 2 acre site or simply state that continued payments for having to maintain insurance for fire, liability, and flood protection for these two acres is causing undue hardship so the use of this land can no longer be continued. Think about this. If one of his farm hands gets hurt on your 2 acre parcel (say a combine flips over on a low spot on your property), who do you think they will come after? Anyway, as part of the letter, there would also be a check for a full refund of the lease amount. The farmer could take legal action against you for breaking the lease but could not argue that you weren't compensating him since you would be refunding the full amount of the lease.


Just curious on something. What would happen if YOU, for whatever reason, could no longer make payments on this property and had to go into foreclosure? Wouldn't the bank then take ownership and promptly put up for sale the full 6 acres?

 

[JB740i]

It's a 30 year lease. I would think that if had the money laying around to buy it out he could have bought 10 acres someplace instead of 6. I don't think it's as simple as sending him a little check in the mail.

And if a combine flips over on a farm hand, the farm hand is gonna go after the guy who owns the combine that's worth hundreds of thousands of dollars (I'm pretty sure they run that high, right?).

 

[ovilla]

I think it's no different than a kid getting hurt on your property (whether it was on a bike in your driveway or while walking through your lawn). I think a farm hand would for sure go after the employer (the farmer) but then also whoever owns the land (be it an unsafe public road or private property).

Anyway, my thought on having the attorney send the letter and the check was simply to take action and move forward and then wait for a reaction from the farmer. Yes, the farmer could then take his own legal action against him, which is what I would expect but then it would be on the farmers dime. In the mean time, Keith could continue on with some plans for the property.

 

[NWOhioChevyGuy]

Ovilla per your comment in two posts above.

It don't work like that when the bank forcloses, I know as I bought this land out of forclosure!

I will have the talk with my Lawyer about breaking the lease, best potential solution yet if it can be done.

 

[W-Cummins]

Ovilla per your comment in two posts above.

It don't work like that when the bank forcloses, I know as I bought this land out of forclosure!

Well your state is the first I have heard of that, this is the case. Normally the Bank has a first interest on the property and is in the main position to get any thing out of the property if it is foreclosed. The lease is secondary to the first interest ( the bank ) so, just like a secondary mortgage, if there is nothing left over the lessee gets nothing.... Other wise the bank would not be made "Whole" in it's interest during the foreclosure, if the lease was allowed to stand. I.E they would not get as much $$ back in a sale if all the land was leased for 30 years...

Why don't you post the lease text here as it's a public document and you will not be disclosing any private information.

William....

 

[NWOhioChevyGuy]

I am on the road this week, I will post the lease text when I return home.

It is a very simple single page document.

 

[Brad54]

If it ends up that breaking the lease is the best solution, I like Jim Beam, or Ice House long necks.


-Brad

 

[NWOhioChevyGuy]

LEASE TEXT:

WITNESSETH This lease dated this 5 day of February, 1999, whereby Tim XXXXX and Dawn XXXXXX, husband and wife, 7630 Seneca Highway, Morenci, MI 49256, in consideratoin of $4,600.00, receipt of which is acknowledged by signature hearto, lease to David Stutzman and Nancy Stutzman, husband and wife, and their heirs and assigns, 8055 Seneca Highway, Morenci, MI 49256, for a period of thirty (30) years, land in the Township of Seneca, County of Lenawee, and State of Michigan, described as follows:

A part of the Norhteast 1/4 of the Southeast 1/4 of Section 4, Town 8 South, Range 2 East, further described by Walter E. Frazier and Associates, Inc. survey as: Commencing on the East line of the Southeast 1/4 of said Section 4 at a point located 561.00 feet South from the East 1/4 corner of said Section 4, thence West and perpendicular with the section line 280 feet to place of beginning, thence West 80 feet, thence South and perpendicular with East line of the Southest 1/4 of section 4 807.00 feet; thence East at right angles to said line 180 feet; thence North parallel with the East line of the Southeast 1/4 of said Section 4 235 feet, thence West 100 feet, thence North 572 feet to place of beginning.

Then all the signitures.