Recent Foreclosed Home Purchaser Discovers Title To Wooden Shed On Property Belongs To Another; Judge Says Cough Up $1,800 Or Kiss It Goodbye!

In Bristol, Virginia, TriCities.com reports:

• The property seemed ideal: a tidy white house with blue trim, complete with a small yard, garage and wooden shed. A bank had foreclosed on the house, which sat empty for a few months in late 2010, until Linda Shelton bought it and happily settled into her new home on Nevada Street in December. That new-home bliss was short-lived, however.



• Shelton soon found herself at the business end of a lawsuit: A company claimed ownership of the wooden shed in her yard, which Shelton believed to be hers.
  
  A side effect
  
  
• Unfortunately, law professors said, issues like this – disputes over ownership of property either attached to or sitting on a foreclosed piece of land – are not uncommon, and, are likely to increase as more homeowners lose their properties to foreclosure.



• The question of whether sheds, trailers or aboveground pools are real or personal property is a common one, said George Kuney, the W.P. Toms Professor of Law and Director of the Clayton Center for Entrepreneurial Law at the University of Tennessee in Knoxville.
  
  Real vs. personal
  
  
• The debate at Shelton’s home, and similar disputes, hinges on this: Is the shed real property or personal property? “It comes up the most with trailers,” Kuney said. “If you just plop it on the land it doesn’t become part of the property.”



• The problem with Shelton’s shed is that it is on cinderblocks, and therefore considered portable. “If she or her predecessor had bolted it to the ground or mounted it to a foundation it would become part of the real estate,” Kuney said.



• But her predecessor hadn’t bolted it to the ground, because that action would have interfered with his agreement with the leasing company, the same company currently suing Shelton over ownership.

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• Shelton said she doesn’t understand why the shed issue wasn’t settled long before she bought the property. [...] She said no liens against the house or the property were found before she bought the land. Her granddaughters had already started decorating the inside for a playhouse, she said.



• Shelton’s real estate agent, Mike Mumpower, went to court with her the first three of the six times she’s been there over the shed. The judge ruled the building was the personal property of the management group, and gave the company an indefinite amount of time to pick it up. Or, Shelton was to pay the company $1,800 for the shed. The management company immediately filed a judgment of $1,800 on Shelton’s credit report, she said.



• Mumpower said he thought the judge’s ruling might set a precedent regarding personal property ownership, and he had never heard of such a situation. Shelton just thinks the whole thing is unfair.

For the story, see Buyer beware has new meaning in foreclosure flood.