Pending Judicial Foreclosure: Williamson County residential property

This isn’t going to turn into a real estate listing blog, but a number of you have asked me to keep you posted when I set interesting properties for sale.

Well, I’ve got an interesting one coming up for a Williamson County residential property in Concord Hunt (a very nice neighborhood) that will be sold on November 4, 2021.

The property is 9185 Monarch Court, Brentwood, Tennessee 37027, which Zillow says is worth $1,323,100. Who knows if that is accurate, but I can’t wait for an actual property owner to use the “Sell your home to Zillow” feature and we see if Zillow puts their money where their site is.

Per the Zillow information, the house was built in 2005, is in a phenomenal school district, and, based on my site visit, is vacant.

My bank client is the second priority lien holder. This is a “judicial foreclosure” because the third-priority lien holder is the United States government. As a result, any sale will be subject to the approval and confirmation of the Williamson County Chancery Court. Per my Sale Order, I’ll handle getting the sale approved.

The sale will occur on Thursday, November 4, 2021 at 11:00 o’clock a.m., at the property address.

Please let me know if you would like additional information on this property. I am the attorney for the creditor, and, as a result, I will be limited in what information and guidance that I can provide, but I am available to answer questions about the judicial foreclosure sale and the court approval process. Nothing in this post, of course, is designed to give you legal or factual advice about these sales.

As with all distressed real estate sales, buyer beware, and hire a lawyer.

Two More Sheriffs Sales set for August: Williamson County Commercial Properties

Last week, I wrote about a pending Sheriff’s Sale that I have scheduled for August 3, 2021 on 2137 Maricourt Street, Old Hickory, Tennessee.

A number of you reached out for information on any other sales that I may have pending. Here is information on two Williamson County commercial properties that will be sold at the end of August.

This will be via a Sheriff’s Sale set for August 31, 2021, at 12pm, at the Williamson County Judicial Center, 135 South 4th Avenue, Franklin.

(1) Approximately 2.43 acres, South Carothers Road, Franklin, Tennessee, Map/Parcel No. 079-082.00. This is a wooded lot, immediately next to the Soar Adventure Tower ropes course.

This is an image of the property available from the Williamson County GIS mapping site.

Per the Sale Order, bidding for this tract will start at $51,500.00. The 2020 tax appraisal for this property is $103,000.

(2) Approximately 4.29 acres, Royal Oaks Boulevard, Franklin, Tennessee Map/Parcel 079-023.00. This is also a wooded lot, right off Highway 96, on Royal Oaks Boulevard.

The neighboring property to lot was in the news recently, in the Nashville Post article titled “Franklin apartment property sells for $100M.” In case you’re not a subscriber, my interpretation of the article is that a Los Angeles-based real estate group bought the property immediately next this 4.29 acre lot for One Hundred Million Dollars.

This is an image of the property available from the Williamson County GIS mapping site.

I am not suggesting that this property is worth $100,000,000 (or anywhere close to that number), but, per the Court Order, the opening bid will be $100,000.

Please let me know if you would like additional information on either of these two properties. I am the attorney for the creditor, and, as a result, I will be limited in what information and guidance that I can provide, but I am available to answer questions about the Sheriff’s Sale and the Sheriff’s Sale process. Nothing in this post, of course, is designed to give you legal or factual advice about these sales.

As with all distressed real estate sales, buyer beware, and hire a lawyer.

Homebuyer Beware: Some of the property listings on Zillow are Foreclosures and Sheriff’s Sales

Last year, I had a foreclosure scheduled for a Williamson County property in an “in demand” neighborhood and, somehow, Zillow picked up my Foreclosure Sale Notice and listed my sale on the property’s Zillow page. In April, I wrote a post about the 500 phone calls and emails I received from all over the world, asking about the property.

In fact, I got one today from Detroit.

But, a few minutes later, I got a call about another Zillow listing, this time on a Sheriff’s Sale I’m conducting in August on 2137 Maricourt Street, Old Hickory, Tennessee 37138.

The full Notice of Sheriff’s Sale of Real Property can be found on The Wilson Post’s Public Announcements page. I have no idea how it ended up on Zillow, but anything that generates more potential bidders is good.

As indicated in the Sheriff’s Sale Notice, the property is scheduled for auction at 11:00AM, on August 3, 2021. The Sale Notice contains the terms of sale, including opening bid and the bidding process.

I post here in order provide a quick link to the Notice of Sale, which I’m planning to forward to potential bidders. This should present a great opportunity to a bidder.

In this strong real estate market, there are limited opportunities to find good deals on Middle Tennessee real property. The investors have long figured out foreclosure sales, then they figured out tax sales, and, now, Sheriff’s Sales are the next frontier. Sheriff’s Sales used to be rare–given that the process is fairly complex and confusing (even to lawyers)–but these are becoming more common, given the rise in property values and the unyielding demand for residential real estate.

As Zillow continues to grow into a trusted resource, though, I worry that a typical homebuyer may be lulled into seeing only the upsides of the potential deals listed on Zillow, without fully exploring the risks that distressed asset sales present.

I’m not suggesting that a buyer shouldn’t consider participating in a sheriff’s sale (seriously, please come on August 3), but I am encouraging every caller to educate themselves on the process and to consult with a real estate lawyer in advance.

11 U.S.C. § 363 may solve my Zillow foreclosure nightmare

Last month, I talked about how my phone has been ringing off the hook about a Williamson County foreclosure I had scheduled in late-2020, at 2113 N Berrys Chapel Road, Franklin, Tennessee 37069.

The sale was cancelled when the corporate owner filed a California Chapter 11 bankruptcy, but Zillow nevertheless has me listed as the sales agent and, ever since, I get at least one phone call a day asking about the property.

After getting three calls about it yesterday, I looked up the status of the Bankruptcy Case, and I see that the bankruptcy trustee has a sale contract on the property!

Per the Motion for Approval of Sale of Real Property [Docket 217], the bankruptcy trustee is proposing a sale of the property for $600,000 (more than $175,000 below the Zillow value). A copy of the full Motion can be viewed below.

Under 11 U.S.C. Sec. 363, a bankruptcy trustee can sell non-exempt property of the bankruptcy estate. Here, after payment of all the liens associated with this property, the trustee has determined that this sale will generate proceeds for the benefit of creditors.

If you are reading this and you are one of the hundreds of people who have called me over the past 6 months, don’t despair. Pursuant to Paragraphs 9, 12(g), 14, and 15-17 of the Motion, the trustee will continue to entertain higher offers.

But, please note, any such offers must be presented to the Trustee before the hearing on this Motion on June 14.

A successful sale will fully pay my lender client, but I’m also hopeful that a sale will cause Zillow to remove this property as an active listing and that I’ll stop getting so many phone calls.

While it’s been fun to talk to callers from all over the country about this house and the hot Nashville real estate market, it’s also been a huge waste of my time.

Of course, like any good marketer, I’m making lemons into lemonade…I’m telling all the callers about my upcoming and planned Nashville and Brentwood foreclosures for 2021.

We’ll see if Zillow notices those.

Does Post-Judgment Interest change every six months? (Probably not)

I had an “in-person” court appearance yesterday morning, renewing and extending a judgment from 2011. As a creditor, old judgments can be a gold-mine, as home values have soared in Middle Tennessee, and a well placed judgment lien might have some equity.

Plus, it’s sort of nice to take a trip down memory lane, back to when creditors automatically got 10% interest on their judgments.

As long time readers know, in 2013, they revised the post-judgment interest rate statute, Tenn. Code Ann. § 47-14-121, and switched to a variable (and lower) rate, subject to change every six months.

Yesterday, in my proposed Order Renewing Judgment that I handed up to the Judge, I included language that the renewed judgment would accrue interest “as provided in the original judgment, at the then applicable rate of interest under state law.”

The Judge asked me if that meant that interest was 10% over all of this time (and into the future) or, instead, was it a variable rate, changing each time the rate changes.

Well, Judge, that’s a legal question that drives hundreds of visitors to my creditor rights law blog every year.

The Judge asked me if I had a case or other authority to show whether or not the rate fluctuates. I hadn’t researched it (because it wasn’t really an issue on this unopposed Motion), so the Judge simply crossed out “then existing rate” and wrote in “applicable rate,” which punted the issue down the road.

But, we sort of have an answer, thanks to a local lawyer’s comment on this blog post from early last year:

From the TNCourts.gov website: “Beginning July 1, 2012, any judgment entered will have the interest set at two percent below the formula rate published by the Tennessee Department of Financial Institutions as set in Public Chapter 1043. The rate does not fluctuate and remains in effect when judgment is entered.”

And, no, that’s not a case or a statutory cite. It’s just an introductory paragraph on the Administrative Office of the Courts website. But, it’s something. And, it’s as good as we’ve got for right now. “The rate does not fluctuate and remains in effect when judgment is entered.”

As a practical matter, the best practice would be to always use a specific interest rate in any judgments. Instead of saying post-judgment interest “as provided under Tennessee law” or at the “applicable post-judgment interest rate,” always just say the a specific rate, whether it’s 5.25% or 7.45%. This text would create a presumption of a specific, certain rate of interest going forward.

As more of these Great Recession era judgments come up for renewal and lenders are dusting off these pre-2013 judgments for execution against houses and defendants with drastically changed circumstances, I’m betting that, very soon, this is going to be an issue that a creditor is going to need briefed.

My name got listed as sales agent on Zillow and my phone hasn’t stopped ringing

Last November, I started a bank foreclosure sale on a piece of property in Williamson County, at 2113 N Berrys Chapel Road, Franklin, Tennessee 37069. The foreclosure never happened, because the borrower filed a Chapter 11 Bankruptcy in the Eastern District of California.

When I received the Notice of Bankruptcy Filing, I printed a copy for my file, confirmed on PACER that the Notice was legit, and closed my file. This foreclosure sale is canceled.

In the 3 weeks that the foreclosure was pending, I’d received one or two calls about it.

But, somehow, the property website Zillow picked up my Foreclosure Sale Notice and, not only that, but Zillow has me listed as the sales agent on the property’s Zillow page. My name, address, and phone number (the ONE time I used my cell phone number), all right there online.

Since December, I’ve received probably 4-5 phone calls a week, every week, asking about this property. I’ve received calls from families, from real estate agents, and from property investors. The calls are from local numbers, as well as from far away places as Mississippi, California, Minnesota, and London. They call in the mornings, at night, and on the weekends.

I got a call last night at 8pm. I got one today at 2pm.

At this point, if I get a call from a number that I don’t recognize, I assume it’s somebody calling about “that house in Franklin that you’ve got listed for sale.”

It’s either a testament to the reach of Zillow, or the continued atomic-hot Nashville real estate market.

The people are always really nice. They also have a lot of questions about bankruptcy, when I’ll be foreclosing on this house again, and whether I have other houses I can sell to them.

Sometimes they’ll complain to me about the real estate market, about how expensive everything is and how hard it is to find a deal. Occasionally, they ask about bankruptcy and foreclosures, and, honestly, it’s easier to explain what the automatic stay is and how Chapter 11 works than to try to cut the calls short.

I’ve asked Zillow to remove my name and phone number, to no avail.

So, at this point, I propose this: If any of you are real estate agents and need “new customer leads,” please let me know.

And, finally, if you are reading this after googling “2113 N Berrys Chapel Road, Franklin, Tennessee 37069” and you are interested in buying it, here’s what I have to say:

The sale has been cancelled as a result of the borrower filing bankruptcy. A new sale date has not been set and will not be set in the foreseeable future. Yeah, you know those California judges. No, I don’t know if the kitchen appliances in the pictures are still there. No, I don’t have the keys; I just represent the bank foreclosing on the property.

And, yes, I agree. The real estate market in Nashville is insane.

Tennessee is set to increase homestead exemption in 2021

The Tennessee Legislature is, again, considering debtor-friendly changes to the homestead exemption statute.

The one most likely to pass is House Bill 1185, which seeks to increase Tennessee’s homestead exemption from the existing $5,000 to $35,000 for single homeowners and from $7,500 to $52,500 for jointly owned property.

Before you complain too much about that proposal, consider Senate Bill 566, which provides an unlimited exemption for a judgment debtor’s residential real property (and, after the debtor’s death, it passes to the heirs).

Similar proposals were made in 2019, in 2020, and also in 2012 (and a number of times in between). So far, all such efforts have failed, but I believe this is the year that the Tennessee homestead exemption is increased.

Back in 2019, I talked about the importance of exemptions for debtors, since exemptions can preserve and protect a basic necessity level of assets for debtors (picture the clothes on their back, a few thousand dollars in the bank, a car, tools).

As I wrote in 2019, though, “if this new law passes, the downfallen debtor can keep 100% of the equity in his $750,000 house entirely out of the reach of creditors.” I then said:

Wait a second. Is this law designed to protect downtrodden debtors seeking a fresh start in life (who very probably do not have high value real property at all) or, maybe, is it designed to protect high income individuals whose businesses fail?

Because that’s all this proposed law does. It grants fairly absolute protection to the high value real property owned by judgment debtors in Tennessee, and all the garnishments, levies, liens, and bankruptcies will never touch a penny of that equity.

I feel the same way about these new proposals. If we’re talking about protecting the working poor and preserving the necessities of life from garnishment, let’s start somewhere other than $750k of equity in a mansion. Let’s talk about debt relief measures, eviction support, access to justice, etc.

But, these new laws aren’t about basic necessities of life for poor people. Most poor people don’t live in lien-free mansions. Instead, these new measures are being lobbied for by the construction industry.

These are bad proposals. Unless you’re a debtors with big, lien-free McMansion. Then, sure, it’s a great new law.

Bankers: Are your Judgments expiring?

Tennessee judgments expire after ten years.

All those judgments you took during the Great Recession are coming up for renewal. If you don’t affirmatively ask the court for an extension, they just go away.

And, all those builders, contractors, investors, and so many others who were broke in 2010/2011 but who turned things around when Nashville real estate, business, and construction boomed in 2015 (and beyond)?

They’ve been waiting. Hoping that you’d forget about them. Hoping that you’d do nothing to renew your judgment.

Part of what makes this Creditors Rights blog so popular is that I keep it an objective discussion of the law. You don’t see me use it to solicit business. (Well, overtly.)

But, for today, I’ll say this: If you have a box of judgments that you haven’t touched for years…Call or e-mail me immediately. There may still be time.

I’m seeing it happen every day. Big judgments are expiring, and debtors are ridding themselves of millions dollars’ worth of judgment liens.

Once upon a time, the creditor probably got frustrated by the dead-ends (or maybe the expensive lawyers spinning their wheels while billing by the hour). Those old files got put in a file cabinet. Maybe the banker switched banks. Maybe the bank got sold.

But, if you don’t dust off those old files, you are probably leaving money on the table. If you haven’t looked at those old files lately, it may be too late.

Looking to help this season? Consider donating to the Window of Love.

You may have seen the Tennessean article last week that the State of Tennessee has amassed a historically high amount of surplus money in the Temporary Assistance for Needy Families fund, which is now at $741 million.

This is awesome, right? What perfect timing for this money in an economic crisis?

But, later, the article mentions that the state is just sitting on the money, with no clear plan in sight to use it to help people. In fact, the fund serves a smaller number of households in 2020 than it did in 2019. Some good news is that, maybe next year, the state will decide what to do with all this money.

Until then, though, I want to tell you about somebody who is doing something to help. She’s Samaria Leach, and she created the Window of Love.

It all started with a Facebook post on March 16, when she realized that the Metro school shut-down meant that there’d be no school lunches for the kids in her North Nashville neighborhood. That school lunch might be the only consistent source of food for some kids. So, from her own pantry, she put together food boxes, which she’d distribute out of her window a few days a week.

At first, she fed 25-35 hungry kids from her neighborhood with food from her own pantry.

Now, 8 months later, she’s still feeding hungry kids, but the number has tripled.

As you’re considering donations of time, money, or even food this holiday season, please consider donating to Windows Of Love. Her Facebook page frequently includes requests for grocery items that she needs for that week, including this post for Thanksgiving baskets for the families she serves.

If the state we live in isn’t going to help our kids, maybe we have to be like Samaria and recognize that we have to look out for each other sometimes.

New Court of Appeals opinion affirms landlord’s duty to mitigate damages on Tennessee leases

In a post from last month, I mentioned that, when a commercial tenant defaults and leaves a leased property, the landlord is faced with a hard decision: File the lawsuit for unpaid rent now, or do you wait 6-9 months until a replacement tenant can be found?

One thing we know for sure: A landlord can’t just file a lawsuit for all the rent due for the remainder of the term. Instead, the landlord has a duty to mitigate its losses, which means–in this situation–to try to find a replacement tenant.

Last week, the Tennessee Court of Appeals reaffirmed this duty in Loans YES v. Kroger Limited Partnership I, et. al. No. M201901506-COAR3CV, 2020 WL 6386884 (Tenn. Ct. App. Oct. 30, 2020).

As a quick summary, the Court makes the following points:

Continue reading “New Court of Appeals opinion affirms landlord’s duty to mitigate damages on Tennessee leases”