Legal Question in Real Estate Law in California

I would have to know a lot more about the deal to make any recommendations about how to structure it. It would depend on a lot of factors including current equity and debt on the property, risk allocation preferences and financial capacity and objectives of both parties. I am headquartered in Walnut Creek, but also maintain facilities in San Francisco. I have over twenty years of real estate law experience, including six years as a vice president of Fidelity National Financial, parent to Fidelity National and Chicago Title Companies. I would be happy to assist you with this.

A deal like this can be structured, but its drafting would have to take into consideration two types of practical problems.

The first is that long-term arrangements, especially between parties unrelated by blood or marriage, have a tendency to become stressed and strained as the years go by and the parties' interests, objectives and finances change, so any deal would have to contemplate a range of future changes of mind or status and how each would be handled to keep the parties out of court.

The second category of potential problems is that, by and large, the real estate world is not geared up to cope with ever-changing shares of ownership. Sure, there are examples, such as the "pro tanto" community-property interest that develops when a married couple uses earnings during marriage to pay mortgage principal on an originally separate-property home. Nevertheless, there are issues lurking with respect to such various matters as the public record not reflecting ownership percentages correctly, apportionment of expenses such as property taxes and insurance, division of insurance proceeds if a claim is made on the insurance, splitting rents received from third-party tenants, who will have the right to possession (coowners have equal rights to possession absent an agreement to the contrary), obtaining new or re-financing (and paying existing financing if any), dealing with a due-on-sale clause in existing financing, and deciding when it's time to sell. There may also be issues regarding who may depreciate the property (if either) and who is entitled to various deductions such as mortgage interest.

I practice business and real estate law from an office-at-home in western Marin County (Tomales) and I would be pleased to discuss your objectives and how best to achieve them with respect to this property.