[WSBARP] Partition of upside-down property - 3 questions

[Eric Nelsen]

That's a possibility but we're exploring other options. Even if that happens, we would still need to address the inequality of past contributions between the co-tenants, and need to find the best vehicle for that. A simple separate action for contribution is not preferable for various reasons.

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA  98101-2837
phone 206-625-0092
fax 206-625-9040



From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Roger Hawkes
Sent: Monday, December 22, 2014 2:16 PM
To: WSBA Real Property Listserv
Subject: Re: [WSBARP] Partition of upside-down property - 3 questions

Persuading the mortgage holder to nonjudicially foreclose would be best; but not happening?

Roger Hawkes, WSBA # 5173
19909 Ballinger Way NE
Shoreline, WA 98155
www.hawkeslawfirm.com<http://www.hawkeslawfirm.com>
206 367 5000
Fax is 206 367 4005

From: Eric Nelsen [mailto:Eric at sayrelawoffices.com]
Sent: Monday, December 22, 2014 1:29 PM
To: WSBA Real Property listserve (wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>)
Subject: [WSBARP] Partition of upside-down property - 3 questions

Co-tenants have a parcel that probably won't sell for enough to pay off the mortgage. Co-tenants disagree on what to do so the client is contemplating (well, I am contemplating on behalf of client) whether partition could help. Three questions:

1. It seems to me that once the property sells at auction, proceeds will go to pay the mortgage, which won't be fully satisfied. But the buyer will take free and clear of the mortgage, correct? So lender is left with suit for a personal judgment as only recourse on the loan. (I know the practical disadvantages for the client; I'm just thinking about the strict legal effects.)

2. Say the client pays in some amount, to take care of the excess mortgage balance at the time of sale, and avoids that problem. Would that payment be justification for a compensatory judgment against the other co-tenant under RCW 7.52.440<http://app.leg.wa.gov/rcw/default.aspx?cite=7.52&full=true#7.52.440> (the owelty-for-unequal-partition statute)?

3. Client also has paid more on the property expenses in the past, so in an accounting upon the partition, client should receive about $30,000 more than the co-tenant. But there's no equity to divide--so does client get a judgment against the co-tenant under RCW 7.52.440? Or does the accounting action under a partition only allow for adjusting division of net proceeds?

Sincerely,

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA  98101-2837
phone 206-625-0092
fax 206-625-9040

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