Sacramento Bankruptcy Lawyer Blog

Single Asset Real Estate (SARE) refers to real estate entities attempting to hang on to real property ownership consisting of a single property or project, other than residential real property
with fewer than 4 residential units, which generates substantially all of the gross income of a debtor who is not a family farmer and on which no substantial business is being conducted by a debtor other than the business of operating the real property and incidental activities. Bankruptcy Code Section 101(51)(B).

Chapter 11 cases for a SARE entity may be about raising new capital, renegotiating loans, or selling the asset. The SARE debtor must file a plan of reorganization that has a reasonable possibility of being confirmed, or make monthly payments to each creditor whose claim is secured by the real estate.

Many people lose their properties when they start falling behind on bills. If the bills relate to property taxes, a debtor may lose real estate in a tax sale. People who lose their homes in tax sales may not realize that they may have income potential from excess proceeds. This is because when people become homeless, they might not fill out a forwarding address form at the post office, and are not notified by counties that any excess proceeds after the liens on the property are paid belong to the debtor. California Revenue and Taxation Code Section 4675.

This creates a niche market for entrepreneurs like John Lane, who wrote "Making Big Money with Over Bid Refunds". Lane launched National Asset Recovery where he helped former homeowners recover unclaimed tax excess funds in exchange for 25% of all money owed. Though businesses like Lane's may not be scams, people in California should be aware that they can easily fill out forms found on the web sites of California counties to obtain unclaimed property, and save on the 25% fees.