What Homeownership Rights Are Lost After a Sheriff Sale

Added July 30, 2009 by Ilyce R. Glink

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Summary: What homeownership rights are lost when you lose your home in a sheriff sale? As a homeowner, you also own mineral rights, water rights, air rights, and in some cases riparian rights. Which of these homeowenrship rights will be lost?

Q: I recently filed for bankruptcy. The sheriff has seized my property. Do I still have mineral rights to the property?

A: My sense is that when you lose your property – and I’m inferring from your email that you lost your “property” as a result of a foreclosure, non-payment of real estate taxes, or other legal issues that allowed the sheriff to seized it – you also lose all mineral rights to it, just as you would lose any other rights, such as riparian, water, air, and others.

Bankruptcy alone wouldn't necessarily cause you to lose your property, especially if you filed for a reorganization rather than for a liquidation. According to John Ventura, a bankruptcy attorney and author of "The Bankruptcy Handbook: Everything You Need to Know to Avoid Bankruptcy, Get Rid of Debt, and Rebuild Your Credit," a Chapter 13 bankruptcy (also known as a reorganization) will allow you to keep most, if not all, of your assets It allows you to pay off some types of secured debts (like car loans or furniture loans) by paying what the underlying collateral is worth rather than what you originally paid for it; get rid of a portion of the outstanding balances on certain types of unsecured debts; gives you three to five years to pay the amount of your past due mortgage; gives you three to five years to pay debts that would be non-dischargeable in a Chapter 7 bankruptcy (like past due taxes, past due child and spouses support); and it will be reported on your credit history for 7 years rather than 10 years.

In a Chapter 7 liquidation, the bankruptcy trustee "takes control of most or all of your nonexcempt assets, setlls them, and distributes the sales proceeds among your creditors according to the rules of bankrupty," Ventura writes.

But if the sheriff has seized your property (what most people call a sheriff sale) for the many reasons that we are all reading about in the news these days, such as foreclosure, bankruptcy liquidation or non-payment of property taxes, then you would lose all rights to the property.

You should talk to a real estate attorney about your specific situation, but in general, the sale of a property includes all homeownership rights that go with that property. In some cases, owners of properties have withheld selling mineral rights or other rights that would typically go along with the property.

If you gave someone a mortgage to your property and included all rights to the property, including the mineral rights, the lender has the right to foreclose on that property and thereafter sell off the property with the mineral rights.

If you are trying to avoid foreclosure, buy our eBook at the ThinkGlink.com Store.

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Please consult with a real estate attorney for more details.

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