In a recent case, a Child borrowed money from a Parent to buy a home. To secure repayment, the Parent took a one percent ownership interest in the home to ensure that he would have notice if the Child ever tried to mortgage or sell the Home. But the Act of Sale was not clearly drafted, and the Parent’s interest was obscured in an inscrutable footnote. Decades later, the Child mortgaged the Home to secure a loan.
When the Child defaulted on the loan, the Bank discovered that the mortgage only encumbered 99% of the Home. The Parent had died decades prior, and no succession had been opened, as he had no assets and significant debt. Although the Child was cooperative, he had no interest in opening a succession to resolve the issue.
Accordingly, the Firm had the Bank foreclose on the 99% ownership interest. We then instituted a licitation action and purchased the Property at Sheriff’s Sale. As the Bank owned 99% of the Home, it only had to pay 1% of the purchase price, which amount was then deposited in the registry of the Court. The Bank was able credit bid its ownership interest, thus resulting in an actual payment of only 1% of the total price to secure ownership of the entire Home.