Framer35, you wrote: “However it does say that the borrower must remain a beneficiary, so a trust for the purposes of transfer is in violation of the DOS.” Exactly right and that’s why the NARS land trust doesn’t trigger the DOS.
The Trustee holds legal and equitable title to the property as is allowed under Garn-St. Germain. Placing your own property into a trust and naming a remainder agent is not considered a transfer of title.
In a NARS Land Trust the seller ALWAYS retains his Beneficiary status until his loan has been fully paid off and he has been paid all his agreed upon equity. He doesn’t transfer title to the property until this occurs so his property is NEVER at risk.
This is one item that distinguishes itself from other trusts and a reason I have never heard of a seller complaining – ever. NARS encourages its members to protect most or all of the Seller’s equity in their transactions.
The Illinois land trust was the basis for Bill Gatten’s NARSland trust. He married the land trust with the triple net lease.
The part about the exception for family members I didn’t write. I quoted it from the title company’s website. Thanks for your question.
Your NARS trust sounds interesting. However I can not understand how it works exactly.
It sounds like you are leasing it from a trust. If you are leasing it for more than 3 years that would trigger the DOS. If you option it at all, that triggers the DOS even if less than 3 years. You can’t in turn sell it, or enter into a contract to sell that would trigger the DOS and be fraud if you do not have the option to sell. You don’t take title to it. you can’t take the tax benefits from it like you would if you had title to it. And the owner/seller not you the investor remains in control. Where and when do you profit.
Mind you “Triggering the DOS” may not be the right term.
Your quote was from a Title Company, Mine was from the Garn-St. Germain Act of 1982. It may have been amended since to say that even family transfers do trigger like you quote the title company as saying. But the issue had come up with a re-finance that my Mother was doing and the Loan Officer that came to her house for the closing explained to me and to her that it did not violate the DOS despite her trust as the transfer was in the family.
If you have some amendment to the act it would be worth posting.
But good to hear that someone came up with a workaround albeit a convoluted one. I like the KISS formula for operating if I can. Not always possible when lawyers get involved.
but Gary Email me directly and if you can explain to me how I as an investor can benefit if I was to use the NARSTrust. Not saying I’ll use it, I just like to have a handle on what I do and not operate blind.
You wrote: It sounds like you are leasing it from a trust. If you are leasing it for more than 3 years that would trigger the DOS. (The lease is for 2 yrs, 11 months, 29 days)
If you option it at all, that triggers the DOS even if less than 3 years. (NO OPTION IN THE NARS TRUST)
The rest of your statements are incorrect and you appear confused. Peace.