Ah, those "equitable liens"

Equitable liens in New Jersey

An equitable lien is a court-established lien given to protect a third party from being deprived of its rights in real estate.  There have been many cases litigated in New Jersey over the years establishing or denying the imposition of an equitable lien.

The latest case is Recon Realty v. Marjac, et al.  In this case a real estate broker sought to impose a lien on the funds received by a mortgagee in a short sale transaction.  

The appellate court outlined the grounds for a finding of an equitable lien this way:

"An equitable lien is a right of special nature in a fund and constitutes a charge or encumbrance upon the fund" to prevent unjust enrichment. VRG Corp. v. GKN Realty Corp., 135 N.J. 539, 546 (1994). "For an equitable lien to arise there must be debt owing from one person to another, specific property to which the debt attaches, and an intent, expressed or implied, that the property will serve as security for the payment of the debt." Highland Lakes Country Club & Community Ass'n v. Franzino, 186 N.J. 99, 112-13 (2006) (quotations omitted). "Where one promises to pay for services rendered out of a fund created in whole or in part by the efforts of the promisee, a lien in favor of the promisee will attach to the fund when it comes into existence." In re Hoffman, 63 N.J. 69, 77 (1973). Additionally, an equitable lien can be imposed, if based on the "the dictates of equity and conscience . . . a contract of reimbursement could be implied at law." VRG Corp., 135 N.J. at 546.  

At the end of the day, the broker lost its claim for an equitable lien..

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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Real estate title after the parents die; don't believe everything you read on the Internet

The road to hell is paved with good intentions, but sometimes it's just bad advice

So, a recent consumer help column discusses the ownership of real estate after a parent dies. Here's the lede:

What happens if I don’t change a deed after a parent dies?

---

Q. In the situation of parents who transfer property to a child and the child’s spouse, and after a while, both parents pass away, what is the obligation or responsibility of the child and spouse in notifying the authorities — the county register of deeds and the city or township tax assessor — about the death, in order for the property tax records to properly show ownership of the property? And when this has not been done for more than three years after the death of the last surviving parent, are there consequences?
— Beneficiary

[Our comments are in brackets]

A. We’re sorry to hear about the loss of your parents.

The New Jersey Recording Act requires that deeds must be recorded, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park. [Yes, they do, but only when a deed exists.  This statement implies that in this situation a deed MUST be recorded.]

She said the failure to record a deed will make it impossible to sell the property or obtain a mortgage or a line of credit. [Not true.  Title to real estate devolves upon the death of an owner in accordance with a state's inheritance laws and how ownership is held.  For instance, upon the death of a joint tenant, title automatically vests in the co-owner without need for estate administration. If property is devised to a third party, title to the property becomes vested in the beneficiary upon probate of the Will.] Plus, judgments or liens against the prior owners could attach to the property. [These judgment or liens are already attached to the property.]

“The transfer should be exempt from New Jersey Realty Transfer fees because the conveyance was from a parent to a child,” Whitenack said. [A deed from the estate to a beneficiary is exempt from RTF on that basis.] “However, if the parents were wrongfully or fraudulently receiving a tax credit or deduction on the residence on property they no longer owned, there could be serious consequences affecting the estate of the parents.” {They lost us on this one.]

It’s time to get the paperwork done.

[Getting the title into the name of the beneficiary is a good idea but I wouldn't lose sleep over it. A letter to the tax assessor with a copy of owner's death certificate asking that the assessment be changed and bills sent to a new address should be sufficient to avoid errant tax bills.]

[We're glad to answer any questions you might have.  Call us.]

This story was originally published on July 26, 2021.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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New Home Purchase? Do not forget the home inspection

Home inspection for your new home purchase- Waive at your risk?

Buying a home at this time can be frustrating as potential buyers compete with each other to make the deal.  Presenting an offer that is "all cash," that is not contingent on obtaining a mortgage is one tool in the homebuyer's tool kit.  Another is waiving the home inspection.

There have been a series of articles on the wisdom of waiving the home inspection.

Thinking of Skipping a Home Inspection? Think Again and points out the pitfalls

“I would never waive it,” says Samantha Eisenberg, a Compass real estate broker who works in the Boston suburbs. “A home purchase is probably the biggest purchase of your entire life and we spend more time picking out a sweater…If I buy clothes online, I try it on and see how it looks. A house we go through in 30 minutes and you’re waiving inspections (over) something that costs over a million dollars.”

A full home inspection can unearth everything from structural issues, roof problems, or faulty electricity and plumbing. If the thought of dealing with any of these gives you a major headache, you’re better off following the recommendation of your realtor.

How to waive a home inspection contingency without getting burned

The home inspection contingency, meanwhile, is a bit of legalese that gives a buyer a way out of a deal.

In today’s super-competitive market, buyers are making their offers stand out by agreeing to ignore minor issues. Rather than skipping inspection contingencies entirely, savvy bidders are modifying the language in their offers, says Katie Severance, an agent at Brown Harris Stevens in Upper Montclair, New Jersey.

For instance, you might still conduct an inspection but promise the seller that you’ll overlook any single repair valued at less than $500, or that you’re scouting for only major issues such as mold, radon or a faulty foundation.

“The buyer hopes to send the message to the seller that they’re not going to nickel and dime them,” says Severance, author of “The Brilliant Home Buyer: 101 Tips for Buying a Home in the New Economy.”

Homebuyers should, in our humble opinion, keep something in mind when they read the home inspection report.  If you are buying a house that is 50 years old and the inspector says "the hot water heater is nearing the end of its useful life" or "the electric system should be upgraded" or "the roof is original," those items are not defects in the house.  

Happy househunting.

  

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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 New Jersey Riparian and Tideland Claims

What are tideland or riparian claims?

 In New Jersey, “riparian rights and claims” are lands subject to ownership by the State of New Jersey because the property lies in areas that are presently or formerly flowed by tidal waters. See, the New Jersey Tidelands Act in N.J.S.A. 12:3.  In New Jersey, tideland claims and are found in 17 of its 21 counties.

 What are tidelands and who owns them?

 Tidelands, also known as riparian lands, are all lands that are currently and formerly flowed by the mean high tide of a natural waterway. For example, Ocean County’s Barnegat Bay, a natural tidal body of water, is tidelands. But just because there is no water flowing today, it may surprise you that tidelands do not have to be wet today.  For instance, in Newark, many, many years ago there was a small tidal stream called New Creek that was filled in and built upon.  The same applies to areas of Hoboken, New Jersey built up long ago.  In fact, New Jersey had an extensive network of tidelands, both big and small, that you would never know by looking at them today.

As sovereign, the State of New Jersey claims ownership of these tidelands and holds them “in trust” for its citizens. The management and disposition of tidelands is overseen by the Tidelands Resource Council and the New Jersey Department of Environmental Protection (the DEP.)

 I’m buying a home on a bay and there’s a dock extending over the water.  Do I have a problem?

 Unless the title to your property that is under water is based on a riparian grant, lease of license (something Vested Land Services LLC checks for when you buy your property) you must obtain permission from the State via a Riparian Grant, Tidelands License or Lease.

 What is a Riparian Grant?

 A Riparian Grant is a deed from the State of New Jersey for the sale of its interest in that portion of your property that was or is now flowed by the mean high tide. As mentioned above, all property that was formerly tidal is State‐owned property despite the fact that it has been filled in and the former waterway is no longer evident.

 When you purchase a property, Vested Land Services LLC checks its title to determine if the property is or ever was subject to a state tideland claim.  If we find one and there is no record of a riparian grant, it’s a title issue that has to be resolved.

 What is a tidelands lease?

 A Tidelands Lease is a long term rental agreement from the State of New Jersey for the use of its tidelands. It is our understanding that the rent is negotiable depending on market conditions.

What is a tidelands license?

A Tidelands License is a short term rental agreement between the State of New Jersey and the property owner for the use of its tidelands. Per regulation, currently flowed tidelands that have not been previously sold by the State may only be leased.  They are renewable.

 In our years of experience, we have seen many Riparian Licenses. The are obtained in connection with the construction or use of docks, piers, mooring piles, floating docks, and boat lifts, that are constructed or will be constructed on the waterfront.

 Summary

 As with all things related to your home or investment property, the state of its title is one of the important areas that must be considered before you buy.  Vested Land Services LLC and its staff are here to help.  Let us know if we can.

 Disclaimer:

The information included is designed for informational purposes only. It is not legal, tax, financial or any other sort of advice, nor is it a substitute for such advice. The information may not apply to your specific situation. We have tried to make sure the information is accurate, but it could be outdated or even inaccurate in parts. It is the reader’s responsibility to comply with any applicable local, state, or federal regulations. Vested Land Services LLC and their employees make no warranties about the information nor guarantee of results, and they assume no liability in connection with the information provided.

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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What is a tenancy by the entirety

What is a tenancy by the entirety?

The tenancy by the entirety is a unique estate that may be held only by a married couple or, in New Jersey as of February 19, 2007, civil union partners.  (For simplicity’s sake, we’ll include civil union partners as a married couple in the below discussion.)

 According to our colleague and noted title professional Lawrence Fineberg, Esq. “Its origin is said to be biblical in nature.  At common law, consistent with the biblical statement quoted below, a husband and wife were viewed as a single entity. Although this is no longer the case, some of the incidents of tenancy by the entirety are vestigial remnants of this conception.” (Citations omitted.)

 Unlike other forms of co-tenancy, a tenancy by the entirety may have only two co-tenants, who are married to each other.

 A deed or a testamentary devise to a married couple is presumed to create a tenancy by the entirety, in the absence of contrary wording in the deed or will. So, a deed from a spouse conveying the real estate owned in her name to herself and her spouse, vests title in them as tenants by the entirety.

 What if the couple is not in fact married at the time of the deed? In that situation, they will hold as tenants in common, even if they eventually marry. Likewise, say an engaged couple takes title to a home as tenants in common or as joint tenants, a tenancy by the entirety is not automatically created by their subsequent marriage.  So, if they wish to hold title as tenants by the entirety, a new deed must be created which vests title in them as such.

 But, if the parties are in fact married to each other at the time of the deed, a tenancy by the entirety will be created (in the absence of contrary language), even if their marital status is not recited in the deed.

 In New Jersey, as mentioned above, civil union partners are also presumed to acquire title as tenants by the entirety. However, domestic partners may not do so.

 Where title to realty is held by spouses married to each other as tenants by the entirety, the death of one spouse results in the vesting of the entire interest in the survivor automatically.

 The entry of a judgment of divorce automatically destroys the tenancy by the entirety, so that former spouses hold title as tenants in common.

 A tenancy by the entirety may not be terminated by the unilateral act of either spouse,  If one spouse attempts to convey to a stranger, however, the grantee succeeds to the interest of the grantor-spouse, including that spouse’s right of survivorship. The same result is reached where a judgment creditor or foreclosing mortgagee of only one spouse attempts to enforce its lien against property held by the entirety.

 Portions of the above have been adapted from Fineberg, N.J. Title Practice (NJLTI, 5th Ed. 2021).

 Disclaimer: The information included is designed for informational purposes only. It is not legal, tax, financial or any other sort of advice, nor is it a substitute for such advice. The information may not apply to your specific situation. We have tried to make sure the information is accurate, but it could be outdated or even inaccurate in parts. It is the reader’s responsibility to comply with any applicable local, state, or federal regulations. Vested Land Services LLC and their employees make no warranties about the information nor guarantee of results, and they assume no liability in connection with the information provided.

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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