non-existant corporate owners

General Real Estate Investing
1

I’ve been doing some research in the online county clerk’s database on an area in which I want to buy some property. I’ve come across a number of mysterious owners.

The first mystery is a corporation, according to the deed registered in Nevada. However, Nevada has never heard of them. Neither has any other state, nor has any corporation with that name or similar EVER existed. The mailing address for this non-existent corp. is a maildrop, which has also never heard of them nor is the box number even valid. The building itself is empty, and has been for several years since a bank foreclosed. Why would someone pay for a house and purposely put it under a false name, knowing they now have no way of proving ownership? What is the legal status of this property? If I were to sue them for having a dangerous building, could I gain posession of this property, as no one could legally defend the non-existant owner and I would win by default, and take the building as no other assets could be found of this “john doe”?

Another property is owned by a corporation that was dissolved in 1998, without any recorded deed transferring ownership to another person. Is this property in limbo as well?

A third building was owned by a corporation that announced a merger with another, but never completed it as far as the Secretary of State is concerned and the company’s registration was suspended because they didn’t pay their fees. Why are people so careless with their property? This company was an insurance agency, you’d think they’d know the value of proper paperwork.

What happens to these zombie properties? Do they simply become the property of whomever is paying property taxes on them?

2

People do funny things. First, you may of hit on one way to find the owners: Who is paying the property taxes? If no one is, then the liklihood that such a property will end up at a tax sale is high. Also, who signed the deed into the corporation? SOMEBODY did! Do the neighbors know anything? Getting someone with the legal ability to transfer the deed will be difficult, even if you find them. I’d be curious to see what a title company would require to insure!

If someone had a legitimate cause of action for damage incurred on the property, a default in the event of a lawsuit would be very likely. Fabricating a lawsuit would be likely illegal and certainly unethical.

Dissolving a corporation without changing deeds is not unheard of. Likewise, when companies go belly up, the niceties of legal paperwork are probably not in the forefront of the owners’ mind…of course, that sort of inattention may be what caused the problems to begin with. The true owners in 2nd & 3rd cases are probably much easier to track than in the first example, as it sounds like a real corporation existed, at least at some point in time. There may be opportunities for a dilligent tracker, particularly if they know how to remedy the title issues. Neither of the latter two properties are necessarily in limbo - they just have title issues. The first one may be a different story.

John Hyre

3

John Hyre sed:

First, you may of hit on one way to find the owners: Who is paying the property taxes? If no > one is, then the liklihood that such a property will end up at a tax sale is high. Also, who >signed the deed into the corporation? SOMEBODY did!

The title from the former owner (the forclosing bank) was signed to the non-existant corporation by an attorney in Dallas. But from what I can tell, he was only acting in the sellers behalf, I see no indication of acceptance by the non-existant corp.

Do the neighbors know anything? Getting someone with the legal ability to transfer the >deed will be difficult, even if you find them.

The neighbors I was able to talk to don’t know anything. In fact, they pointed out to me that
the building in question is in imminent danger of collapse. It is close to other structures, so it would be difficult to demolish properly. I am wondering if the mortgage company signed a
property to a non-existant corporation as a way of abandoning the property, leaving the
city to pull it down and avoiding lawsuits from anyone hurt by falling masonry.

I’d be curious to see what a title company would require to insure!

Well, I talked to one title insurance company. They balked straight away, giving a list of
qualifications that are impossible to fill. Most notable was the requirement of papers showing incorporation in Nevada before the date of the supposed sale. In other words, no way in hell would they insure it!

There may be opportunities for a dilligent tracker, particularly if they know how to remedy >the title issues. Neither of the latter two properties are necessarily in limbo - they just have >title issues.

Indeed! I have thought about taking up this line of work, as a sort of title salvage man.
At this time, however, I think the intricacies of this type of work are beyond me. I picked up a few law books from a stack left, on the sidewalk, discarded, most useful is probably “Property” by Dukeminier and Krier. With in increasing number of Deed Registries going online, such legal research may not have to cause my mildew allergies to act up!