Legal Question in Real Estate Law in California
Buying house from parents
Rented home from parents 8 years. Year ago offered to sell to me for $200,000. To help qualify I was to be added to Title & pay mortgage, insurance, taxes direct and all repairs. Also pay interest on a deed of trust using property as security. Then refinance in my name, pay off mortgage & trust deed. Mortgage $150,000, trust deed $50,000 to parents, total $200,000 selling price. Made all payments, repairs, and many improvements. Now parents want $300,000 because value has risen and never added me to Title. Admit verbal agreement claim statute of fraud. Deed of trust was written. Trusted parents. Will not return interest paid on trust deed. Could have bought home a year ago using alternative methods or brother-in-laws home that went in foreclosure but relied on parents agreement. Have to stay in area because my business of 20 years is in area. Now I am priced out and will have to move out losing my business. Any recourse such as promissory estoppel, part performance, etc.?
3 Answers from Attorneys
Re: Buying house from parents
Yes. You could sue for fraud given the natural relationship of trust and confidence. But, I don't recommend it. They will have a different version of the events and you will further destroy family relationships, probably irreparably.
Re: Buying house from parents
Don't give up hope. While a real estate deal has to be in writing to avoid the statute of frauds, this requirement doesn't mean the whole deal has to be in writing. In fact, unless you have an integrated document (i.e. a complete expression of intent), you can enter evidence of oral terms or modifications. I am going to trial on a very similar case. See a real estate attorney as soon as possible to evaluate the situation.
Re: Buying house from parents
Start by locating and reading the old (1950s ??) California Supreme Court case of Monarco v. LoGreco. This is your basic promissory estoppel vs. statute of frauds case. Part performance is also helpful esp. if the payments are clearly in the purchase direction rather than just rent.
There is another legal doctrine you might explore, and I think it falls under the general rubric of 'undue influence;' although that term usually refers to persuading an elderly relative to deed you the farm for $2, I think either it or a closely related doctrine says that parties in a relationship of trust such as parent-child should perhaps not be expected to reduce to writing what strangers are required to document.
Sorry, I'm answering from home with no reference library at hand, so this is just from general recollection, but check out the category.
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