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NFT: Any lawyers on here? I have a legal question

LawrenceTaylor56 : 5/21/2019 10:46 am
I'll throw in a little backstory.

Year 2007

Farmer owns 5 parcels of land. On one parcel of land he has a few barns and a 2 bedroom house. He leases this out to his sister who only uses the house. Under the lease agreement, upon death of the owner the sister has an option to buy the land and all buildings for $1. (There is no time frame in which she can exercise the option listed on the lease agreement)

Year 2018

Farmer wants a new barn. He gets a loan out against two parcels of land he owns, one being the one his sister currently resides on, the other in which him and his wife live on.

Year 2019

Farmer unexpectedly passes. Farmers wife now inherits the 5 parcels of land and remaining properties. She now owes the bank the remaining loan for barn he built in 2018. Again, the lien is against the land in which she lives on, and the land her sister-in-law lives on.

Questions:

Is the sister still able to buy the property for $1 if there is a lien against it? If so, does she also take on the debt of the lien? And this question might vary from state to state (PA), how long is she able to exercise her option to buy-in?
not a lawyer  
Chip : 5/21/2019 11:10 am : link
but Yes and Yes. She buys the property for a dollar and assumes the debt.
Many times a lease  
pjcas18 : 5/21/2019 11:14 am : link
will have a clause that a new owner of the property can terminate the lease upon the death or sale from prior owner. might want to see if that's the case here.

Also the sister's lease of the property has to have an end date. It could be something like 99 year or n years renewable at initial terms, but there has to be an end date to that lease.

both of those things could have an impact.
I am not a lawyer barred in Pennsylvania  
Mike in NY : 5/21/2019 11:16 am : link
Does the option to purchase reference being subject to any liens against the property? Some attorneys will take a "belt and suspenders" approach and include it, others may not. I can't comment on whether Pennsylvania law will automatically assume that it is subject to the liens absent express language.
I'm not a lawyer,  
fivehead : 5/21/2019 11:16 am : link
but I suspect that the bank and Government will fight over who gets to steal the farmer's schit.
RE: Many times a lease  
LawrenceTaylor56 : 5/21/2019 11:24 am : link
In comment 14450893 pjcas18 said:
Quote:
will have a clause that a new owner of the property can terminate the lease upon the death or sale from prior owner. might want to see if that's the case here.


Only thing written in the lease is that upon his death the Lessee has the option to buy the land for $1. No one can act on his behalf.


Quote:

Also the sister's lease of the property has to have an end date. It could be something like 99 year or n years renewable at initial terms, but there has to be an end date to that lease.


The way the lease goes it says in the contract.. " lease commences on this date, June 5th, 2007, and continuing as long as Lessee wants to lease the Premises according to the terms of this agreement."



RE: I am not a lawyer barred in Pennsylvania  
LawrenceTaylor56 : 5/21/2019 11:25 am : link
In comment 14450897 Mike in NY said:
Quote:
Does the option to purchase reference being subject to any liens against the property? Some attorneys will take a "belt and suspenders" approach and include it, others may not. I can't comment on whether Pennsylvania law will automatically assume that it is subject to the liens absent express language.


Nothing is mentioned about an liens against the property. At the time of the of the lease everything was free and clear. He only took out a loan against it 2 years ago.
If the bank has a lien on the property  
BillT : 5/21/2019 11:44 am : link
that lien remains on the property. As to whether the agreement to purchase the property for $1 survives if the title to property passes to the wife that would depend on the language of that agreement. If it isn't specified then either the parties can agree to a disposition or sue each other over it.
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