Legal Question in Real Estate Law in California
Family Real Estate Problem
My brother bought a home in Fresno, CA almost three years ago. My sister-n-law helped him clean up his credit so he can buy the house. They were supposed to buy the house together but he decided not to and she agreed. She is now claiming that he owes her $15,000 on the appreciation of the home and he breached his contract. Nothing is in writing. She did not outlay any cash. He transferred his credit card debt to me, in order to find better interest rates. Question #1: Does she have a case? Question #2: Is it illegal to transfer credit card debt to others?
Thank you!
2 Answers from Attorneys
Re: Family Real Estate Problem
Agreements regarding real property, such as the one your brother entered into, must be in writing to be enforceable. The sister in law does not have a good case, but that is not a criteria to file suit--anyone with the price of a filing fee can start a lawsuit. However, I do not know what is meant by "helping him clean up his credit"; if there was any fraud involved, i.e., falsification of income, assets, debts, etc., then your brother is at risk from the lender who relied upon the credit data to make the loan, and if your brother falls behind in payment they will scrutinize the file and if they find inaccuracies, he could be prosecuted for loan fraud as well as be civilly liable. Likewise, the only way to legally "transfer" credit card debt is through an agreement with the credit card company. If you are saying you paid off your brother's credit card debt, that is not a transfer, that is the act of a foolish person. And, since your brother did not honor his verbal agrement with your sister in law, what makes you think he will honor his debt with you?
Re: Family Real Estate Problem
I would say the answer to #1 is NO. In addition to the reasons cited by Ms. Deming, if it is indeed true that "she agreed" (that they would not buy the house together) that would terminate any contrary earlier agreement. When there is no agreement, no down payment cash was put up, and she isn't on title, there is no case. Of course, she could file and force your brother to defend, but if the facts given are true and can be proven, and there are no contrary facts, he will win.
As to question #2, there is nothing illegal or improper about Tom paying Dick's credit card debt. If Tom gets the money to do that from his own credit card, that's also OK. Is the pay-off a gift from Tom to Dick, or a loan? If it's a loan, it must be disclosed on Dick's credit or loan applications, even though it's brother-to-brother. Failing to disclose any debts on a credit or loan application is fraud.
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