My client wants to purchase a “HUD-owned” property, but he’s not sure how to fill out the owner portion of the contract. Any recommendations?
In our HUD closings, HUD has been pretty consistent that the information on the Cash Sale/Deed must match the information provided by the buyer on the HUD contract.
To briefly explain what takes place between HUD and the Title Attorney relative to preparation of the Cash Sale/Deed: for HUD-owned properties, a HUD representative sends to the Title Attorney a Cash Sale/Deed “form” that the Title Attorney is responsible to complete and return to the HUD representative for review. If there are any discrepancies between the final Cash Sale/Deed prepared by the Title Attorney and the HUD contract provided by the buyer, HUD will usually “kick back” the Cash Sale/Deed. Thus, it is important that the HUD contract and Cash Sale/Deed be consistent.
If the buyer wants the home to be in the name of a Corporation or an LLC, then the prospective buyer needs to identify the Corporation or LLC as the prospective buyer on the HUD contract.
Additionally, whenever a Corporation or LLC is purchasing property, it is always a good idea to disclose the person with authority to act on behalf of the Corporation or LLC and the instrument by which that person obtained his or her authority to act on behalf of the Corporation or LLC. So, this information should also be disclosed on the HUD contract.
If your client is married, then the marital status, the spouse’s name and whether the property will be separate property needs to be clarified on the HUD contract, as well.
By completely filling out the HUD contract on the front end, it will greatly assist the closing attorney at the time of sale to correctly prepare the Cash Sale/Deed and obtain approval of the Cash Sale/Deed and, thus, prevent undue delays.
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H.L. “Rye” Tuten, III, is a Title Attorney/Real Estate Closing Attorney and Owner of Tuten Title & Escrow, LLC. Formerly assigned by RICE Insurance to defend real estate agents throughout Acadiana, much of his more than nine years’ litigation experience is with real estate concerns.
The information contained herein is simply for informational purposes only and not intended to provide legal advice or create an attorney-client relationship.