Monday, May 06, 2013

Counter Letter...

...does anyone know what that is and why it's important in Louisiana in regards to real estate?

That's not a rhetorical question...I don't know myself but I would love someone to explain.

Gracias...and happy Cinco de Mayo!

UPDATE:  One of my legal eagle readers kindly sent me some information regarding counter letters.  I still can't quite wrap my head around how this thing can even legally exist but it certainly does.  There are explanations in the comment section but this is a really good one:
"Real estate transactions must be recorded in the public records to have effect against third parties. Basically, a counter letter is a document in which the true intent of the parties is different from that stated in another document. Most commonly, two parties to a simulated transfer agree that the simulation is not a true transfer and the original owner remains the owner. Counter letters are often used to hide assets from divorced spouses, siblings, or from creditors. "
The following are civil codes that deal with counter letters:


I've been told that there have been bills introduced in the state legislature in the past to eliminate counter letters but they never make it out of committee.  The reason I'm looking at this is because it's a great way for a politician/public official to hide property ownership in the state.  


Mafia Investigator said...

Not a rhetorical question? Even though you mentioned them in the comments to the King Georges post? Surely you jest.

In case you're not: it's basically a legal mechanism equivalent to crossing your fingers behind your back when promising something. A way to hide a side agreement (which may be completely contrary to the actual agreement.)

Often used in the case of contracts that can or will become public. So that while the public sees the alleged agreement, the counter letter spells out the real agreement. A way to skirt the law, cut out troublesome partners, make secret payments, and carry out a multitude of other dirty aspects of a deal.

Anonymous said...

Counterletters can have no effects against third persons in good faith. Nevertheless, if the counterletter involves immovable property, the principles of recordation apply with respect to third persons.

La. Civ. Code Ann. art. 2028

The prior commenter is accurate in his assessment, though, of what a counterletter is.

Doug Handshoe said...

As I recall WDSU had a story highlighting Julie Quinn leading the charge in the state senate to preserve the practice a few years ago.