Legal Question in Real Estate Law in California

Re: Who's Home Is It Anyway?

It depends on what the contract precisely says. What you indicate is that he has the right to buy your mother out. Since she is on title, she has the right to possession, just as he does.

As to what he would need to pay her is open to debate, depending on what the agreement says. If he cannot buy her out, then it is possible that she will have the right to buy him out.

There is a need to determine what the contract says and if a mutual agreement can be reached. The only other option is to take the matter to court.

Re: Who's Home Is It Anyway?

First, I assume (without knowing) that mom and friend own the house as tenants in common, with either no percentage specified or the percentage ownership of each specified as 50%. It could be otherwise, but probably isn't.

Next, you say they drafted a contract. Did they sign it? If there is a written agreement between them, it can be very important, not only in determining their rights to the property, but also their remedies and defenses to a lawsuit to partition the property.

If the contract is notarized as well as signed, it is even more powerful, because it can be recorded and thus becomes notice to all of the rights and interests set forth therein.

As to current possession, joint tenants or tenants in common both (or all) have a right to non-exlusive occupancy of the entire property. Therefore, unless the contract says otherwise, neither of them can oblige the other to leave.

Next, despite the likely fact that legal title is probably 50-50, the down payment percentages are important. There is a doctrine called 'purchase money resulting trust' that says, in effect, that when X gets legal title to property by using Y's money, X holds title in trust for Y unless the circumstances show that a gift was intended, or that a contract between the parties shows that some other result was intended. The bottom line is that despite the legal title, the intent of the parties at the time of purchase may control the question of who owns the property, and in what proportions. The proportions of the down payment are therefore quite relevant if not totally decisive.

When co-owners cannot get along, the usual remedy is a lawsuit for 'partition,' which is a court order requiring the property to be divided (if reasonably possible) or, more frequently in modern times, to be sold and the money divided. The division is not necessarily 50-50; it can be in whatever proportion is fair in the court's view after hearing all the evidence.

A co-owner can defend against a partition action, however, on the ground that he or she has a right of first refusal or an option to buy. The party so defending should be in a position to carry out the purchase if called upon to do so by the plaintiff or the court.

So, based on this bit of law and the terms of the contract, you might be able to figure out what may happen in court. I suggest that your mom ask for a free consultation with a local real estate attorney who can review the contract and advise.