Helping out my contractor and satisfying a want
I did quite a few smoking deals this December, but I wasn't sure which to choose for this post. Being the 'giving' season, I decided to go with the deal I did with my contractor. He called me up and asked if I would be willing to negotiate an old lien against one of his properties. He was in the process of refinancing it and title was holding 1.5 times the amount he owed one the judgement until he either agreed to pay it, or settled with the creditor. When he asked me what I wanted in exchange, I had to think about it. Typically, when I negotiate to discount a lien, I get the full benefit of it. I tell my client I will take care of it in escrow, then I negotiate it down and the difference goes in my pocket, not theirs. This was a special situation. My contractor has saved me thousands, possibly tens of thousands on the houses he has rehabbed for me and my rentals that he handles the maintenance for. I decided to ask him to buy me a new fly rod in exchange for my services.
The judgement recorded against his rental property was in the amount of $7,763.39. The other issue was that this judgement was 9 years old. Judgements in California accrue interest at a rate of 10% every year. The interest rate isn't compounded though until the judgement is renewed at the 10 year mark, so the interest penalty was $776.34 times 9 years for an additional $6,987.06 in interest. That made the total amount owed $14,750.45.
The other problem was that this judgement was so old, it was very difficult to even track down the company that was holding it and then the legal firm they had assigned it to for collection. I first started making phone calls in mid October and it wasn't until Late November I was even able to connect with someone who was willing to look into it further for me.
By early December the company had finally located the legal firm they assigned it to. I got in touch with them and faxed in the paperwork they needed in order to negotiate directly with me. A few phone calls later, some going back and forth between the company and the legal firm and I was able to get them to settle for $0!
A few days later I received the release and satisfaction. I sent it to the title company via FedEx. I informed my contractor that the lien was taken care of. He sent me back an email that stated, "Wow, it's like Christmases, that's going be one nice fishing rod!"
Yes, it is going to be a nice rod. I've always wanted a good rod for steel head fishing in northern California and this will cover it nicely.