Legal Question in Real Estate Law in California

Re: House buyout

Sorry...but I may have to come down on dad's side in this situation. Without the down payment, would you have been able to buy? Did you use his credit to qualify and is he obligated on the loan? These are very valuable contributions, as anyone can make loan payments, but not everyone can get a loan. Did you two have an agreement to split equallly prior to the purchase? Lastly, you do not say whether you were living in the house during the period of ownership; if so, you received a benefit he did not, as you would have had to pay for housing elsewhere and thus you saved whatever rent you would have been responsible for paying.

Re: House buyout

But, what was the agreement? Was it to split the equity? Just because someone only puts the downpayment and it is only 30%, does not mean they get only 30%; it depends on the agreement. While the downpayment is only 30%, that is the upfront money and could be considered "worth more" Therefore, his position, alone, is not irrational.

Re: House buyout

So, I guess the two of you co-purchased an investment property.

If this were tried in court and properly decided, I believe the split of the net proceeds of sale (after commssions, paying off liens, etc.) would be determined as follows:

(1) Any explicit written agreements would be given full weight.

(2) Absent any agreement to the contrary, the net proceeds would be split in proportion to the down payment (cash) contribution of each.

(3) Subject, however, to the right of any co-owner who paid an excess percentage of the necessary expenses (mortgage, property taxes, insurance, necessary maintenance and jointly-agreed-upon improvements) to dollar-for-dollar reimbursement of his excess outlays over what the other laid out.

There are other adjustments possible as well, e.g. an owner in possession must account for net rents received from third parties and fork over a fair share of the profits.

However, it is contribution to down payment that governs split of profits from appreciation (or loss from depreciation), whereas everything else is adjusted on a dollar-spent, half dollar reimbursed basis.

Again, if either party can prove the existence of a contract, or the giving of a gift, that would trump the other rules.