Legal Question in Construction Law in California

Re: Building a Second Family Dwelling

I assume this is a question about how to do a real estate deal and not a question about how to deal with architects and contractors.

First, you need to keep it businesslike. You need to negotiate some terms that are fair to both you and your parents, then have them put into proper legal language in a signed writing, which should be notarized and probably recorded.

The first thing you need to keep in mind is that if A builds a house on B's land, the house becomes part of the real property and thus instantly belongs to B. So, unless you intend to make a gift to your parents, you need a written agreement providing for a different result.

Another thing you want to think about is how you unwind the deal if you want to move, or your parents need money, or, as sometimes happens, they die and leave all their property to charity. There is very little market for houses sitting in the middle of someone else's six acres, or for acreage with someone else's house on it.

The right answer to this puzzle depends a lot on the individuals involved and how this family operates. Some families are able to do generation-to-generation deals with comfort and success. Other families, perhaps a majority, will have serious troubles at some point or other over deals of this type. Therefore, I think it would be unwise for me to suggest any specific arrangements without knowing all the players.