Legal Question in Real Estate Law in California

I bought a house with a partner and he has since run up large credit card debts and is not paying them. He has also quit paying his portion of the mortgage and all other expenses and is planning on walking away from the house. During the process of refinancing the house and hoping to remove him from title with a quit claim deed it turns out one of his creditors has put a lien on the house for $16000 What are my options for clearing the lien and removing him from title. He has no intention of paying his debts (there are a great many more to come). Can I sue him for his debt that I will undoubtedly be paying off or the back money owed to me from his not paying his percentage? Can his pay be garnished to take care of this?


Asked on 10/17/11, 11:06 pm

2 Answers from Attorneys

Anthony Roach Law Office of Anthony A. Roach

If he has a lien that has attached to his interest in the property, you cannot have him quit claim his interest to you without paying the lien. Otherwise the lien will follow the transfer and attach to your interest.

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Answered on 10/18/11, 10:06 am
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

I agree with Mr. Roach as far as he goes, but he addresses only one point.

First, I indeed hope you are not really partners in the legal sense, in that you have set up your mutual investments in this property as a general partnership. Probably not; many co-ownerships of real property aren't partnerships, and the term "partner" is used to refer to social arrangements and non-partnership business arrangements such as LLC members as well as true general partnerships. The concern has to do with each partner's liability for any and all partnership debt.

Next, the customary legal remedy for an unhappy co-owner of property is a lawsuit for partition, which is a special kind of suit designed in the California statutes (Code of Civil Procedure sections 872.010 et seq.) whereby a co-owner may ask a court to have the property divided up - this used to be done by "physical" lot-splitting, but due to practical and legal limitations, nowadays usually involves sale of the property and division of the net proceeds after equitable adjustments for excess expenditures made by one co-owner.

A practical problem with partitioning nowadays is that many properties don't have enough equity to produce any dividable net after selling expenses and paying off liens. You don't say whether there is equity in this property, and maybe there is if there was a prayer of doing a refinancing, but maybe an "underwater" partition is preferable to noe at all.

If you could give me (off the bulletin board) some financial details, I could give you a better idea whether partition would work, and a couple of alternatives (maybe suit for fraud, or an equitable remedy such as an involuntary trust). Who paid the down payment? What are the loans and liens today? What might the property bring in a sale?

Pay can be garnished to satisfy a judgment, but you are several steps away from a money judgment, and the first step is to determine the appropriate law under which to sue - partnership, partition, fraud, maybe contract, etc.

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Answered on 10/18/11, 9:40 pm


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