need to determine ownership of a property

My HOA in Michigan needs to determine ownership of a property. This is because someone (Person B) who lives at the property wants to serve as a trustee. According to our bylaws, only a property owner may serve as a trustee.

Person B has said he has a land contract to buy the property from another person (Person A) who no longer lives at the property.

According to the Register of Deeds, Person A holds the deed (2000), as well as two mortgages (2001 and 2005). A third mortgage from 2000 was discharged in 2002.)

The Register of Deeds does not show any documents with Person B's name on it, that could tie Person B to the property.

We think that, if a land contract does exist, it is an unrecorded land contract.

Although not relevant to the question of ownership of the HOA property, Person A bought a home in a neighboring city in 2009 at the same time Person B moved into our HOA.

Our board of trustees is uncomfortable taking the word of Person B that he has a land contract and should be considered the owner. Even if Person B shows us a land contract, we're not comfortable declaring him the owner because we can see that Person A still has two mortgages on the property, and the land contract is unrecorded.

Person B is pretty angry and feels he's being unfairly denied an opportunity to serve as a trustee.

(Personally, I think Person B should lie low and not be making any noise about ownership. My guess is that's Person A's take on it as well. Person A does not want his mortgage company to find out he's sold the property. We think there could be some mortgage fraud going on, but that's just conjecture.)

Thank you for any insight you can give.

~ HOA secretary

I would say ownership is the person on the deed.

> We think there could be some mortgage fraud going on

Fraud might not be the right word, however this is almost certainly a violation of the terms of the mortgage. If the mortgage holder finds out they are likely to demand immediate repayment of the principal.

Death and Taxes are the two things assured in life... A trip to your county's tax assessor's office can help sort this out. Though those records may not be in real time. The transaction had to have happen in that year. Just need to know the lot number of the property. They should be able to tell you the rest.

What does it say in your governing documents regarding ownership and membership? Look for definitions of owner and contract seller in your CC&Rs, as well as any statements regarding members and membership from your bylaws. My docs define all of that, as well as this statement in the bylaws: "If ownership is acquired but not of record...the person acquiring or succeeding to ownership shall present the Board of Directors of the Association evidence satisfactory to it of facts evidencing lawful ownership...".

Our problem in determining ownership of the property is getting curiouser and curiouser.

The owner of record (the person with two existing mortgages that predate the land contract) has threatened to sue me for what he calls "pursuing too far" into his personal life. I explained that the only documents I have seen are those that are publicly on file at the Register of Deeds.

I explained that my problem with accepting the land contract as proof of ownership is that he still has two mortgages that predate the land contract, and therefore are superior to the land contract. For that reason, we need to consider him the owner of record.

I should probably also mention that I've never seen the land contract.

This morning he sent a message stating that I've spent too much time on this and pointed out that the township records show the buyer (the guy who wants to be a trustee candidate) as paying the taxes. (This is true. The Township tax records do show that the buyer is paying the taxes.)

I explained (again) that determining ownership of HOA property is a routine task, one that I've done for eight years. Ownership is determined for all of our HOA properties, not only properties covered by a land contract. I explained that It is important to ensure that voting is restricted to those who are entitled to vote, and that only property owners or holders of land contracts serve as trustees. If I do not do my duty as secretary, votes can be challenged and the board can be exposed to liability for misconduct. I have a responsibility to try to protect our HOA.

In a phone conversation yesterday with the owner, he was polite but made quite a few contradictory statement. At first he said his bank was "fine with" him making a land contract, and then said that the fact that he owned his property "free and clear" allowed him to make a land contract.

In a message this morning, the buyer writes that with the county deeds search database, "any time a person may refinance or the bank sells a mortgage to another division or bank, a transaction line item will appear. It does not mean a second or third mortgage has been placed against the property." I don't know what is meant by this, but last night the buyer suggested that the Register of Deeds information was not correct.

So.. what do I do? I feel my primary duty is to my HOA and feel it would be inappropriate for me to take the word of the owner that he has legitimately and legally "sold" the property to the guy who wants to be a trustee candidate.

Do I cave to social pressure? This week the HOA President and I have received several angry e-mails about this issue, and there are suggestions that we're discriminating against the guy who wants to be a trustee candidate because we "don't like him".

-- stressed HOA secretary

Here's another way to ask the question.

Let's say the buyer won the lottery and was able to pay cash for the house. There's no land contract at all, recorded or unrecorded. The buyer has moved in, pays utilities and taxes, and considers the house his.

But - and this is a big but - there are still two mortgages against the property in the seller's name. Those mortgages predate the cash sale.

For this reason, our HOA would consider the seller as still being the owner of record. The seller is the only one connected to the property in the Register of Deeds records.

Does that make sense?

Btw... Records are not updated in a timely manner... I still show up on records for vehicles I used to own years ago. Show up on my credit report even though paid off and sold. If you do not go and change some records it could take months to show up. When I bought my houses had to go register them at the tax assesors office myself for tax exemption status filing. Some people never take this step and shows up as last owner... The same with deeds... It does not change records immediately upon sales...

ditto JohnC46

whoever is named on the recorded deed

My question is why you are so determined to prevent him from serving? Would he not have to be elected? If a majority know his circumstances want him to serve, for gods sake let him. If he sucks, he will be voted out. He has a land contract and pays taxes on the property and thus a vested interest. Are you so overrun with volunteers that you are turning them away?

So, if I have my tax bill mailed to my accountant, does that mean my account owns my home?

An HOA has the responsibility to include the owners of properties. Ownership is not always of record. For example a property can be acquired by a judgment, a death, or a dissolution. The first place to look is in your bylaws. What is the specific language in your bylaws regarding membership of an owner in your HOA?