Legal Question in Real Estate Law in California

The three of you and their wives need to sit down and discuss in detail what everyone wants done [the two who married are not going to go against their wives, but you should treat it as being three separte votes among all five of you]. Once everyone decides on the general results that are acceptable, you probably should as a group hire a real estate attorney to figure out what is the best way to resolve the situation.

I fail to see how the partner who has married is unable to claim the deductions he was taking before [1/3 of the depreciation and mortgage interest and tax payments offset by the rental income]. He can only deduct the reduction in value of the property upon his selling his share at a sum below his basis. If you are not able to refinance on the property, which I suspect is very true, the lender might not be willing to allow the two others to get off the current mortgage debt so that they have more people owing them the money and are thus more secure. Contact the lender to see what they are willing to do, but it may take some time to get an answer.

First, I agree with Mr. Shers that a "global solution" is probably much better than trying to deal with the co-owners one after another.

In addition, the thought "seller financing" comes to mind. Little or no cash needs to change hands. You give each co-owner a promissory note and deed of trust, and each co-owner gives you a deed. The terms of the financing could be "interest only, due in five years" or whatever you are able to negotiate, keeping in mind your ability to pay.

If the current lender is not going to be paid off, you need to get its approval for whatever deal the three (or five) of you put together, to avoid triggering a duen-on-sale provision in the existing financing.

Using a competent escrow service to handle the documentation and recording will avoid a lot of potential problems

Okay first of all I want to make sure that you are able to own the home on your own with out their help, if you can afford to keep the property we can help you, let�s start with the friend of yours that walked away he basically just needs to sign the property over to you, There are forms which your bank has that he needs to fill out. The other friend may be in the same position basically we have to get these friends of yours off the loan, your bank is going to want to see a full documentation to prove you can cover the mortgage on your own if they can they should be able to modify your loan and actually help you out.

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