Definitely seek legal advice in the country and subdivision (e.g., US state) where Greg lives!
You may think of this as a bet, but I’ll propose an alternative possible paradigm: it’s may be a plain old promissory note backed by a mortgage. That is, a home-equity loan with an unconditional balloon payment in five years. Don’t all contracts in which one party must perform in the future include a necessarily implied clause that performance is not necessary in the event that the human race goes extinct by that time? At least, I don’t plan on performing any of my future contractual obligations if that happens . . . .
So even assuming this wouldn’t be unenforceable as gambling, it might run afoul of the rules for mortgage lending (e.g., because the implied interest rate [~14.4%?] is seen as usurious, or because it didn’t comply with local or national laws regulating mortgage lending). That is a pretty regulated industry in general. It would definitely need to follow all the formalities for secured lending against real property: we require those formalities to make sure the borrower knows what he is getting into, and to give notice to other would-be lenders that they would be further back in line on repayment.
I should also note that it is pretty difficult in many places to force a sale on someone’s primary residence if you hold certain types of security interests (as opposed to, e.g., a primary mortgage). So you might be holding a lien that doesn’t have much practical value unless/until Greg decides to sell and there is value after paying off whoever is ahead in line on payment. Again, I can only advise seeking legal counsel in the right jurisdiction.
The off-the-wall thought I have is that Greg might be able to get around some difficulties by delivering a promissory note backed by a recorded security interest to an unrelated charity. But at the risk of sounding like a broken record, everyone would need legal advice from someone licensed in the jurisdiction before embarking on any approach in this rather unusual and interesting scenario.
Definitely seek legal advice in the country and subdivision (e.g., US state) where Greg lives!
You may think of this as a bet, but I’ll propose an alternative possible paradigm: it’s may be a plain old promissory note backed by a mortgage. That is, a home-equity loan with an unconditional balloon payment in five years. Don’t all contracts in which one party must perform in the future include a necessarily implied clause that performance is not necessary in the event that the human race goes extinct by that time? At least, I don’t plan on performing any of my future contractual obligations if that happens . . . .
So even assuming this wouldn’t be unenforceable as gambling, it might run afoul of the rules for mortgage lending (e.g., because the implied interest rate [~14.4%?] is seen as usurious, or because it didn’t comply with local or national laws regulating mortgage lending). That is a pretty regulated industry in general. It would definitely need to follow all the formalities for secured lending against real property: we require those formalities to make sure the borrower knows what he is getting into, and to give notice to other would-be lenders that they would be further back in line on repayment.
I should also note that it is pretty difficult in many places to force a sale on someone’s primary residence if you hold certain types of security interests (as opposed to, e.g., a primary mortgage). So you might be holding a lien that doesn’t have much practical value unless/until Greg decides to sell and there is value after paying off whoever is ahead in line on payment. Again, I can only advise seeking legal counsel in the right jurisdiction.
The off-the-wall thought I have is that Greg might be able to get around some difficulties by delivering a promissory note backed by a recorded security interest to an unrelated charity. But at the risk of sounding like a broken record, everyone would need legal advice from someone licensed in the jurisdiction before embarking on any approach in this rather unusual and interesting scenario.
Thanks for sharing your thoughts, Jason!