Uploaded March 2025 | Updated September 2026, 2 weeks ago
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In re Clare House Bungalow Homes LLC
United States Bankruptcy Court for the Eastern District of Washington
447 B.R. 617 (2011)
Recording an interest in a property not only provides constructive notice to other interest holders, but also typically gives those with a recorded interest priority over unrecorded interests.
In the bankruptcy case of In re Clare House Bungalow Homes, LLC, we'll explore whether occupants of a property with an unrecorded interest in the property have superior rights to creditors with recorded interests.
Clare House Bungalow Homes was a senior living facility consisting of twenty eight bungalows as well as common areas. All of Clare House's residents entered leases called a resident agreement and paid a lump sum for the right to live in a bungalow and use the common areas until death or becoming physically disabled.
Once death or physical disability occurred, eighty percent of a given resident's lump sum would be returned to the resident's estate and the bungalow placed on the market.
Only two residents recorded their resident agreements with the county.
Meanwhile, Clare House borrowed substantial amounts of money via five loans. The first loan was from the Caudill Group, the second and third from Kevin Blanchett, the fourth from Peter Noe, and the fifth from Lloyd and Bonnie Ross.
All four creditors recorded deeds of trust against the property.
Claire House subsequently filed for chapter eleven bankruptcy in the United States bankruptcy court for the Eastern District of Washington.
The residents argued that their right to occupy the property was superior to the creditors' claims and that if the creditors foreclosed on the property, the residents were still entitled to receive the lump sum payments promised to them in their resident agreements.
The creditors argued that their recorded deeds of trust gave them a superior right to the property over the residents.
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Get more case briefs explained with Quimbee. Quimbee has over 42,700 case briefs (and counting) keyed to 988 casebooks ► quimbee.com/case-briefs-overview
In re Clare House Bungalow Homes LLC
United States Bankruptcy Court for the Eastern District of Washington
447 B.R. 617 (2011)
Recording an interest in a property not only provides constructive notice to other interest holders, but also typically gives those with a recorded interest priority over unrecorded interests.
In the bankruptcy case of In re Clare House Bungalow Homes, LLC, we'll explore whether occupants of a property with an unrecorded interest in the property have superior rights to creditors with recorded interests.
Clare House Bungalow Homes was a senior living facility consisting of twenty eight bungalows as well as common areas. All of Clare House's residents entered leases called a resident agreement and paid a lump sum for the right to live in a bungalow and use the common areas until death or becoming physically disabled.
Once death or physical disability occurred, eighty percent of a given resident's lump sum would be returned to the resident's estate and the bungalow placed on the market.
Only two residents recorded their resident agreements with the county.
Meanwhile, Clare House borrowed substantial amounts of money via five loans. The first loan was from the Caudill Group, the second and third from Kevin Blanchett, the fourth from Peter Noe, and the fifth from Lloyd and Bonnie Ross.
All four creditors recorded deeds of trust against the property.
Claire House subsequently filed for chapter eleven bankruptcy in the United States bankruptcy court for the Eastern District of Washington.
The residents argued that their right to occupy the property was superior to the creditors' claims and that if the creditors foreclosed on the property, the residents were still entitled to receive the lump sum payments promised to them in their resident agreements.
The creditors argued that their recorded deeds of trust gave them a superior right to the property over the residents.
Want more details on this case? Get the rule of law, issues, holding and reasonings, and more case facts here: quimbee.com/cases/in-re-clare-house-bungalow-homes-llc
The Quimbee App features over 42,700 case briefs keyed to 988 casebooks. Try it free for 7 days! ► quimbee.com/case-briefs-overview
Have Questions about this Case? Submit your questions and get answers from a real attorney here: quimbee.com/cases/in-re-clare-house-bungalow-homes-llc
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Subscribe to our YouTube Channel ► youtube.com/subscription_center?add_user=QuimbeeDotCom
Quimbee Case Brief App ► quimbee.com/case-briefs-overview
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