Legal Question in Real Estate Law in California
Home property co-owner rights
A few years ago, my husband and I purchased a condo unit and obtained another party to help us to secure a loan. We would now like to file a quit claim to remove this person's name off our property note. To do this, we were told that we either sell our home or obtain refinancing. Whatever option we choose, is it true that the third party is legally entitled to 50% of whatever equity/profit we make? Since there were 3 signatures on the property note, can we get this person to settle for 1/3?
3 Answers from Attorneys
Re: Home property co-owner rights
First of all, it depends on how the deed to the property is worded. You cannot just remove someone from the note, only from the title to the property using a quit claim deed.
What was your agreement with this person? Was he just a co-signer, or was there a formal agreement for joint tenancy. No written agreement makes for difficult situation, and the wording on the Grant Deed will most likely prevail.
Re: Home property co-owner rights
The profit will be split according to whatever was agreed when you bought the condo. If there was no explicit agreement, orally or in writing, the deed may help interpret the parties' intent. If you and your husband are tenants in common with a 50% interest and the other party hold the other 50%, then that is how the profits will likely be split.
You need to show all your documents including the deed to a real estate attorney and discuss the facts in more detail. Good luck.
Re: Home property co-owner rights
I've just returned from vacation, and it may be too late for my two-cents-worth to be helpful.
However, just in case, let me suggest that you need to separate in your thinking matters that relate to ownership of the property on the one hand, from matters relating to obligation on the mortgage loan on the other.
You (or more likely your lawyer) can determine ownership rights from review of the deed itself and any agreements, preferably in writing, made between the parties, and also from the source of the down payment money. There is a rule called 'purchase money resulting trust' that often gives substantial clout to the party that provided the up-front cash for a purchase.
On the other hand, obligation on a loan (deed of trust, mortgage) is determined with reference to the promissory note and related documents. Liability can be either several or joint-and-several depending on the note's wording.
The concepts of ownership and loan liability are separate.
Ownership disputes can be resolved by negotiation, quitclaim deeds and/or resort to the courts through a partition lawsuit. Loan problems are usually best resolved through refinancing, and if you do this be sure to use a professional escrow service to get the documentation right.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
