How long must a borrower be in default before a foreclosure can begin?
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How long must a borrower be in default before a foreclosure can begin?
I sold my restaurant with owner financing. The mortgage was transferred to the new owner and he had 3 years to pay $750 a month with a balloon at end. A year and half has past with him paying on time. We received a call last night that said he needs us to approve him to be a month late on his mortgage payment and my husband told him he needed to stick with the contract. A comment was made by the new owner that because he owed taxes, etc. he may have to let the restaurant go. So at this point, he is 5 days late. Do we send him a notarized letter of his delinquency? How many times do we do this before we foreclose and take back the property?
Asked on July 9, 2011 under Real Estate Law, Florida
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
I am assuming that there was a purchase agreement and and that it was properly prepared here and hopefully filed. It should have within it a provision that deals with a default, notice and curing a default. Follow the procedures that were agreed upon in the contract. If there are no procedures listed, then I would consider taking it all to an attorney in your area to review and to guide you. Be aware, though, that if you accept a payment at any time once you formally begin the process to foreclose it could render the proceeding moot. You would then have to start all over again should he default. Listen, these are tough times for everyone. Do you really want to take back the restaurant and try and sell it again? You may want to consider renegotiating the loan for a longer term and keep the buyer viable. Good luck.
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