If you have ever come across this obstacle you know what I'm going to talk about. If not, you need to look out for this. A tutorship is issued to protect a minor who is awarded some money in a court settlement. (It may be used for other stuff, but since I am not a lawyer, I'm telling you how I have seen it used.) Usually it's a parent that is listed as the tutor. But then there is also an undertutor (maybe the other parent or whoever the court dictated). The undertutor is supposed to keep the tutor in check. Basically, the tutorship is a checks and balances to make sure that no one squanders the money that was awarded to the minors. Here's how it affects real estate.
When a person is a tutor they cannot purchase real estate (at least not if they are getting a loan), because the tutorships acts as a first mortgage on the property. [And we all know there is no lender out there that will loan money to buy a house and let you put them as a second mortgage.] So the tutoship has to be released. It's a legal process, and a lawyer has to take the appropriate paperwork through the courts to have it released.
So what's the big deal? Well, in my experience people who are tutors do not already know that this will prevent them from closing on a new home. So we tend to find out that the tutorship exists about 3 days before the closing when the title work comes back. You can see there might be a small problem here if your lawyer is tied up with other work. It get's even more complicated. The buyer's that I have dealt with who are tutors are also low income buyers with no spare change lying around to pay the typical $600-$700 in legal fees to have the tutorship released. Ah, but even if you overcome all of this, here is one last obstacle. The undertutor must also sign for the tutorship to be released. In the two cases where I have had a client who is a tutor, the undertutor could either not be found or was unwilling to sign.
The point is that if you know in advance that there is a tutorship, you may be able to take advantage of the normal 30 day closing schedule to take the time to remove the tutorship. But calling an ex husband, ex boyfriend, or ex wife who is an undertutor at the last minute to remove a tutorship can sometimes be a daunting task. Especially if there is bad blood between the tutor and the undertutor. Right now I am have a situation where the undertutor is simply being a jerk. He will not sign. He does not care if the mother of his child purhcases a home. He does not care that his daughter will continue living in an apartment in a rough neighborhood. He, simply, will not sign. Oh, and he also doesn't send in his child support payments, but that's a whole other issue.
Of course there are other options. In my case, the buyer plans to petition the court to allow her to proceed despite the undertutor being a jerk. The court will probably agree, but as I mentioned this buyer does not have the money to petition the court. In order to get this deal done, the lender, myself, and the listing agent will all have to participate in paying the costs for the buyer to proceed. We are all willing to do so as we all have a desire to see this deal get done. The lender, who isn't making any money off this deal anyway, feels compassion for the buyer as do I. The listing agent, has a seller who will, likely, lose her home to foreclosure if the deal doesn't close. And we all want our clients to have happy ending.
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