Title disputes or zoning violations can make real estate transactions more complicated than they need to be, as shown in one such case in Michigan. The St. Clair Inn opened in 1926 as the first hotel in the country to have central air conditioning, but almost a century later, the inn is now facing an uncertain future.

The property was foreclosed on Aug. 8, 2013, and St. Clair Inn LLC, the current owner of the property, had six months to get caught up on past due payments. The company is reportedly more than $95,000 behind on taxes and owes the bank $2.1 million plus an additional $355 per day in interest starting from the foreclosure date. The foreclosure redemption period will end on Feb. 9.

The inn has been for sale for quite some time and was listed in 2012 with Premier Properties at $3.5 million. According to the St. Clair County Register of Deeds, TransCapital Bank, based in Florida, has paid the taxes and bought the sheriff deed.

According to the real estate agent for the property, it is expected to remain open until the end of the foreclosure redemption period, but the bar and restaurant are not open all week anymore. He also said that leaving the inn open keeps the property in a condition suitable for sale.

There are people interested in the property, but there is a title dispute that is holding things up. In 2005, Waterfront Hotel Ventures sold the inn to St. Clair Inn LLC, but it kept a south portion of the property. According to the real estate agent, zoning ordinances did not allow for the splitting of the property, meaning that there is no clear title to either parcel.

St. Clair Inn LLC won a suit against Waterfront Hotel Ventures, but Waterfront appealed, stalling the title issue further. Without a clear title, the property cannot be sold. The agent indicated that he was still hopeful that the property would eventually be able to be sold and that some of the the interested buyers had the capability to restore the property, maintaining its historical significance. It remains to be seen what will happen in this situation, but if the previous owners of the property had understood the consequences of splitting the parcel up, these difficulties may have been able to be avoided.

Source: Detroit Free Press, “St. Clair Inn’s fate remains in financial tangles” Liz Shepard, Jan. 17, 2014

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