Legal Question in Real Estate Law in California

Re: Dad wants to buy us out

From the facts, it appears that your father needs a better or further explanation of how a joint tenancy works legally. If you would like a free phone consultation in order for us to better understand exactly what the circumstances are and further guidance from there, contact us directly today.

Re: Dad wants to buy us out

If your father is unwilling to accept any proposals which you deem fair, the only way to resolve the problem is by filing an action for partition. In a partition action the court will determine, from the evidence (including the deed), what each joint tentant is entitled to. Once that is determined, the court will order the property sold then divide up the proceeds between the parties in accordance with its determination.

If an action for partition is filed, the party or parties bringing the action are general entitled to be paid a portion of their attorneys fees and costs in bringing the action out of the defendant's proceeds of sale. The theory is that by bringing the action, you are preserving the property's value for all joint tenants.

We have significant experince in these types of actions.

Re: Dad wants to buy us out

I may disagree with Mr. Torrey, based on the comment you make about adding your wife to the deed.

If you and your dad originally acquired the house as joint tenants, but your wife was added to title at a leter date, this would in all probability destroy the joint tenancy and make all three of you tenants in common.

While joint tenants always have equal shares of legal title, e.g. 50-50 or 1/3 - 1/3 - 1/3, this is not necessarily the case with tenants in common, where any percentage split is possible, even 98% - 1% - 1%.

In your case, it will all come down to the deed(s) used to put your wife on title. If both you and your father joined in conveying to her, she may have acquired a 1/6 interest from him and a 1/6 interest from you, giving her 1/3 and leaving you and your dad with 1/3 each. It is even possible that the old joint tenancy which was destroyed was replaced with a new three-way joint tenancy.

The bottom line is that it is possible to re-arrange ownership shares by deed, whether or not money changes hands, and the current ownership percentages will probably depend entirely upon who deeded what interests when your wife's interest was created.

Another principle to keep in mind is that overall percentage ownership cannot be increased or decreased by a deed. That is, if X owns 50% of Blackacre going in to a transaction with Y, when the smoke clears and the deal is done, X may own 0% and Y 50%, or X and Y may each own 25%, or any other combination adding up to 50%, It is, however, impossible for X and Y each to emerge with 33-1/3%.

One other thing you should be aware of is that just getting off title to a property where you are a borrower on a refinancing loan does not necessarily relieve you of personal liability for a deficiency judgment if the property is judicially foreclosed and the proceeds don't pay off the loan.