Hi All, I’m in the due diligence portion of a Tennessee MHP deal and I’m wondering how to check to see if there are any outstanding lawsuits against the park or the owners, and if so how I might be liable if the deal goes through. Any help is awesomely appreciated. Thanks-james
This response is just a suggestion and further due diligence advice may follow from others.
One would be to include such a disclosure by the seller as a contingency of the sale.
Next a good detailed title search by a good attorney or title company (they are not all created equal) should not only include the search of the title but also any judgement against the seller and previous owners themselves (not just the entity).
Pay extra if necessary and be the one who hires this done. Do not use the seller’s closing agent if they suggest you do so. You need someone who is hired by you to look out for your best interest, not the sellers. Let this closing agent/title company/closing attorney know in detail what your concerns are and let them explain how they will go about protecting you.
Many courthouse public records are now available online - if not, then call or visit in person. All states have a public records act - Google for TN and familiarize yourself. Use the title-work in order to search for all related parties to the property.
Regarding liability: Your contract should spell out what you are buying and what you are not. If you are purchasing the sellers entity then you will likely assume their liabilities. Even if you are purchasing the “assets” you will still be assuming many risks. Know what you are buying, hire competent advisors, and make careful decisions.
Good luck on your deal,