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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Non-notice of a junior lien... Posted by Ward-CA- on November 25, 2003 at 8:32 AM In Reply to: Rescinded trustee sale posted by lisa (CA) on November 24, 2003 at 6:43 PM : Dear Ward, : We purchased a property at a trustee sale in CA. A federal tax lien was attached to the property as the trustor had deeded the property to a gentleman 6 months prior to the sale and that person had a $70,000 tax lien against him. We were not concerned as we would wait the 120 days to allow the IRS redemption period to run its course. After about 45 days from the sale we contacted the trustee to confirm that the IRS was noticed in a timely manner and they stated they had no duty to do so, I asked them to talk to their attorney about that and get back to me. 2 days later I called them to see what their legal department had told them and they stated that I was right and that they did see the lien on the TSG however they did not notice the IRS, they then stated that they had recinded the sale and that my funds were fedexed back to me yesterday with 10% interest from the date of the sale to todays date. I had a buyer for the property that would have netted me $25,000+ as is however I was going to rehab to maximize the profit. Do you feel that I would have a case against the trustee for negligence? The property has been re-published and will go to sale soon, if the property is bidded up this time or if the sale is cancelled as the old owner is now trying to sell the property to the buyer that made an offer to me, and I do not get it I will then make a decision to pursue legal action, if I have a case. Do you know of any precedents or cases on this point. I was surprised that the trustee could rescind a sale 45 days after the trustees deed was recorded and without the permission of the new owner. Thank you. =================== CA law requires the foreclosing trustee of a senior lien to give notice to any junior lienor who is adversely affected by a senior lien’s foreclosure. If a senior lienor fails to give notice to a junior lienor then the junior’s lien remains against the title of the property, in spite of the senior’s foreclosure. IRS’s Right of Redemption is activated only if their lien is wiped off the title of a foreclosed property—otherwise their lien stays intact. So, you should have been quite concerned that IRS wasn’t notified — since the property you bought had $70K more against it than you had anticipated, prior to the cancellation of the sale. Trustee’s have the power to cancel a trustee’s sale based on the fact that a material mistake was made. Most cancellations are made more timely than 45 days because it becomes increasingly more difficult to get back the bid amount after it has been distributed. Legally, it would probably be shown that the trustee acted responsibly by canceling the sale upon learning of the non-notice issue concerning IRS’ junior lien and that you suffered no tangible loss. Hope this helps. Follow Ups: trustee resposibility broker 2:47 PM, 11/25/03 (0) Post a Followup: Name : E-Mail : Subject : Comments: : : Dear Ward, : : We purchased a property at a trustee sale in CA. A federal tax lien was attached to the property as the trustor had deeded the property to a gentleman 6 months prior to the sale and that person had a $70,000 tax lien against him. We were not concerned as we would wait the 120 days to allow the IRS redemption period to run its course. : After about 45 days from the sale we contacted the trustee to confirm that the IRS was noticed in a timely manner and they stated they had no duty to do so, I asked them to talk to their attorney about that and get back to me. 2 days later I called them to see what their legal department had told them and they stated that I was right and that they did see the lien on the TSG however they did not notice the IRS, they then stated that they had recinded the sale and that my funds were fedexed back to me yesterday with 10% interest from the date of the sale to todays date. I had a buyer for the property that would have netted me $25,000+ as is however I was going to rehab to maximize the profit. Do you feel that I would have a case against the trustee for negligence? : The property has been re-published and will go to sale soon, if the property is bidded up this time or if the sale is cancelled as the old owner is now trying to sell the property to the buyer that made an offer to me, and I do not get it I will then make a decision to pursue legal action, if I have a case. Do you know of any precedents or cases on this point. I was surprised that the trustee could rescind a sale 45 days after the trustees deed was recorded and without the permission of the new owner. Thank you. : =================== : CA law requires the foreclosing trustee of a senior lien to give notice to any junior lienor who is adversely affected by a senior lien’s foreclosure. : If a senior lienor fails to give notice to a junior lienor then the junior’s lien remains against the title of the property, in spite of the senior’s foreclosure. : IRS’s Right of Redemption is activated only if their lien is wiped off the title of a foreclosed property—otherwise their lien stays intact. : So, you should have been quite concerned that IRS wasn’t notified — since the property you bought had $70K more against it than you had anticipated, prior to the cancellation of the sale. : Trustee’s have the power to cancel a trustee’s sale based on the fact that a material mistake was made. Most cancellations are made more timely than 45 days because it becomes increasingly more difficult to get back the bid amount after it has been distributed. : Legally, it would probably be shown that the trustee acted responsibly by canceling the sale upon learning of the non-notice issue concerning IRS’ junior lien and that you suffered no tangible loss. : Hope this helps. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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