Selling and Closing on Property in Land Trust

General Real Estate Investing
1

I have called several title companies in Houston asking questions about closing a property in a land trust. Most of them don’t have a clue what I’m asking and one title agent put me on hold and never came back to the phone when he could not answer a question. However, I FINALLY talked with someone who seemed to know a lot about them.

I asked her if the trustee closes on the property with the buyers, whose name will be on the proceeds check. She stated that if the property is named “Jenny 123 Land Trust” then the proceeds check will be made out to the name on the trust. Well this seems to create a problem when trying to cash a check made out to the “Jenny 123 Land Trust”. How am I supposed to cash it? I asked her if they could make the check out to the beneficiary of the trust and she said probably not.

Does anyone who is more familiar and has closed on properties in land trusts know if the proceeds can be made out to the beneficiary? I have a book on Land Trusts and it states that the trustee can direct the title company to make the check out to the beneficiary. Also, please list title companies that you have worked with.

Thanks.

2

Jaye,

I have been buying and selling properties with trusts for several years and have never had any problems with either closing the deals or depositing checks. I have not, however, tried cashing them. I simply deposit them into the appropriate bank account.

If your trust agreement states that the trustee can direct the escrow officer as to whom to direct the proceeds, maybe you should take the trust agreement to them before the closing and show it to them. That should solve your problem.

You can expect problems with trusts and title companies, at least until you develop a relationship with one. Most title company employees are hourly employees and and such have a very limited viewpoint when it comes to anything other than the “normal way of doing business.”

Georgia requires that an attorney perform all closings. Maybe this is why it has been relatively simple for us here.