Abandoned House Ebook
DISCLAIMER
This e-book has been written to provide information about acquiring vacant and abandoned property by foreclosing. Every effort has been made to make this ebook as complete and accurate as possible. However, there may be mistakes in typography or content. Therefore, this ebook should be used as a guide - not as the ultimate source of Internet Marketing information. The purpose of this ebook is to educate. The author and the publisher does not warrant that the information contained in this e-book is fully complete and shall not be responsible for any errors or omissions. The author and publisher shall have neither liability nor responsibility to any person or entity with respect to any loss or damage caused or alleged to be caused …show more content…
directly or indirectly by this ebook.
1
Proverbs 3:5,6 - "Trust in the Lord with all your heart and lean not on your own understanding; in all your ways acknowledge Him, and He will make your paths straight." First, you find an Abandoned House.
Then, clean the lawn and fix up the broken windows. Next, you send a bill to the last known owner of record. Now, you file a Claim of Lien in the County Recorders office to secure the property. Finally, you foreclose on your lien, and subsequently receive the default judgment on your claim, because no one is there to Challenge your Claim. The clerk of the Court issues the writ of possession and execution. You pay the Sheriff $100 and he executes the writ. Congratulations you just acquired a house!
After reading this book, you will know how to acquire vacant and/or abandoned homes, (including “Bank Owned” houses) using a relatively quick and efficient …show more content…
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method. That method, being the act of foreclosing on a lien in small claims court, and taking possession of the Warranty Deed (or real property) as collateral. This method is being presented, as opposed to the traditional way of foreclosing on a Mortgage Deeds, which is a process reserved for the Banks, and typically takes place in higher Courts. There are several caveats to foreclosing on a Mortgage which make it complex and not feasible for the average person. The process involves filing public notices, an extensive knowledge of the traditional foreclosure process, and you will be guaranteed to wait minimum of two to three months before a remote chance at remedy. You will also have to ward your claim against attorneys from the Bank named on the Mortgage deed who will use every tactic of which is legal and sometimes illegal to block and tie up your process. The Attorneys goal is to keep the case open as long as possible because his pockets are being funded. Unfortunately, your’s are not. Another unfortunate truth, is that corruption has deeply penetrated the Judicial System as it deals with Foreclosures and alleged Bank Owned Properties. The risks and financial feasibility of going this route (Traditional Foreclosure), does not provide for a practical solution. Contrary to foreclosing on a Mortgage, someone could foreclose on a their own established lien to gain possession to real-property, if one only knew such possibility exists.
3
Foreclosing on a lien to acquire real property offers a tremendous advantage as opposed to other approaches, whereas it can be done in small claims court, in as little as 6 to 8 weeks, without an attorney, and without a Banks involvement to oppose your actions. It is not common or expected that one could cleverly take possession of real property through small claims court, which works in your benefit to help bypass the financed corruption. There will be some instances where misinformed employees from the courts will wrongfully refuse to file your lien, which is a denial of due process, and a breach of their duties and obligations. If you run into this issue feel free to email us and we will gladly provide you with some ideas from our research and experience to help you enforce your right, or find an alternative solution to accomplishing our objective. At the end of the day, anyone preventing you from recording your notice of lien in the public records is trespassing on your rights. This book is a first of a series of remedies that will restore the assets and wealth to the Indigenous and American People. American people are not the same as United States Citizens. Although that does not have much ado with the content of this book, it would serve to your benefit to understand this concept, as the rights Americans and Indigenous people are superior to the claim of US Corporations (United States Citizens). Before we move into the subject, please read over the definitions of the terms we will be using, which may be found on page 26.
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Differences between Real and Personal Property Real Property is the land and permanent structures built on top of it. The definition includes houses and real estate. Personal property is defined as any movable or intangible thing that is subject to ownership and not classified as real property. Personal property is everything else outside of real property. You need to pay close attention, as your knowing the difference between real and personal property, will be important for the creation of your lien and the filing of your affidavit to foreclose your lien. On your lien, you will have to choose to either list the collateral as real property (legal description) or personal property (Warranty Deed). Later we will discuss what to consider before making your determination. All deeds are Personal-Property, and must not be confused with real-property. A foreclosure is the process by which one disposes of personal property to receive rights to, or possession of collateral. For example, a Bank Forecloses on a Mortgage deed, so that it may take possession of the real-property, as collateral. The act of foreclosing, conveys the authority to the Moving party (person foreclosing), to take possession of the collateral attached to the Security Agreement. The Security Agreement does not have to be a Mortgage Deed - It could be a Deed of Trust, or another type of Document. We are going to be creating our own Security agreement to attach to the collateral. The security agreement serves as the foundational document of which establishes our lien right. We then file a lien, and foreclose on a that lien to be awarded the collateral listed in the Security Agreement.
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If you do not understand things up to this point, I encourage you to read over what you’ve just read, including the definitions, just one more time. Then as you continue to read, make sure to hold these concepts in memory, even if you have to print out the definitions and refer to them every time you read them in the text. Try to understand the terms like mathematical variables in an equation and the process will reveal itself to you. Take a look at the Security Agreement (Warranty Deed) in figure 1. I want you to easily be able to identify what it “looks like” when you see collateral attached to a Security Agreement. Notice how the section defining the collateral is indented. This alerts you to the fact that it is collateral attached. The indented section contains a LegalProperty-Description. This is how you identify real property in a Security Agreement. Although real property is attached, the warranty deed itself is personal property. Also take notice, that there are only two parties mentioned in this deed- The Grantor, and Grantee. A Bank does not have any interest in the Warranty Deed. Only the Grantee, which is typically the last known owner of the deed. Since we are acquiring vacant and abandoned houses, the Grantee usually will not be found in the County. That’s what we want. Again, the Warranty Deed in itself, is personal property. Therefore, we can structure our Security Agreement to attach the Warranty Deed as collateral or we can structure our Security Agreement to attach to the real property as collateral.
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Both methods will accomplish the same objective, but your determination as of which way to do this, depends on the way business is conducted in your County. The decision should be made in accordance with the result which will you to foreclose in Small-claims court. The only way you will know is by doing a little leg work. Some Counties will require all foreclosures that have a collateral interest in real-property to be handled in Superior Court. If this is the case, you want to list the Warranty Deed (personal property) as the collateral, so that you can foreclose in small claims court. Most Counties determine the the venue (Superior Court or small claims) solely off the amount of your claim. For example, all claims under $10,000 may be adjudicated in small claims court. The easiest way to be certain is to call and ask. Be specific, and write down the name of whoever gives you the authoritative answer.
- Question to Ask the Court Clerk “Sir or Ma’am I have a lien against real property
in the amount of $1000.00. Would I foreclose on that lien in small claims court or Superior Court?” If they as you what is the value of the real property, tell them that you do not know. You only know the value of your claim. Do not let them fish for information, remember you are not suppose to know how to do this The last part of the Foreclosure process takes place after the Judge awards your foreclosure and issues the writ of possession. The writ is executed by the Sheriff and should result in him making a trip to the vacant property, and opening the door for you, but more importantly, delivering your copy of the documentation, showing that he executed the writ.
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The court order granting the foreclosure in itself, should be enough to give you peaceful possession of the property, but it would better serve you to pursue the writ, and pay the Sheriff to execute the writ and perform the delivery of the collateral before you take physical possession.
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FIGURE 1
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Selecting the real property To make this work, you need to choose real property that is vacant and/or personal property (Warranty Deed) which has been Abandoned. You will have to do your own assessment to know if the real property is vacant, which shall be confirmed when you do not receive a response from the notices you will send during the creation of the Security Agreement (discussed later). Look for a property which appears to be vacant and abandoned. We are using the term abandoned, not in the sense that this procedure only applies to low quality housing, we are saying that we do not want to be contested in this process, so we don’t want to find out later on, that the property of our focus is under contract or being kept and maintained by a real estate agent. Now for the low down dirty truth. Even if the property is under contract, if you play your card right, that will be irrelevant. As the old saying goes, if you snooze, you lose. The same thing applies as you will later understand. If the individual responsible for maintaining the premises fails to do his part, he will lose the property to your process. There should be some degree of work needing to be done, so that you can provide a service and bill the owner which is essentially the requirement to create the Security Agreement and your lien. I recommend providing a service that is consistent with the State laws and/or City Ordinances of your locality. When you find the right property, write down the mailing address, and visit your County Recorders office to find the appropriate Warranty Deed associated with the property.
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If you are unfamiliar with how to locate the deeds for a given address, ask your state employees for assistance. They will help you. When you find the Warranty Deed you are searching for, write down the Grantee, as s/he is the owner and interested party who you will need to give your notice to, in order to perfect your Security Agreement. Again, the Security Agreement is the necessary contract, giving rise to your lien. Requirement for a Security Agreement Now, assuming you have located a vacant property to work on, and you have retrieved a copy of the last known Warranty Deed associated with it. You still cannot just randomly slap a lien against the Warranty Deed or Real Property, without first establishing a lien right (A claim against the deed). We first need to create the Security Agreement.
The Security Agreement is a critical part of this process. You should never file a lien without supporting facts which are to be found in the Security Agreement. Doing so could get you in trouble. Thus, I am essentially saying you should never file a lien without first creating your security agreement. The Notice of Intent provided for you on the next page is the template we have provided for you which has all the requirements to create a binding contract, which will attach to the collateral of your choosing (Warranty Deed or Real Property). Read the Security Agreement (Notice of Intent) in Figure 2.
Reading the Notice of Intent, you will see that part of your duties to fulfill your obligation under the agreement, requires your performance in terms of labor. The completion of your duties is what gives rise to your lien right, and the perfection (completion) of your Security Agreement.
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In order for the Security Agreement to be binding, you will be required to give notice to the Grantee on the Warranty Deed, so you can establish his or her consent to the contract (notice of intent). We already know that the owner will not reply to our notice because he has abandoned the property. Therefore we shall certify the Grantee’s consent by a process known as tacit acquiescence. This essentially means that “nonresponse”, constitutes the agreement and acceptance to the terms of the contract. Study the fourth paragraph in the notice of intent. After reading it, you should have noticed that the owners nonresponse, and the completion of your duties as set-forth in the security agreement gives rise and authority for you to file your lien, as we will discuss shortly.
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FIGURE2
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Security Agreement and Lien right To initiate your Security Agreement you first send the notice of intent to the owner, letting him or her know that you are going to provide a service for him, in exchange for payment, and that if he should fail to pay you, then he agrees and consents to your attaching his Warranty Deed (or the real property, as collateral to secure the debt under your Security Agreement. (This is expressed in the Notice of Intent previously discussed) If and only if, you do not receive a response, after the designated time (perhaps 2 weeks), then by the tacit acquiescence (non response) you have perfected (or completed) the security agreement and you can prepare to complete the labor items and duties as expressed in your security agreement. For those who may be wondering, let me briefly explain why you are not obliged to notify any Bank, about your process. It is irrelevant whether or not the Bank is listed on a Mortgage deed pointing to the same legal property description, because we have nothing to do with the Mortgage Deed. When we send and post our notice at the property, we are giving the Bank or Any one claiming interest the chance to speak up, or forfeit. This is why our notice of intent is specifically written to the Grantee or other anonymous Homeowner. This process can only work if the collateral under your security agreement is the Warranty Deed or real property description. Do not try this process on a Mortgage deed as you will be required to give the Bank named on the Deed a notice of your intent and your lien. Doing so will create adversity making your process a more challenging, and neglecting to do so will invalidate your claim in it’s entirety.
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Pay close attention to the Security Agreement as it is written in figure 2. Although subtle, it clearly identifies that the collateral securing the debt is the Warranty Deed, and does not give any reference to the real estate as collateral interest. If we can acquire the abandoned Warranty Deed (personal property) we shall receive the attached real property as an operation-of-law. In the sample provided we use the Warranty Deed as the collateral, but again, you need to base this decision of using the Warranty Deed or Legal Property Description upon the policies of your County court system. (Refer to the last paragraph on page 6 ) Some state jurisdictions have a requirement that security agreements which give rights to collateral of a debtor, must be made in writing and signed by the debtor. This is not a show stopper, but I am only bringing this up because I know someone reading this who is familiar with law, probably has foreseen this as a problem. Our process will not be invalidated, because there is also another clause to be found in most State Codes that make an exception to this requirement. That exception is made when the collateral is attached by the perfection of a contract. The entire structure of this process is working under this exception. Here is an excerpt from the Official Code of Georgia O.C.G.A. 11-9-203(b) a security interest is enforceable against the debtor and third parties with respect to the collateral only if...... [list of conditions follow]. None of the conditions that follow, apply to what we are trying to do, however careful reading of this code, including the codes of other States offer a solution, as may be found in O.C.G.A. 11-9-203(d) which reads:
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“When a person (The owner who abandoned the property) becomes bound by another person's security agreement (your security agreement in figure 2). A person becomes bound as debtor (that owner becomes your debtor) by a security agreement entered into by another person (You) if, by operation of law other than this article or by contract. ” Our Security agreement establishes our Contract in this matter. Posting the Security Agreement to the Premises Give notice to the owner by posting your Notice of Intent in the door and by sending it first class USPS mail to the owners last known address, which typically is the same address of the real property. You ascertain this information from the Warranty deed1 and/or Security Deed in the public record. If to your surprise you receive a reply or response, then you may want to abort your process because you the property is not abandoned. It is not your intention deprive anyone from their right to property, so you must seek property that is abandoned or vacant to the best of your knowledge. You should not expect a reply, however If you do receive a reply, you may consider abandoning the process and trying your luck on another one of the thousands of vacant properties across America. The goal is not to receive a response, so that you can begin fulfilling your labor obligations under the contract (notice and intent). Executing your duties under the contract and filing a lien.
1
Pay attention to the deed, because sometimes (rarely) owners will provide a different mailing address other than the property address on the deed. This isnʼt common but it does happen.
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After you perform the labor, you need to send an invoice to the property owner, allowing him at least 2 weeks to satisfy the debt obligation for the labor performed. Upon sending the invoice, you may also file your lien in the County Recorders office. In the State of Georgia which is the model state used in creating our documents, there is no required waiting period before you can file your lien and this normally holds true for most other states as well. Send a bill to the premises so that you have a complete process. The bill can be just a simple request for payment due for your services, and a small itemization of the work items performed, and the date in which you expect to receive payment. Two weeks from the completion of the labor may be sufficient. I would recommend you consider billing at a fair price, roughly $150 to $500, as you do not want to draw a lot of attention to what you are doing. The debt evidenced in the bill, is the same amount for which you will be evidencing in your lien. Keep clean and verifiable records because if you are working with multiple properties, there is a good chance that some of these liens may just get paid outright by an interested party (A real estate Company or Attorney). Once your lien is filed. Your end result is either some interested party pays out your claim (Owner, Grantee on Warranty Deed, Bank, or attorney), or you acquire the property through your foreclosure on the lien. By keeping your claim below $500, and foreclosing in small claims court, you will indirectly create a diversion which will keep Banks looking in the wrong direction. Technically if nobody responds during the perfection of your lien, nobody will
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have the proper standing (or authority) to challenge your lien in the Foreclosure process. Furthermore, it will cost a Bank well over $5,000 to higher an Attorney to challenge your $500 lien. It is not cost efficient nor will the Bank invest enough attention in such a trivial lawsuit, which may cause them to completely miss the fact that you are about to take possession of real property. This is the beauty of this process. It’s seamless. Figure 3 is a sample lien which results from the steps taken to perfect your interest in the collateral as expressed up to this point. This particular lien attaches the Warranty Deed (personal property) as the collateral. Notice the indention. Remember, if the circumstances of your County make your lien better suited to attach to real property, then you need to attach the legal description as opposed to the Warranty Deed. This is an Update (June 2012). Although you can still file the lien against the deed, better results are coming from using the REAL PROPERTY (legal description), as I have described in the sample lien (FIGURE 3) This has been amended. We now recommend you file the lien against the real property When you have completed the labor and have sent your bill to the registered owner on the deed, you can now file a lien against the collateral as seen figure 3.
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FIGURE 3
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Foreclosing in Small Claims Court You are now at the final step in this process which is the road you are going to have to cross on your own. In the remaining documents, we have provided you with a baseline template for the series of documents that you will need to foreclose your lien in small claims court. Each Court has slight variations in their process, so visit the office of the Clerk for the Court in advance and ask them where and how to file a civil action for Foreclosure in small claims court. The documents provided throughout the remainder of the book will constitute 80 - 100% of what the court will require from you. Most small claims courts will have ready made forms for you to initiate the foreclosure process, but this isn’t always the case. In the event your county does not provide the forms, you will have to create them yourself. The templates provided below are specifically structured in accordance with the requirements under the Statutory Code of Georgia, however you will find these to be timesaving templates should you need to alter them for your own State. You should spend a few hours researching your states requirements to filing your lien and foreclosing as preparing documents for all 50 states would not be feasible for the author of this guide. With a little research you will find that these forms are either completely adaptable, or they require slight changes, but again in several instances, the court’s will already have the necessary forms prepared for you. If, after finishing this book, you are still not clear as to how to use these documents, then you need to read this book again and strengthen your understanding of the terminology so you can be successful. Do not be intimidated to act on what you’ve learned in this guide. You have nothing to lose and everything to gain.
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Substituted Service Requirements When you file your affidavit to foreclose, the court will require that you serve the interested parties. In some circumstances you will be required to use substituted service. Meaning you have to use the courts alternative method of fulfilling the servicing requirements, since the Grantee (last know owner) will not be responding to your notices. Substituted service, often requires that the documents be mailed to the recipient, and typically requires a serving party to show that ordinary service is impracticable, and that due diligence has been made to attempt to make personal service by delivery.
In most cases the sheriffs entry of service showing that the Sheriff did attempt to make service to the defendant at the last known address of which you have provided. You will find that it usually works to your advantage to use the standard forms requiring the Sheriff to execute the service, as many times simply posting the your the summons and service notice to the premises will suffice. The Affidavit for Foreclosure of lien The Affidavit in Figure 4 initiates the foreclosure action with the Court. More than likely the court will have it’s own standard form, readily available for “Foreclosure on Personal Property” for your usage. In the event that they do not, the template form below is provided for your convenience. Notice and Summons Next is the notice and summons (see Figure 5). Most of the time a summons will be provided for you. When the court issues the summons you will need to pay a fee to have the sheriff serve notice of your civil action (Notice of foreclosure) to
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the defendant. The defendant, is going to be the last known owner, or the “Grantee” on the Warranty Deed. Writ of Possession The next filing is an application for a Writ of Possession, as seen in Figure 6. The writ is typically filed as part of your civil action after the time expires from which the defendant is required to file an answer to your claim. Make sure you do not just assume that the defendant has seven(7) days as expressed in this application for writ. Your state may offer more or less time to respond. One last piece of personal advice, you will have a much higher success rate if you file all your documents, affidavits, and pleadings into the record, and initiate your Foreclosure process by USPS mail. Try to avoid showing up in person. Remember I am revealing something that you are not suppose to know about. In some instances we have learned that clerks and certain state employees have been wrongfully trained to deny you due process which is a form of corruption that usually does not surface if you conduct all your business via certified or registered mail. If you have any questions, or if you need clarification on any of the concepts as expressed in this Book, feel free to email us at coaching@thctrust.org and we will assist you to the best of our ability, as time permits.
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FIGURE 4
23
24
FIGURE 5
25
FIGURE 6
26
FIGURE 7
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DEFINITIONS Collateral - The term given to designate personal property subject to a security interest.
can be real property or personal property. The most FIGURE 5 types are: goods, instruments, chattel paper, documents, accounts, general intangibles, and rental property. Anything attached or expressed as collateral under a Deed, Lien, or other type of Security Agreement. Foreclosure - the way by which one disposes of personal property to receive rights to or possession of collateral Legal Description - A formal description identifying real property including any part subject to an easement or reservation, complete enough that a particular piece of land can be located and identified. It includes metes and bounds, or lot numbers of a recorded plat. Mortgage Deed - A deed that conveys title to property that is given as security (collateral) for the payment of a debt or performance of a duty. Operation of law - The means by which a right or a liability is created for a party regardless of the party’s actual intent. Personal property - Any movable or intangible thing that is subject to ownership and not classified as real property. [Blacks Law 8th] See the definition of collateral Real Property - Land and anything growing on, attached to, or erected on it, excluding anything that may be severed without injury to the land. [Blacks law 8th] Houses and real-estate are classified as real property Security Agreement - An agreement that creates or provides for an interest in
specified real or personal property to guarantee the performance of an obligation. [Blacks Law 8th]. Any document which secures an interest in collateral may be classified as a security agreement. Some examples would be Mortgage Deeds, Deeds of Trust, Purchase Agreements. Security Agreements give certain parties the right to establish liens. Tacit acquiescence - the act or condition of acquiescing or giving tacit assent; agreement or consent by silence or without objection; compliance
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This e-book has been written to provide information about acquiring vacant and abandoned property by foreclosing. Every effort has been made to make this ebook as complete and accurate as possible. However, there may be mistakes in typography or content. Therefore, this ebook should be used as a guide - not as the ultimate source of Internet Marketing information. The purpose of this ebook is to educate. The author and the publisher does not warrant that the information contained in this e-book is fully complete and shall not be responsible for any errors or omissions. The author and publisher shall have neither liability nor responsibility to any person or entity with respect to any loss or damage caused or alleged to be caused …show more content…
directly or indirectly by this ebook.
1
Proverbs 3:5,6 - "Trust in the Lord with all your heart and lean not on your own understanding; in all your ways acknowledge Him, and He will make your paths straight." First, you find an Abandoned House.
Then, clean the lawn and fix up the broken windows. Next, you send a bill to the last known owner of record. Now, you file a Claim of Lien in the County Recorders office to secure the property. Finally, you foreclose on your lien, and subsequently receive the default judgment on your claim, because no one is there to Challenge your Claim. The clerk of the Court issues the writ of possession and execution. You pay the Sheriff $100 and he executes the writ. Congratulations you just acquired a house!
After reading this book, you will know how to acquire vacant and/or abandoned homes, (including “Bank Owned” houses) using a relatively quick and efficient …show more content…
2
method. That method, being the act of foreclosing on a lien in small claims court, and taking possession of the Warranty Deed (or real property) as collateral. This method is being presented, as opposed to the traditional way of foreclosing on a Mortgage Deeds, which is a process reserved for the Banks, and typically takes place in higher Courts. There are several caveats to foreclosing on a Mortgage which make it complex and not feasible for the average person. The process involves filing public notices, an extensive knowledge of the traditional foreclosure process, and you will be guaranteed to wait minimum of two to three months before a remote chance at remedy. You will also have to ward your claim against attorneys from the Bank named on the Mortgage deed who will use every tactic of which is legal and sometimes illegal to block and tie up your process. The Attorneys goal is to keep the case open as long as possible because his pockets are being funded. Unfortunately, your’s are not. Another unfortunate truth, is that corruption has deeply penetrated the Judicial System as it deals with Foreclosures and alleged Bank Owned Properties. The risks and financial feasibility of going this route (Traditional Foreclosure), does not provide for a practical solution. Contrary to foreclosing on a Mortgage, someone could foreclose on a their own established lien to gain possession to real-property, if one only knew such possibility exists.
3
Foreclosing on a lien to acquire real property offers a tremendous advantage as opposed to other approaches, whereas it can be done in small claims court, in as little as 6 to 8 weeks, without an attorney, and without a Banks involvement to oppose your actions. It is not common or expected that one could cleverly take possession of real property through small claims court, which works in your benefit to help bypass the financed corruption. There will be some instances where misinformed employees from the courts will wrongfully refuse to file your lien, which is a denial of due process, and a breach of their duties and obligations. If you run into this issue feel free to email us and we will gladly provide you with some ideas from our research and experience to help you enforce your right, or find an alternative solution to accomplishing our objective. At the end of the day, anyone preventing you from recording your notice of lien in the public records is trespassing on your rights. This book is a first of a series of remedies that will restore the assets and wealth to the Indigenous and American People. American people are not the same as United States Citizens. Although that does not have much ado with the content of this book, it would serve to your benefit to understand this concept, as the rights Americans and Indigenous people are superior to the claim of US Corporations (United States Citizens). Before we move into the subject, please read over the definitions of the terms we will be using, which may be found on page 26.
4
Differences between Real and Personal Property Real Property is the land and permanent structures built on top of it. The definition includes houses and real estate. Personal property is defined as any movable or intangible thing that is subject to ownership and not classified as real property. Personal property is everything else outside of real property. You need to pay close attention, as your knowing the difference between real and personal property, will be important for the creation of your lien and the filing of your affidavit to foreclose your lien. On your lien, you will have to choose to either list the collateral as real property (legal description) or personal property (Warranty Deed). Later we will discuss what to consider before making your determination. All deeds are Personal-Property, and must not be confused with real-property. A foreclosure is the process by which one disposes of personal property to receive rights to, or possession of collateral. For example, a Bank Forecloses on a Mortgage deed, so that it may take possession of the real-property, as collateral. The act of foreclosing, conveys the authority to the Moving party (person foreclosing), to take possession of the collateral attached to the Security Agreement. The Security Agreement does not have to be a Mortgage Deed - It could be a Deed of Trust, or another type of Document. We are going to be creating our own Security agreement to attach to the collateral. The security agreement serves as the foundational document of which establishes our lien right. We then file a lien, and foreclose on a that lien to be awarded the collateral listed in the Security Agreement.
5
If you do not understand things up to this point, I encourage you to read over what you’ve just read, including the definitions, just one more time. Then as you continue to read, make sure to hold these concepts in memory, even if you have to print out the definitions and refer to them every time you read them in the text. Try to understand the terms like mathematical variables in an equation and the process will reveal itself to you. Take a look at the Security Agreement (Warranty Deed) in figure 1. I want you to easily be able to identify what it “looks like” when you see collateral attached to a Security Agreement. Notice how the section defining the collateral is indented. This alerts you to the fact that it is collateral attached. The indented section contains a LegalProperty-Description. This is how you identify real property in a Security Agreement. Although real property is attached, the warranty deed itself is personal property. Also take notice, that there are only two parties mentioned in this deed- The Grantor, and Grantee. A Bank does not have any interest in the Warranty Deed. Only the Grantee, which is typically the last known owner of the deed. Since we are acquiring vacant and abandoned houses, the Grantee usually will not be found in the County. That’s what we want. Again, the Warranty Deed in itself, is personal property. Therefore, we can structure our Security Agreement to attach the Warranty Deed as collateral or we can structure our Security Agreement to attach to the real property as collateral.
6
Both methods will accomplish the same objective, but your determination as of which way to do this, depends on the way business is conducted in your County. The decision should be made in accordance with the result which will you to foreclose in Small-claims court. The only way you will know is by doing a little leg work. Some Counties will require all foreclosures that have a collateral interest in real-property to be handled in Superior Court. If this is the case, you want to list the Warranty Deed (personal property) as the collateral, so that you can foreclose in small claims court. Most Counties determine the the venue (Superior Court or small claims) solely off the amount of your claim. For example, all claims under $10,000 may be adjudicated in small claims court. The easiest way to be certain is to call and ask. Be specific, and write down the name of whoever gives you the authoritative answer.
- Question to Ask the Court Clerk “Sir or Ma’am I have a lien against real property
in the amount of $1000.00. Would I foreclose on that lien in small claims court or Superior Court?” If they as you what is the value of the real property, tell them that you do not know. You only know the value of your claim. Do not let them fish for information, remember you are not suppose to know how to do this The last part of the Foreclosure process takes place after the Judge awards your foreclosure and issues the writ of possession. The writ is executed by the Sheriff and should result in him making a trip to the vacant property, and opening the door for you, but more importantly, delivering your copy of the documentation, showing that he executed the writ.
7
The court order granting the foreclosure in itself, should be enough to give you peaceful possession of the property, but it would better serve you to pursue the writ, and pay the Sheriff to execute the writ and perform the delivery of the collateral before you take physical possession.
8
FIGURE 1
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Selecting the real property To make this work, you need to choose real property that is vacant and/or personal property (Warranty Deed) which has been Abandoned. You will have to do your own assessment to know if the real property is vacant, which shall be confirmed when you do not receive a response from the notices you will send during the creation of the Security Agreement (discussed later). Look for a property which appears to be vacant and abandoned. We are using the term abandoned, not in the sense that this procedure only applies to low quality housing, we are saying that we do not want to be contested in this process, so we don’t want to find out later on, that the property of our focus is under contract or being kept and maintained by a real estate agent. Now for the low down dirty truth. Even if the property is under contract, if you play your card right, that will be irrelevant. As the old saying goes, if you snooze, you lose. The same thing applies as you will later understand. If the individual responsible for maintaining the premises fails to do his part, he will lose the property to your process. There should be some degree of work needing to be done, so that you can provide a service and bill the owner which is essentially the requirement to create the Security Agreement and your lien. I recommend providing a service that is consistent with the State laws and/or City Ordinances of your locality. When you find the right property, write down the mailing address, and visit your County Recorders office to find the appropriate Warranty Deed associated with the property.
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If you are unfamiliar with how to locate the deeds for a given address, ask your state employees for assistance. They will help you. When you find the Warranty Deed you are searching for, write down the Grantee, as s/he is the owner and interested party who you will need to give your notice to, in order to perfect your Security Agreement. Again, the Security Agreement is the necessary contract, giving rise to your lien. Requirement for a Security Agreement Now, assuming you have located a vacant property to work on, and you have retrieved a copy of the last known Warranty Deed associated with it. You still cannot just randomly slap a lien against the Warranty Deed or Real Property, without first establishing a lien right (A claim against the deed). We first need to create the Security Agreement.
The Security Agreement is a critical part of this process. You should never file a lien without supporting facts which are to be found in the Security Agreement. Doing so could get you in trouble. Thus, I am essentially saying you should never file a lien without first creating your security agreement. The Notice of Intent provided for you on the next page is the template we have provided for you which has all the requirements to create a binding contract, which will attach to the collateral of your choosing (Warranty Deed or Real Property). Read the Security Agreement (Notice of Intent) in Figure 2.
Reading the Notice of Intent, you will see that part of your duties to fulfill your obligation under the agreement, requires your performance in terms of labor. The completion of your duties is what gives rise to your lien right, and the perfection (completion) of your Security Agreement.
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In order for the Security Agreement to be binding, you will be required to give notice to the Grantee on the Warranty Deed, so you can establish his or her consent to the contract (notice of intent). We already know that the owner will not reply to our notice because he has abandoned the property. Therefore we shall certify the Grantee’s consent by a process known as tacit acquiescence. This essentially means that “nonresponse”, constitutes the agreement and acceptance to the terms of the contract. Study the fourth paragraph in the notice of intent. After reading it, you should have noticed that the owners nonresponse, and the completion of your duties as set-forth in the security agreement gives rise and authority for you to file your lien, as we will discuss shortly.
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FIGURE2
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Security Agreement and Lien right To initiate your Security Agreement you first send the notice of intent to the owner, letting him or her know that you are going to provide a service for him, in exchange for payment, and that if he should fail to pay you, then he agrees and consents to your attaching his Warranty Deed (or the real property, as collateral to secure the debt under your Security Agreement. (This is expressed in the Notice of Intent previously discussed) If and only if, you do not receive a response, after the designated time (perhaps 2 weeks), then by the tacit acquiescence (non response) you have perfected (or completed) the security agreement and you can prepare to complete the labor items and duties as expressed in your security agreement. For those who may be wondering, let me briefly explain why you are not obliged to notify any Bank, about your process. It is irrelevant whether or not the Bank is listed on a Mortgage deed pointing to the same legal property description, because we have nothing to do with the Mortgage Deed. When we send and post our notice at the property, we are giving the Bank or Any one claiming interest the chance to speak up, or forfeit. This is why our notice of intent is specifically written to the Grantee or other anonymous Homeowner. This process can only work if the collateral under your security agreement is the Warranty Deed or real property description. Do not try this process on a Mortgage deed as you will be required to give the Bank named on the Deed a notice of your intent and your lien. Doing so will create adversity making your process a more challenging, and neglecting to do so will invalidate your claim in it’s entirety.
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Pay close attention to the Security Agreement as it is written in figure 2. Although subtle, it clearly identifies that the collateral securing the debt is the Warranty Deed, and does not give any reference to the real estate as collateral interest. If we can acquire the abandoned Warranty Deed (personal property) we shall receive the attached real property as an operation-of-law. In the sample provided we use the Warranty Deed as the collateral, but again, you need to base this decision of using the Warranty Deed or Legal Property Description upon the policies of your County court system. (Refer to the last paragraph on page 6 ) Some state jurisdictions have a requirement that security agreements which give rights to collateral of a debtor, must be made in writing and signed by the debtor. This is not a show stopper, but I am only bringing this up because I know someone reading this who is familiar with law, probably has foreseen this as a problem. Our process will not be invalidated, because there is also another clause to be found in most State Codes that make an exception to this requirement. That exception is made when the collateral is attached by the perfection of a contract. The entire structure of this process is working under this exception. Here is an excerpt from the Official Code of Georgia O.C.G.A. 11-9-203(b) a security interest is enforceable against the debtor and third parties with respect to the collateral only if...... [list of conditions follow]. None of the conditions that follow, apply to what we are trying to do, however careful reading of this code, including the codes of other States offer a solution, as may be found in O.C.G.A. 11-9-203(d) which reads:
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“When a person (The owner who abandoned the property) becomes bound by another person's security agreement (your security agreement in figure 2). A person becomes bound as debtor (that owner becomes your debtor) by a security agreement entered into by another person (You) if, by operation of law other than this article or by contract. ” Our Security agreement establishes our Contract in this matter. Posting the Security Agreement to the Premises Give notice to the owner by posting your Notice of Intent in the door and by sending it first class USPS mail to the owners last known address, which typically is the same address of the real property. You ascertain this information from the Warranty deed1 and/or Security Deed in the public record. If to your surprise you receive a reply or response, then you may want to abort your process because you the property is not abandoned. It is not your intention deprive anyone from their right to property, so you must seek property that is abandoned or vacant to the best of your knowledge. You should not expect a reply, however If you do receive a reply, you may consider abandoning the process and trying your luck on another one of the thousands of vacant properties across America. The goal is not to receive a response, so that you can begin fulfilling your labor obligations under the contract (notice and intent). Executing your duties under the contract and filing a lien.
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Pay attention to the deed, because sometimes (rarely) owners will provide a different mailing address other than the property address on the deed. This isnʼt common but it does happen.
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After you perform the labor, you need to send an invoice to the property owner, allowing him at least 2 weeks to satisfy the debt obligation for the labor performed. Upon sending the invoice, you may also file your lien in the County Recorders office. In the State of Georgia which is the model state used in creating our documents, there is no required waiting period before you can file your lien and this normally holds true for most other states as well. Send a bill to the premises so that you have a complete process. The bill can be just a simple request for payment due for your services, and a small itemization of the work items performed, and the date in which you expect to receive payment. Two weeks from the completion of the labor may be sufficient. I would recommend you consider billing at a fair price, roughly $150 to $500, as you do not want to draw a lot of attention to what you are doing. The debt evidenced in the bill, is the same amount for which you will be evidencing in your lien. Keep clean and verifiable records because if you are working with multiple properties, there is a good chance that some of these liens may just get paid outright by an interested party (A real estate Company or Attorney). Once your lien is filed. Your end result is either some interested party pays out your claim (Owner, Grantee on Warranty Deed, Bank, or attorney), or you acquire the property through your foreclosure on the lien. By keeping your claim below $500, and foreclosing in small claims court, you will indirectly create a diversion which will keep Banks looking in the wrong direction. Technically if nobody responds during the perfection of your lien, nobody will
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have the proper standing (or authority) to challenge your lien in the Foreclosure process. Furthermore, it will cost a Bank well over $5,000 to higher an Attorney to challenge your $500 lien. It is not cost efficient nor will the Bank invest enough attention in such a trivial lawsuit, which may cause them to completely miss the fact that you are about to take possession of real property. This is the beauty of this process. It’s seamless. Figure 3 is a sample lien which results from the steps taken to perfect your interest in the collateral as expressed up to this point. This particular lien attaches the Warranty Deed (personal property) as the collateral. Notice the indention. Remember, if the circumstances of your County make your lien better suited to attach to real property, then you need to attach the legal description as opposed to the Warranty Deed. This is an Update (June 2012). Although you can still file the lien against the deed, better results are coming from using the REAL PROPERTY (legal description), as I have described in the sample lien (FIGURE 3) This has been amended. We now recommend you file the lien against the real property When you have completed the labor and have sent your bill to the registered owner on the deed, you can now file a lien against the collateral as seen figure 3.
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FIGURE 3
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Foreclosing in Small Claims Court You are now at the final step in this process which is the road you are going to have to cross on your own. In the remaining documents, we have provided you with a baseline template for the series of documents that you will need to foreclose your lien in small claims court. Each Court has slight variations in their process, so visit the office of the Clerk for the Court in advance and ask them where and how to file a civil action for Foreclosure in small claims court. The documents provided throughout the remainder of the book will constitute 80 - 100% of what the court will require from you. Most small claims courts will have ready made forms for you to initiate the foreclosure process, but this isn’t always the case. In the event your county does not provide the forms, you will have to create them yourself. The templates provided below are specifically structured in accordance with the requirements under the Statutory Code of Georgia, however you will find these to be timesaving templates should you need to alter them for your own State. You should spend a few hours researching your states requirements to filing your lien and foreclosing as preparing documents for all 50 states would not be feasible for the author of this guide. With a little research you will find that these forms are either completely adaptable, or they require slight changes, but again in several instances, the court’s will already have the necessary forms prepared for you. If, after finishing this book, you are still not clear as to how to use these documents, then you need to read this book again and strengthen your understanding of the terminology so you can be successful. Do not be intimidated to act on what you’ve learned in this guide. You have nothing to lose and everything to gain.
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Substituted Service Requirements When you file your affidavit to foreclose, the court will require that you serve the interested parties. In some circumstances you will be required to use substituted service. Meaning you have to use the courts alternative method of fulfilling the servicing requirements, since the Grantee (last know owner) will not be responding to your notices. Substituted service, often requires that the documents be mailed to the recipient, and typically requires a serving party to show that ordinary service is impracticable, and that due diligence has been made to attempt to make personal service by delivery.
In most cases the sheriffs entry of service showing that the Sheriff did attempt to make service to the defendant at the last known address of which you have provided. You will find that it usually works to your advantage to use the standard forms requiring the Sheriff to execute the service, as many times simply posting the your the summons and service notice to the premises will suffice. The Affidavit for Foreclosure of lien The Affidavit in Figure 4 initiates the foreclosure action with the Court. More than likely the court will have it’s own standard form, readily available for “Foreclosure on Personal Property” for your usage. In the event that they do not, the template form below is provided for your convenience. Notice and Summons Next is the notice and summons (see Figure 5). Most of the time a summons will be provided for you. When the court issues the summons you will need to pay a fee to have the sheriff serve notice of your civil action (Notice of foreclosure) to
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the defendant. The defendant, is going to be the last known owner, or the “Grantee” on the Warranty Deed. Writ of Possession The next filing is an application for a Writ of Possession, as seen in Figure 6. The writ is typically filed as part of your civil action after the time expires from which the defendant is required to file an answer to your claim. Make sure you do not just assume that the defendant has seven(7) days as expressed in this application for writ. Your state may offer more or less time to respond. One last piece of personal advice, you will have a much higher success rate if you file all your documents, affidavits, and pleadings into the record, and initiate your Foreclosure process by USPS mail. Try to avoid showing up in person. Remember I am revealing something that you are not suppose to know about. In some instances we have learned that clerks and certain state employees have been wrongfully trained to deny you due process which is a form of corruption that usually does not surface if you conduct all your business via certified or registered mail. If you have any questions, or if you need clarification on any of the concepts as expressed in this Book, feel free to email us at coaching@thctrust.org and we will assist you to the best of our ability, as time permits.
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FIGURE 4
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FIGURE 5
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FIGURE 6
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FIGURE 7
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DEFINITIONS Collateral - The term given to designate personal property subject to a security interest.
can be real property or personal property. The most FIGURE 5 types are: goods, instruments, chattel paper, documents, accounts, general intangibles, and rental property. Anything attached or expressed as collateral under a Deed, Lien, or other type of Security Agreement. Foreclosure - the way by which one disposes of personal property to receive rights to or possession of collateral Legal Description - A formal description identifying real property including any part subject to an easement or reservation, complete enough that a particular piece of land can be located and identified. It includes metes and bounds, or lot numbers of a recorded plat. Mortgage Deed - A deed that conveys title to property that is given as security (collateral) for the payment of a debt or performance of a duty. Operation of law - The means by which a right or a liability is created for a party regardless of the party’s actual intent. Personal property - Any movable or intangible thing that is subject to ownership and not classified as real property. [Blacks Law 8th] See the definition of collateral Real Property - Land and anything growing on, attached to, or erected on it, excluding anything that may be severed without injury to the land. [Blacks law 8th] Houses and real-estate are classified as real property Security Agreement - An agreement that creates or provides for an interest in
specified real or personal property to guarantee the performance of an obligation. [Blacks Law 8th]. Any document which secures an interest in collateral may be classified as a security agreement. Some examples would be Mortgage Deeds, Deeds of Trust, Purchase Agreements. Security Agreements give certain parties the right to establish liens. Tacit acquiescence - the act or condition of acquiescing or giving tacit assent; agreement or consent by silence or without objection; compliance
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