How We (Almost) Got A Free House
Good thing that we're honest people.....
We sold the Modi'in cottage. As many of you know already, there is no such thing as a Title Company here in The Land. Lawyers do that work. Never never never never do anything without a lawyer we were told.
With good reason, it turns out...
House selling is on the installment plan. We sold our place and between us, the buyers and our respective attorneys, we worked out a schedule of payments. There were to be four payments: one at the contract signing, another in 60 days, the BIG installment payment upon getting notice that the Builder will turn over the "04" (a form indicating he's done and we're the new owners), which arrives about 30 days before construction is finished, and a final payment that should sit with the attorney in escrow until all the taxes are untangled and paid.
The final two payments, once we (read: Yossi) wrung them out of the Buyer, go into our attorney's trust account. She transfers all but a small amount for the taxes to our account. While the wrangling over the payments, the scheduling of such, and the kinds of checks (bank or personal) wear on, the money nonetheless makes its way into our account.
I asked my attorney several times during this process about paying off the small mortgage we have at Bank Leumi. While we could have paid cash for the cottage, we decided a small mortgage was more advantageous as it left us cash to work with. No problem, she told me breezily--when we get to that point, I'll take care of it.
I'm still not clear on how this works, so I put the question to the bank officer I've been working with. "Oh, its pretty much automatic," she tells me cheerily. "We just transfer the mortgage from the cottage to the penthouse."
Nevermind. This is what I have an attorney for, I tell myself.
Two weeks ago, I got tired of being brushed off by all concerned, because another pressing problem is that when one takes out a mortgage, the bank very reasonably insists on life insurance to cover that mortgage. In a country beset by war, terrorism and rocket attacks, this is not unreasonable, however galling it may be. My concern is that my paperwork all shows that the insurance is for the cottage in Modi'in and not for our new place in Jerusalem.
My attorney is, as usual, too busy to talk to me and never returns my calls, so I go to the bank officer instead.
She looks at my paperwork. "Did you sell the cottage?" she asks, a frown forming.
Last November, I tell her.
"What!!?" she almost shrieks. The frown deepens, and the formerly cheery bank officer gives me a look I'm quite certain she reserves for money launderers.
"Where's the money?" she demands.
"In the bank," I said, a bit taken aback by her hostility.
"WHAT bank?" she almost shouted.
"OUR bank, in our account," I answered, still bewildered. "It's okay, it's 'locked up' for the penthouse payments," I tried to reassure her. Here there is an option to "lock" up a certain amount of money in one's checking account for a period of time with a fixed interest rate, like a CD--and of course, that rate is negotiable.
"How did this happen?!" she demanded.
"How did WHAT happen?" I'm now completely lost. Rapid fire Hebrew ensued between her, her fellow bank officer who was perusing the computer and talking excitedly to her, and Yossi, who fortunately had come with me. Finally Yossi tells the computer guy to give him a list. Computer guy gives him a list of five items, Yossi thanks him and says, "Come, Sarah."
"What happened? Where are we going?" I ask. "What happened back there?"
"Altidagi, motek," he says with a 'calm down' gesture. We're going over to your attorney's office," he adds. Fortunately the law office is only two blocks away.
When we arrive, it is like arriving in an overturned anthill. I see our attorney in the front secretarial bay, a cellphone in one hand, a paper in the other, shouting, "Call Sarah. If you can't reach her, call Yossi! No, call Yossi anyway!"
Yossi calls out, "We're here." He hands her the note from the bank officer. The attorney who never had time to come to the phone or return phone calls suddenly cancels the day's appointments and wisks us into a conference room. I am suddenly The Most Important Client, and the focus of complete attention.
It seems my attorney, along with the Buyer's attorney, neglected to take care of the small mortgage on the Modi'in cottage. In one of the quirks of Israeli law (descended from Turkish and British law) that loan is affixed like a leach to the property in Modi'in until it is paid off!
All this money flowed from Buyer to Buyer's attorney to Seller's attorney to Seller without either attorney checking to make sure the mortgage was cleared and Buyer could take clear title.
The bank is hysterical because the bank (no doubt correctly) foresees both attorneys mounting a defense to their own malfeasance and refusing to pay off this mortgage; the Buyer is going to sue everyone if he doesn't kill the attorneys first.
Even my attorney tries a wiggle. "You never told me you had a mortgage on this property, did you?" is the question, with a broad smile.
With a crocodilian smile back, I assured my advocate that not only had I said I had a mortgage, but on several occasions since the sales contract was signed, I had asked precisely what was the procedure for dealing with the cottage mortgage and how would I 'transfer' it to the penthouse; and as recently as early February (I would have to check my notes to be sure of the exact date) you told me not to worry, you would take care of it. Toothy smiles all around. My smile said, I'm not taking the fall for your screw up.
In short, we got all the money. We don't need no stinking mortgage. What mortgage there was is no longer technically ours since it's attached to a property we don't own and the new owner needs to thrash out exactly who is going to pay for this mess between the bank and the two attorneys. Lawsuits and cross-suits were about to break out like weeds.
No wonder I was the Client of the Day.
Ahem. This is why it's a good thing we're honest people. Yossi explained after we ironed all this out that half the people in Israel would've said, "Wheeee! Bank error in MY favor! All the money is in our account, so all of you suckers figure out which of you is going to pay the piper for this mistake!"
Instead, I said, "Then why don't you simply call the bank, have them draft a new mortgage in the same amount for the penthouse, and then we'll still be liable for the amount, and the bank can clear the Buyer's title and everyone will be satisfied?"
Stunned silence. Right. My attorney is suddenly busy with a flurry of phone calls to bank officers all the way up to the VP of Something Special in Tel Aviv and sure enough, those papers will be ready for us to sign tomorrow! (Presumably before the Buyer finds out he almost got screwed.)
We signed the papers. The formal clearing of title will take about a month, but I think I heard sighs of relief from two law offices and about 14 bank officials after we signed.
Signing was another story, and once more, Yossi saved our collective olim tushes....