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An example of using an out-of-state closing company creating problems

Carolinian

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Most of the out of state t/s closing companies use laymen to prepare deeds, and seem to do so based on forms that are adequate in the states where they are located but may or may not be adequate elsewhere. Some claim to be ''attorney reviewed'' but again, this is invaribly an out of state attorney and the level of ''review'' may be questionable. The only exception I have seen is a new closing firm, PCS Holdings (which I have no connection to and do not know the owners) which says it uses licensed attorneys from the state in which the timeshare is located, and on its website limits the states in which it will do a closing which tells me they are probably truthful in that statement.

There are several extremely common errors on deeds filed by out of state closing companies in North Carolina which completely void deeds, even if they get recorded and recognized by ts management. I will not deal with those, but with another very common error that can cause problems even if the rest of the deed is proper and valid.

Many people want to hold a timeshare as a joint tenancy, the most important feature of which is that if one party dies, his/her interest automatically passes to the other joint tenant(s) by operation of law. Otherwise, in a tenacy in common, the interest of the deceased party passes under their will or if there is no will under the intestate succession statutes. Usually those seeking a joint tenancy status are husband and wife.

The out of state timeshare closing companies simply plug in the standard joint tenancy language applicable in their state. The kicker in North Carolina is that in a past century, the legislature adopted a statute that is still on the books that abolished joint tenancy in the state. So the language that the closing company uses does nothing, and their clients who think they have a joint tenancy really end up with a tenancy in common. A North Carolina attorney would have advised them that there are two ways they could have accomplished what they wanted. In the 19th century, the state Supreme Court did an end run around the legislature and ruled that one could still in effect create a joint tenancy by contract if they used very specific language in the deed (the closing company language doesn't comply) in spite of the statute. The other simpler thing to do is create a tenancy by the entirety, which can only be between a married couple but only takes insertion of one word (and, no it is not ''entirety'') in the deed, and has the same key attibutes as a joint tenancy.

What problems could having a tenancy in common present? If one party dies, and leaves no will, their interest passes under NC Intestate Succession laws to their spouse and children in undivided interests. To get the property back to the surviving spouse or to sell to a third person would require collecting the signatures of all of the children and their spouses on a deed. Yeah, a little extra work, you may say, but doable. However, if one of more of the children is under 18, they cannot execute a valid deed. To convey their interest will require a special proceeding before the Clerk of Superior Court and review by a Superior Court judge. That is going to create more hassles and costs, especially if said child, as likely in a t/s situation, lives outside the state.

Using an out of state closing company that does not use local attorneys for drawing legal documents is just asking for trouble down the road. This example also assumes the deeds prepared by the out-of-state closing company are valid in the first place, which from my own observation, they are often not. Often a call to the t/s manager can obtain a reference to a local attorney who will handle the transaction properly in full compliance with local law.
 
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Carolinian

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Buying title insurance in NC is going to require a title examination by an NC attorney.
 

Dave H

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Time Traveler:

Title insurance would protect you if the SELLER did not hold title right, however it will not protect you if the closing company does not deed the property right to you..... you would end up doing a corrective deed to fix it and there are some states that do not recognize corrective deeds, which would mean trying to find the old sellers somewhere down the road to resign it.

Carolinian:

South Carolina has even more specific language that has to be used and it is rather lenghty.....
 

tombo

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That is great to know. I currently have 2 North Carolina weeks deeded as joint tenants with rights of survivorship which were done through out of state closing companies. :annoyed:
 

Talent312

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There are some possible end-runs around having to hire an attorney or closing company in the state where the timeshare is located...
1. Find the websites of the county records office or some others in that state. They often have scanned images of actual deeds online which you can print for samples (use only locally prepared deeds).
2. Find the website for the state's bar association to see if they have a real property forms page, a real-property committee with its own forms page, or a continuing education (CLE) section with sets for sale.
3. Go to www.nolo.com, a laymans' legal website to see if it covers real-estate transactions for that state. Other websites also sell state-specific forms.
4. Some state-specific kits are available thru local bookstores, which might also be found on www.amazon.com

You can compare to the samples or forms to the deed that you have been offered or asked to sign. But, of course, none of the above can give you a legal opinion about effect of your deed. For that you would need to consult an attorney licensed in that state. Many offer no or low-fee initial consults.
 
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Dave*H

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Hmmmm, could this be a way out of a worthless timeshare? If you discover your title is defective, notify the resort that you in fact do not legally own the timeshare. Tell them they should figure out who does (possibly the person you bought it from) and send MF bills to them. I'm not actually advocating this as I think that you morally took on the responsibility when you bought it. Just wondering about the ramifications?
 

T_R_Oglodyte

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With TSes the spouse is better off with tenants in common anyway.
Why so? I see zero advantages of having title in common tenancy.
 

Dave H

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and would be stuck having to spend a lot of money in the state where the timeshare is to get probate done to get the other half or be stuck with all the MF bills and no way to sell.....
 

Dave H

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There are some possible end-runs around having to hire an attorney or closing company in the state where the timeshare is located...
1. Find the websites of the county records office or some others in that state. They often have scanned images of actual deeds online which you can print for samples (use only locally prepared deeds).
2. Find the website for the state's bar association to see if they have a real property forms page, a real-property committee with its own forms page, or a continuing education (CLE) section with sets for sale.
3. Go to www.nolo.com, a laymans' legal website to see if it covers real-estate transactions for that state. Other websites also sell state-specific forms.
4. Some state-specific kits are available thru local bookstores, which might also be found on www.amazon.com

You can compare to the samples or forms to the deed that you have been offered or asked to sign. But, of course, none of the above can give you a legal opinion about effect of your deed. For that you would need to consult an attorney licensed in that state. Many offer no or low-fee initial consults.

And that is all fine and well if the Deed you are going from was done right and you are doing a private party sale. What about all the ebay sales and others. I think that is the point that is being made
 

T_R_Oglodyte

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The most the suviving spouse could get stuck for is 1/2.
And the surviving spouse is then stuck with that half for ever and ever because no one is going to buy a one-half interest in a timeshare, particularly when the other half is owned by a collection of dead beat or unresponsive distant or estranged relatives of that spouse.

Or if the surviving spouse decides to pay only one-half the maintenance fees, the resort files a credit report against all owners of record (including the spouse) because in most jurisdictions the owners in a tenancy in common will be jointly and severally liable for paying fees and assessments. And since the surviving spouse can't sell half a timeshare interest (see above), the spouse is effectively stuck with the burden as much as if the spouse owned the whole thing.

*******

Giving your spouse a half-interst, tenancy in common isn't a blessing; it's a good way to continue to extract revenge from beyond the grave. I hope you love your spouse sufficiently to not pass on timeshare interest via tenancy in common.
 
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Talent312

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With TSes the spouse is better off with tenants in common anyway.
Not even close. This is about close to the silliest nonsense I've seen, and potentially could cloud their respective interest with liens as to render either spouse's 1/2 share worthless, or cost a surviving spouse thousands to fix in probate.
 
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tombo

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If you have power of attorney over all of your spouses assets after they are deceased, wouldn't you would simply sign for both people if you wanted to sell, and wouldn't you would own it outright once your spouse died? I am not a lawyer and have no clue why it would be a big problem. If it is a big problem, can't you both simply sign a peice of paper saying when I die my spouse owns all of my timeshares free and clear and get it witnessed?
 

laura1957

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If you have power of attorney over all of your spouses assets after they are deceased, wouldn't you would simply sign for both people if you wanted to sell, and wouldn't you would own it outright once your spouse died? I am not a lawyer and have no clue why it would be a big problem. If it is a big problem, can't you both simply sign a peice of paper saying when I die my spouse owns all of my timeshares free and clear and get it witnessed?

I think that the problem is - at death any power of attorney would no longer exist, all assets would belong to the estate. I don't see why the paper would not work - same with a will.

I remember when my father passed away my mother had to have all her children sign away rights to his car. Which was the way it was supposed to be anyway - the DMV has messed up the original paperwork!! She never bothered to have ALL of us sign - my sisters/brothers out of state never actually signed the paperwork, but those of us here in VA did - just to make it look legitimate :)
 

T_R_Oglodyte

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I don't see why the paper would not work - same with a will.
To have effect the paper must be a valid will. If it's not a valid will it has no effect in probate. People can't just produce some piece of paper purportedly executed by the deceased and use that as the basis for dividing up property in an estate.

If disposition isn't addressed in a will, the property is divided using the applicable rules of probate. And, of course, the estate gets charged for the services of the person selected by the court to handle probate.
 

Dave H

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If you have power of attorney over all of your spouses assets after they are deceased, wouldn't you would simply sign for both people if you wanted to sell, and wouldn't you would own it outright once your spouse died? I am not a lawyer and have no clue why it would be a big problem. If it is a big problem, can't you both simply sign a peice of paper saying when I die my spouse owns all of my timeshares free and clear and get it witnessed?
Ok, I hear this question all the time or at least part of it... Power of Attorney says I can do for you what you could do if you were in that spot to sign. If the person is dead, they could not be there to sign, therefore the power of attorney dies with them.

The next VALID power of attorney so to speak is what probate court gives and it is the Letters of Administration that appoints the Personal Representative or the Executor of the estate.

As far as a piece of paper, there is a document like that called a Will and those end up going to the probate court where the person died to be admitted. Once that estate is started, then an ancillary probate has to be done in the state or states where the timeshare(s) are located since the judge does not have jurisdiction in other states.

As far as taking a piece of paper saying it is mine free and clear, what would stop me from taking a piece of paper and saying you gave it to me and doing a good forgery on the signature... A court would then have to determine that really was valid...
 

e.bram

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Could a note from a PCC let the estate deduct the TS as a liability in computing the value of the estate for tax purposes.
 

Jennie

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Would the issues discussed above be taken care of w/o all the drama if the timeshare weeks were placed in a revocable living trust?
 

Dave H

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Could a note from a PCC let the estate deduct the TS as a liability in computing the value of the estate for tax purposes.
Good question for a tax person, I am not one, so I can not answer that one. I know there are a few on TUG maybe someone can answer that for you.
 

Dave H

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Would the issues discussed above be taken care of w/o all the drama if the timeshare weeks were placed in a revocable living trust?
Jeanie:

Holing title the right way usually handles it the best. Which was what this thread had started to be. The purpose of using closing services that are title licensed in the state the timeshare is in helps a great deal as well.

For the last one standing on a deed, a probate would have to be done to pass to the next generation if a deed is properly prepared. Since most companies are here in Florida, what works here does not always work in other states.

I own property in Florida and while we recognize holding property as Husband an Wife, South Carolina would not accept that as a way of holding title. Other states look at vesting in different ways.

I also hear, well the county recorded it, it must be good. The county does several things, they count pages, make sure they have the right $$ and put a recording stamp on it. Notice the missing step, they do not review it to see that it was properly prepared. They may look for the notary seal, they may make sure it has witnesses if they are needed, but they never pass judgment on if it is valid or not. That would be practicing law which they do not do.

Dave
 
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