I was researching for an upcoming project and noticed a couple odd things. I know nothing about charitable foundations or how they operate and this may be totally normal. A parcel on a main highway was valued at $100,000 in 1990. In 2016 it was donated to a charitable foundation. In 2019 it was valued at $300,000. In 2020 the value was $200,000. In 2022 it was $100,000. This year it sold for $100,000. Two months later is sold again. This time for $115,000. The security deed filed after the second sale was for the amount of $276,000. There have been no changes to the large vacant lot.
Something just doesn't seem right about all that. Does anyone know anything about charitable foundations and if that's some normal procedure?
Thanks
What is a security deed?
In the State of Georgia, the instrument used to secure a debt on property is called a "Deed to Secure Debt" or "Security Deed."
OK We had something like that over 60 or 70 years ago, here. Local banker looked like he owned most everything because the last deed of record was to him on a large number of properties. This has been replaced by filing a lien against the specific tract involved in securing the debt. The earlier style made defaulting on a loan a major problem as all the lender had to do was prove the terms of the loan had not been met. Transfer of ownership happened immediately upon filing of the default. There was no appeal or delaying mechanism.
Back to the issue with the wildly varying appraisal numbers. What happens in some cases is that an appraiser is brought in to evaluate a property based on what it would be worth if used in a specific manner different from the current use. Then the donor to a charitable organization claim that higher number as being the amount donated. This is easy on a property that might be a rental property, say a grocery store. Empty it's not worth much. If rented out, it's worth much more. The donor then gets a far larger tax savings.
Interesting... I think there are certain rules they have to follow, but yes, it is easy to foreclose. A couple interesting details. The signer of the deed (as grantor) that donated the property in 2016 was the president of the land company that owned it since 1990. The deed from the foundation was signed (as grantor) by the CEO of the foundation. The CEO of the foundation is the same person as the president of the land company. Conflict of interest maybe? The guy that bought it from the foundation after the value went down, had a daughter in law working at the assessor's office at some point in time....
