Legal Question in Real Estate Law in California

Re: family fued-home purchase

I hope that your mom has a written agreement (or documents that can legitimately constitute a written agreement) between herself, and her daughter and son-in-law, to establish the facts as you laid out. Essentially, the promise to transfer real estate, in order to be enforceable, must be in writing. There are certain exceptions, but we would need to review all underlying documents to determine whether the exceptions apply.

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Re: family fued-home purchase

I don't believe a written agreement will be necessary to straighten this out; at first blush it seems to be a classic example of a purchase-money resulting trust ("PMRT"), and they aren't governed by the laws that require transfers of real estate to be in writing. What you will need, however, is credible witnesses or other evidence to establish the truth of your facts to the "clear and convincing" standard, which is higher than "balance of the evidence" that applies to most civil actions, but not as difficult as "beyond a reasonable doubt," the criminal standard.

A PMRT arises by operation of law, not by private agreement, whenever title to real property is taken in the name of X, but Y's money is used, and the circumstances do not show that Y intended to make a gift to X.

X is regarded as the involuntary trustee of the PMRT, and X holds title to the property for the benefit of Y, who can demand that legal title be transferred to her at any time.

The only possible negative feature of this case, as I see it, is that the purpose of the arrangement was, well, kinda to deceive a lender. That minor cloud probably doesn't prevent your mother from sueing and winning, I think, because of all the parties, she is probably the least to blame for any fraud on the lender. Further, if there has been a refinancing, the original lender is out of the picture and wouldn't have standing to complain.

The strategy (after the facts are reviewed and confirmed) would be to file a quiet title suit against the sister and brother-in-law, asserting title on the basis of a PMRT, and to file a notice of pendency of action (also called a "lis pendens") in the recorder's office, which will effectively prevent a sale while the court adjudges mom's claim to be the 100% legal owner.

I have handled several cases involving PMRTs, both in the trial courts and the court of appeal, with high success, and would be pleased to discuss this case with you. Contact me for a further analysis (no charge), if you wish.