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Court Rules on Petition to Sell Estate Property

A New York Probate Lawyer pursuant to SCPA Article 19, the executrix, the decedent’s sister, commenced this proceeding for an order allowing her to sell mortgaged real property allegedly belonging to the estate so that she may reimburse herself and another distibutee for various estate administration and other expenses. There was no appearance in opposition on the return date of process. One of the respondents, the former lender and mortgagee of the property, A, however, moves for an order excusing and vacating its default in answering and granting it leave to file late objections. Upon the grant of such leave, A also seeks summary judgment dismissing the petition interposed against it asserting, inter alia, that it is not the real party in interest.

A New York Will Lawyer said that on 22 November 2004, the decedent died leaving a will which was admitted to probate by a decree entered 23 December 2005, specifically devises certain real property in the Bronx to her three children, in equal shares as joint tenants with the right of survivorship. The executrix alleges that sometime after the decedent’s death, but prior to the issuance of letters testamentary, two of the three children recorded a deed to themselves of the real property which previously was held in the decedent’s name alone, and then reconveyed that realty so it was held solely in the name of one daughter, enabling her to borrow against and mortgage the realty. After that, the executrix commenced an action in the Supreme Court, Bronx County with Index No. 20710/2006 seeking, inter alia, to void the deed and cancel the mortgage, and she then commenced this proceeding based upon an executor’s deed she filed with the Bronx Registrar of Deeds and Office of the City Register.
The mortgage states that A is the lender and, for purposes of recording the mortgage, B is the mortgagee of record and is acting as nominee for Lender and Lender’s successors and assigns. The executrix contends, inter alia, that the mortgage is invalid because the daughter who gave it and obtained the loan from A did not have full title to the property. In addition to the three children and A, process was served on a title insurance company and B. Manhattan Probate Lawyers said that after defaulting on the initial return date of process, A served and filed its instant motion seeking to excuse that default and related relief, including summary judgment dismissing the petition against it. In support of its contention that it is not the real party in interest, A annexes various documents to establish that it sold the loan to another entity. A also objects to the sale of the realty on various grounds.

Bronx Probate Attorneys said the fact that the estate has unpaid administration expenses and that without the sale of the real property the decedent did not own sufficient assets to pay the administration expenses as set forth in the petition is undisputed. As a consequence, the application may be granted at this time to the limited extent of authorizing the petitioner to sell the real property free of the interests of the devisees under the decedent’s will in accordance with SCPA 1902[1]. However, the issue of whether the deed from one of the devisees to the other and the subsequent mortgage on the property can be voided or, instead, results in a conveyance or encumbrance limited to the grantor’s or mortgagor’s interest in the real property are the same issues that have been raised in the pending supreme court action which was commenced prior to this proceeding

Since letters testamentary issued to the petitioner on 23 December 2005 and the instant petition was not filed until 28 June 2007, more than 18 months from the date when letters testamentary were issued, the rights under any mortgage acquired prior to the date that this proceeding was commenced cannot be affected by a sale pursuant to Article 19 of SCPA 1903[1].

The application of A for leave to file late objections, alleging, inter alia, that this proceeding should be dismissed against it on the ground that it is not the real party in interest due to its assignment of its interest in the mortgage, is rendered academic by the court’s holding that the rights of the present mortgage holder, whoever that might be, are not affected by the authorization granted to the fiduciary to sell the property free of the devisees’ interests.

The court recognizes that the limited relief granted herein is of little or no practical value to the petitioner because it is unlikely that anyone will purchase the property without resolving the rights of the mortgagee. Noteworthy is the fact that it does not appear that any of the interested parties desire to reside at the real property, and that, whenever the property is ultimately sold, the mortgagee will not be entitled to a greater interest in the sale proceeds than that of the mortgagor. Moreover, it does not appear that any of the parties would profit from delaying the sale until the conclusion of the pending Supreme Court action, a newly commenced partition or other action, because it would not be surprising if unpaid taxes or other liens and expenses mount during this period.

The court, therefore, directs that it would appear to be in the best interests of all of the parties to expeditiously sell the real property free of the mortgage and to hold the proceeds in escrow pending a determination of the interests of the respective parties.

If your family is faced with probate issues like the one mentioned above, Stephen Bilkis & Associates would gladly work with Bronx County Probate Lawyers and Bronx County Estate Administration Lawyers to alleviate your burden in solving your case. With our track record involving probate cases, you are in good hands. Please feel free to call our toll free number or visit our place of business.

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