Which Laws Apply to Me if I Own Property in Another State?
My wife owns a house in Maryland. We live in Florida. If we allow the house to fall into foreclosure, which laws apply?
My wife (then fiancÃ©) bought a house in Maryland in 2005. It was a fixer-upper; she tapped equity to make repairs. In 2007 (year we were married), we moved to Florida for career purposes. We attempted to the sell the house at that time, but it didn't go. We cycled through three renters since then as reluctant landlords. Currently, the home is in need of some structural repair (roof mostly but also possible mold issue in one section of the house). We have a primary mortgage and a home equity; the primary is under her name only; the home equity is under both of our names. With the loss of the income from the renter, we can no longer make payments, and the home is well under water given current market conditions. The house is on sale; we are hoping for a short sale. Short sale or foreclosure, the home equity will not get much, if anything. Our current income covers our Florida mortgage and monthly expenses and not much more. What can the home equity lender come after us for? We owe approx. $75,000. Are the bound by the laws of Maryland or the laws of Florida?
Trick question: You are bound by either Maryland or Florida laws depending on the issue. Today, you are Florida residents and are subject to Florida traffic and criminal laws when you are within Florida's borders. The same holds true for you when you are in Maryland and every state in between.
The difficult part of your question regards civil issues and the proper jurisdiction for civil actions. Federal rules of civil procedure are covered in two semesters of law school, and some schools teach local rules in a third semester. It would be impossible for me to summarize all of the rules in play, and it would be folly for you to accept what I am about to write as the definitive answer to your open-ended question.
With the understanding that what I'm about to write is a vast oversimplification, where the property is situated has great weight when deciding which court has jurisdiction. If you have a dispute involving the sale of the property, then it is likely that a Maryland court has jurisdiction. If you are contemplating allowing the property to fall into foreclosure, then Maryland's foreclosure rules apply.
On the other hand, if you are looking at bankruptcy, then Florida's rules apply regardless of where your assets are located.
On the third hand, because the amount in controversy potentially exceeds $75,000 and may involve diversity of parties (the parties are in different states), you may find your case in federal court.
Without knowing which issue you have in mind, it is not possible for me to be more specific. See the Bills.com page "Collection Laws and Statute of Limitations" for state-specific information. Perhaps it goes without saying, but you really need to consult with an attorney in Florida to look at the entirety of your case to determine which laws apply to your issues.
Regarding the home equity loan, this is treated as a second mortgage. See my answer to another reader who had a similar question: "Can a Second Mortgage Holder Foreclose if the First Mortgage is Current?"
I hope this information helps you Find. Learn & Save.