Trump Hits a Snag in Bid for Foreclosed Property

     (CN) – Trump Virginia Acquisitions must face a trial to establish who owns the first right of refusal for a multimillion dollar estate that went into foreclosure, a federal judge ruled last week.



     Bank of America affiliate Quality Properties bought a mansion and 98 acres at a foreclosure sale for $15.26 million in February 2011. Trump Virginia Acquisitions, a company owned by Donald Trump, was the second highest bidder on the property, with a bid of $3.6 million.
     The county tax assessor valued the house and land at $17.116 million.
     At the sale, Trump claimed that he had the right of first refusal regarding the property, stemming from a 1990 quitclaim deed to the foreclosed-upon owner. While the right technically extends only to the property’s original 9.9 acres, upon which the mansion was built, he claimed that it granted him the right to the entire property.
     After the auction, Trump claimed that Quality Properties could sell the mansion only to him, but “maybe someone is stupid enough to buy the house.”
     Without a quiet title, unencumbered and free from any disputes, Quality Properties cannot sell the property to a third party.
     To resolve the dispute, Quality Properties demanded that Trump either buy the property for $15.26 million or sign a release of his right of first refusal. Trump refused to do either, according to the judgment.
     Quality Properties then filed a lawsuit, saying the right of first refusal had been terminated or its ownership needs to be determined by the court.
     U.S. District Court Judge Norman Moon denied Trump’s motion to dismiss last week.
     While Trump claimed that the value of the original 9.9 acres is too speculative, removing subject-matter jurisdiction, Moon disagreed. “It is probably inconsequential that Trump’s claimed right of first refusal might extend only to the original 9.9 acres of the 97.98 acre property,” Moon wrote.
     “Any ruling regarding the original parcel will necessarily affect the entire property because there is now only one estate, the entire property,” he added.
     Trump bid $3.6 million for the property, well over the $75,000 threshold that would grant the court jurisdiction in the matter, the court noted.
     “Qualities Properties contends that it cannot presently convey marketable title to a third party, and the economic worth of the object in controversy is the value of the entire property,” Moon wrote. “Thus, for the amount in controversy purposes, the value of the entire property is the proper measure.”

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