Foreclosure on Home with Unpermited Work and Code Violation

[jwrightis]

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

I re did my stairs and replaced wood spindles with wrought iron and replaced the rails with new rails from Home Depot because I stained them a different color than the original. I did not space them to code as I didn't have any small children and I liked how they looked farther apart and I didn't get a permit because, at the time, I had no idea that replacing spindles needed one. Today I found out that if I were to sell my home, I'd have to disclose that it wasn't permitted and the buyer could decide to purchase or not, or have me bring it up to code, etc. However, I'm not selling. I'm foreclosing on my home and walking away in a bankruptcy filed after the foreclosure commences because I have HOA dues that I want to discharge.

If I did the work, and it was unpermitted and not to code, can I receive any legal consequences for this given that it's going to be taken in foreclosure and not sold by me? I would think once the bank sells it, the new buyer would be liable to bring it up to code. Can the bank make me bring it up to code?

 

[quincy]

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

I re did my stairs and replaced wood spindles with wrought iron and replaced the rails with new rails from Home Depot because I stained them a different color than the original. I did not space them to code as I didn't have any small children and I liked how they looked farther apart and I didn't get a permit because, at the time, I had no idea that replacing spindles needed one. Today I found out that if I were to sell my home, I'd have to disclose that it wasn't permitted and the buyer could decide to purchase or not, or have me bring it up to code, etc. However, I'm not selling. I'm foreclosing on my home and walking away in a bankruptcy filed after the foreclosure commences because I have HOA dues that I want to discharge.

If I did the work, and it was unpermitted and not to code, can I receive any legal consequences for this given that it's going to be taken in foreclosure and not sold by me? I would think once the bank sells it, the new buyer would be liable to bring it up to code. Can the bank make me bring it up to code?

If the bank has not been able to make you pay what you owe on your mortgage, it seems unlikely that they could make you pay to bring the house up to code. However, if there is a foreclosure sale and the sales price does not cover the balance owing on the loan, the bank can file suit to obtain a deficiency judgment.

It is generally to a homeowner's advantage to preserve the condition of their home, even in foreclosure situations.

Could you please try to keep all of your bankruptcy-related questions to one thread from here on out, jwrightis. It helps the forum members to better help you. Thanks.


Other thread: https://forum.freeadvice.com/consumer-bankruptcy-2/quitting-job-chapter-7-bankruptcy-contract-deeds-617399.html

 

[jwrightis]

If the bank has not been able to make you pay what you owe on your mortgage, it seems unlikely that they could make you pay to bring the house up to code. However, if there is a foreclosure sale and the sales price does not cover the balance owing on the loan, the bank can file suit to obtain a deficiency judgment.

It is generally to a homeowner's advantage to preserve the condition of their home, even in foreclosure situations.

Could you please try to keep all of your bankruptcy-related questions to one thread from here on out, jwrightis. It helps the forum members to better help you. Thanks.


Other thread: https://forum.freeadvice.com/consumer-bankruptcy-2/quitting-job-chapter-7-bankruptcy-contract-deeds-617399.html

I see. I thought since this is about work done unpermitted and foreclosure, that it wouldn't be suitable for a bankruptcy thread since this is the Mortgages, Refi and Foreclosure section. Thanks. Even if I didn't take Bankruptcy, I'd still have to deal with a foreclosure and the work being without a permit. My bankruptcy would take care of any deficiency since it's a chapter 7, so I am not really worried about that aspect of things.

 

[FlyingRon]

Don't worry about this. If you're not going to contest the foreclosure, nobody is going to get worked up over a handrail. While deficiency judgements are technically possible, it's not automatic that they occur:

1. The lender typically bids what they have in the property at the foreclosure sale. A deficiency only exists if the foreclosure auction doesn't clear the amounts owed.
2. The deficiency judgement in Kentucky takes additional legal action over the foreclosure. You have to be served and another court case heard.

If this was the only issue with your bankruptcy it might be a cause for concern, but since you have apparent substantial other debts, I wouldn't get worked up over it (getting the whole picture is why we INSIST you not spread the details of your life around on mutliple threads). While it's handy to start a thread in the most appropriate forum, most have enough overlap that one will get answers to the ancillary issues.

 

[jwrightis]

Don't worry about this. If you're not going to contest the foreclosure, nobody is going to get worked up over a handrail. While deficiency judgements are technically possible, it's not automatic that they occur:

1. The lender typically bids what they have in the property at the foreclosure sale. A deficiency only exists if the foreclosure auction doesn't clear the amounts owed.
2. The deficiency judgement in Kentucky takes additional legal action over the foreclosure. You have to be served and another court case heard.

If this was the only issue with your bankruptcy it might be a cause for concern, but since you have apparent substantial other debts, I wouldn't get worked up over it (getting the whole picture is why we INSIST you not spread the details of your life around on mutliple threads). While it's handy to start a thread in the most appropriate forum, most have enough overlap that one will get answers to the ancillary issues.

Thanks, but nobody actually answered my question in the bankruptcy forum. The question was essentially that I have no choice but I must enter either a rent to own or a contract for deed with my dad for a house and for reasons I don't want to get into here, neither of us can/want to wait for my bankruptcy discharge which could be a year or so off...because if I don't owe any deficiency on this house, I'm not filing bankruptcy. He is going to sell it to me for a lot less than what it is worth, and the homestead exemption, even federal, won't cover it all. Therefore, would a trustee consider that "equity" even though the owner is my dad, and I have no right per the contract to sell the home while I'm paying it off, I don't pay the taxes or insurance on it and I can't get my money back that I have paid in? How would a trustee look at that? Oh, my payoff is 12 years, with no balloon payment. It's just a straight 12 year contract to pay monthly.

 

[quincy]

Thanks, but nobody actually answered my question in the bankruptcy forum. The question was essentially that I have no choice but I must enter either a rent to own or a contract for deed with my dad for a house and for reasons I don't want to get into here, neither of us can/want to wait for my bankruptcy discharge which could be a year or so off...because if I don't owe any deficiency on this house, I'm not filing bankruptcy. He is going to sell it to me for a lot less than what it is worth, and the homestead exemption, even federal, won't cover it all. Therefore, would a trustee consider that "equity" even though the owner is my dad, and I have no right per the contract to sell the home while I'm paying it off, I don't pay the taxes or insurance on it and I can't get my money back that I have paid in? How would a trustee look at that? Oh, my payoff is 12 years, with no balloon payment. It's just a straight 12 year contract to pay monthly.

If there are reasons you cannot get into here, you will want to get into these reasons with an attorney in your area.

If your father owns the home you currently reside in, your father has some decisions he has to make on the house.

If you are planning to purchase the house from your father, or you are in the process of purchasing it from your father, and you cannot afford to make the necessary payments because of all of your outstanding debts, and your intention is to eventually file for bankruptcy, you need advice far greater than what can be offered you on a forum. You need a personal review of your financial situation and we cannot do personal reviews on this forum.

Good luck, jwrightis. And, please, keep all of the rest of your questions to your bankruptcy thread. Thanks.