A large residential property stands vacant, leaving a mortgage in default and unpaid back taxes. The property is worth more than the accumulated mortgage deficiency and unpaid taxes, so the solution seems simple: sell the property and pay the taxes and mortgage arrearage out of the proceeds. The seeming simplicity of this solution can run into trouble when the property is a historic mansion in Chestnut Hill and any sale can entail a number of real estate disputes.
Greylock is a Jacobean mansion in Chestnut Hill that was built in 1909 as a retirement home for a steel magnate. After serving as offices for a non-profit organization, the house has stood vacant for several years. Now, the holder of a mortgage on the estate wants to recoup the unpaid amount of the loan and to pay off back taxes by selling the property. Accumulated taxes are approximately $90,000, and but the mortgage deficiency is undisclosed. Other parties have filed liens against the property that must also be paid. The Office of Property Assessment says the property has a fair market value of $2,340,800. At the request of the mortgage holder, a sheriff’s sale of the property has been set for Nov. 1, 2016.
The sale is, however, complicated by the fact that the Chestnut Hill Historical Association (“CHHS”) holds two easements on the property that might restrict future use of the property by a purchaser. One easement covers the grounds of the estate, and the second preserves the mansion’s exterior. No changes can be made to the grounds or the exterior without the approval of the Historical Society. The CHHS has said publicly that it is willing to work with potential buyers to find a solution that serves both preservation interests and potential developments.
In cases where the market value of the property far exceeds the amount of past taxes and the mortgage balance, the holder of the mortgage can usually negotiate a “straight sale” at a price that will yield enough cash to retire all liens, taxes, and mortgages. Working through the details of such a sale and the property disputes that may be involved, however, can require the assistance of an experienced real estate lawyer. A knowledgeable lawyer can identify the various interests that must be satisfied and the best way to satisfy these interests.
Source: Philadelphia Magazine, “Greylock Estate Up For Sheriff’s Sale,” Sandy Smith, Aug. 25, 2016