Ohio - Rights re: Verbal Contract and Liens??

[Florence992]

What is the name of your state (only U.S. law)? Ohio

A friend of mine in Ohio purchased a home on land contract that was not in writing. She paid the total amount agreed to over the course of 10 years - all payments made on time. She has all of her receipts for payments as well as the real etates tax payments.

After she paid this off she asked the seller for the deed to the property. The seller keeps avoiding her and will not get in contact. Now we found out that the seller has two unpaid mortgages against the property and will probably be foreclosed on the property that my friend thought she owned.

Does my friend have any rights here, or will she just be put out on the street? Do unwritten land contracts stand up in court? If they do and the deed is transferred to my friend, would my friend be responsible for the amount of the mortgages on this property? Thank you for any help you can give me - we are so confused!What is the name of your state (only U.S. law)?

 

[divona2000]

...purchased a home on land contract that was not in writing.

...paid the total amount agreed to over the course of 10years..

...has all of her receipts for payments as well as the real etates tax payments.

...paid this off she asked the seller for the deed to the property

...found out that the seller has two unpaid mortgages against the property...

Real estate contracts must be in writing.
She paid rent for 10 years.
and paid the property taxes for the owner.
seller can't give a deed for property they did not actually sell.
and the mortgages would likely have called for 'payment in full' had the owner actually sold the property.

 

[Florence992]

Any other legal options?

Thank you for your response to my questions. Would there be any other legal options to deal with a seller who has scammed a buyer out of $120,000, thinking they would be the owner of the property after it was paid off? I understand that it was very dumb to not have a contract in writing. Would a court uphold a verbal contract under any circumstances? Also, the real estate taxes were paid over this ten year period by my friend and her name is listed on the tax records. Would this not be proof that she has any rights to this property? Thanks!

 

[ecmst12]

The money she paid will be considered rent - paid for the priviledge of living there.

 

[Mass_Shyster]

Thank you for your response to my questions. Would there be any other legal options to deal with a seller who has scammed a buyer out of $120,000, thinking they would be the owner of the property after it was paid off? I understand that it was very dumb to not have a contract in writing. Would a court uphold a verbal contract under any circumstances? Also, the real estate taxes were paid over this ten year period by my friend and her name is listed on the tax records. Would this not be proof that she has any rights to this property? Thanks!

Your friend needs to seek an attorney, but she may prevail:

It will still end up a case of he said/she said. Seller will likely claim your friend was a month to month tenant with no written lease.

First, some definitions:
The Statute of Frauds is the rule that states a land sale contract must be in writing.
Specific Performance is basically a court order requiring someone to complete a contract (sale)
Changing a position would be the payments made.



According to the second restatement of contracts:

A contract for the transfer of an interest in land may be specifically enforced notwithstanding failure to comply with the Statute of Frauds if it is established that the party seeking enforcement, in reasonable reliance on the contract and on the continuing assent of the party against whom enforcement is sought, has so changed his position that injustice can be avoided only by specific enforcement.

So, because your friend changed her position by making payments, the court may order the land to be transferred.


It appears that Ohio adopted this doctrine in 1951:

In an action for specific enforcement of an oral contract for the sale of land, equity intervenes to render the statute of frauds inoperative only when a failure to enforce the contract will result in fraud and injury. To entitle one claiming to have purchased land to enforce an oral contract for the conveyance thereof, he must, in reliance on the promise, have performed acts which changed his position to his prejudice. 37 Corpus Juris Secundum, Frauds, Statute of, § 252, pages 764, 766. Tier v. Singrey 154 Ohio St. 521, 526, 97 N.E.2d 20, 23 (.1951)

 

[divona2000]

...the seller has two unpaid mortgages against the property and will probably be foreclosed...

...because your friend changed her position by making payments, the court may order the land to be transferred...

Even if that was done, what about the banks holding the first and second mortgages? They're not going to just give the place up. A forclosure and sale will go through long before the renter/buyer gets this fought out in court.

 

[Mass_Shyster]

Even if that was done, what about the banks holding the first and second mortgages? They're not going to just give the place up. A forclosure and sale will go through long before the renter/buyer gets this fought out in court.

Are you suggesting she simply walk away?

My suggestion (get a lawyer) still stands.