Legal Question in Real Estate Law in California

Co-Owner Accounting, Title, Loan, and Court Lien Issues
My husband and I, along with my sister�s kids are co-owners of a 2-unit property. My mom gave it to my sister and me, but my sister transferred her portion to her kids. Before that transfer we got a bank loan to do improvements to the property. My sister and her husband used part of the money to paint the outside, but little or nothing else was done to the property. I�m guessing they pocketed the change. I stopped giving my sister money for the loan payments, I don�t want to continue until she accounts for the use of funds. Now that lender is trying to collect. Worse than that, when my sister had to be bailed out of jail (pending criminal case) her kids pledged the property to the court. I don�t think the court realized I am also on title because they never asked or received my consent. I have issues with my sister, her kids, the lender, and now the court. Where do I begin?

Asked on 4/30/04, 12:26 pm

4 Answers from Attorneys

Scott Schomer Schomer Law Group

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Re: Co-Owner Accounting, Title, Loan, and Court Lien Issues

This sounds like a mess. You should review the status of title. You should consider buying out your sister (or her kids) or agreeing to sell the place. If you can't get along, then you should appoint a neutral manager to operate the building. If all this fails, you may want to consider filing a partition action which allows the court to force a sale. The longer you remain in partnership with your sister, the more problems it can create. Please contact me if I can be of assistance.

Answered on 4/30/04, 12:51 pm

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Roy Hoffman Law Offices of Roy A. Hoffman

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Re: Co-Owner Accounting, Title, Loan, and Court Lien Issues

The first thing you need to do is make sure that the mortgage payments are being made in full. If the lender does not receive all of the payments you and/or your sister are obligated to make, it will foreclose on the property, and you will be left with nothing. You should also note that the lender will likely add late fees, and interest to every payment not made and, if the property goes into foreclosure, the lender will be entitled to all of the costs incurred for that foreclosure.

Your unfortunate situation with your sister, her children, and the court have nothing whatsoever to do with whether the lender is entitled to the mortgage payments.

Next, you should contact an attorney in your area that practices in real estate litigation to discuss your situation in more detail. As Mr. Shomer suggests, you may need to file a partition action to have the court make a determination of your interests in the property, and ultimately sell the property (either to a third party, or you or your sister's children may want to buy the other's interest in the property). In a partition action, the plaintiff is generally entitled to their attorney's fees and costs in bringing the partition action because the partition action is considered to be for the benefit of all owners.

With respect to your sister's children "pledging" the property to the court, they can only "pledge" what interest they have in the property. If your sister "jumps bail," the property will likely be sold; however, only an amount equal to your sister's children's interest in the property can be used to satisfy the obligation to the court.

Our firm handles these types of actions, and would be happy to discuss this matter further with you. Please feel free to call (714) 997-9222 to set up an initial consultation.

Answered on 4/30/04, 2:08 pm

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