Legal Question in Real Estate Law in California

It is important also who is on the title to the house and how title was taken because you might have the right to half the value of the house.

The starting point would be to review the terms of the agreement between you regarding your becoming co-owners of real estate and co-borrowers on a loan secured by the real estate. Hopefully, the agreement is complete and in writing; it need not have been notarized.

More likely than not, you don't have anything in writing, and no clear oral understanding as to what would become of the property when you broke up (I say "when" rather than "if" because eventually one partner will pass away and that leaves the same unresolved situation as parting while both living).

After considering the effect of any agreement between you, and other writings such as your purchase contract, loan application, etc. which might shed some light on the parties' intentions at the time of acquiring the property, the next step in figuring out what to do is to get some market and other economic information. Is the property "under water," or is there some net equity in it that can be salvaged? What is the market trend? Would rent cover the expenses? Would the lender renegotiate the loan? Which co-owners have income or other assets, or a credit rating worth protecting?

This information bears on strategies such as filing a lawsuit for partition, attempting a short sale or loan renegotiation, letting a foreclosure occur, etc.

Next, how well do you and your ex communicate? Does he understand the situation? Does he want to assume the loan and keep the property? Can he pay the whole tab?

Finally, if there is equity in the property, it might become an issue as to whether the ownership is 50-50 or maybe one or the other of you could assert a greater percentage of ownership, despite how title was taken. Sometimes, beneficial ownership follows down-payment money, and if you paid the whole down payment, perhaps you could assert a purchase-money resulting trust and claim 100% ownership.

The law provides a remedy for unhappy co-owners of property that want to bail out and where the other owner(s) either don't want to sell, don't want to buy out or be bought out, or can't afford it. The remedy is a special kind of lawsuit called a "partition action," and it asks the court to order the property sold, the liens paid off, and the net proceeds (if any) distributed to the former co-owners according to what is shown in trial to be fair.

Meanwhile, so long as you are co-owners, either or both of you may have possession and neither can demand rent from the other.

The short answer is that you are co-owners in a legal partnership that has invested in the house. From there, however, it gets complicated.

Ms. Szawarc seems not to have read your question carefully, since you said you own the house with the ex. She is correct, however, that how title is held, as shown on the deed, my have some impact on your rights. More important, however, will be the financial arrangements, circumstances and conduct from when you bought the house to the present. Since any normal form of title you would have taken if you used a reputable real estate agent and title company will result in the same legal rights as far as title is concerned, how you obtained and conducted ownership will be more significant.

When an unmarried couple buys real property they effectively form a business partnership in the eyes of the law, not because they meant to do that, but because the law has to put a label on things and that is the label that most closely fits the legal situation involved. It is particularly handy from the legal system's standpoint because there is long standing authority that when two people enter into a business or investment together and don't form some other business entity, the law of partnership automatically applies. So it is easy to extend that to investment in real property bought by an unmarried couple. The next step is that in the absence of a written partnership agreement, the law will look to the verbal agreements and the conduct of the parties to determine the terms of the partnership. That is why how you made your financial arrangements when buying and then owning the house will be important to your exact rights.

So what you are facing is the legal equivalent of dissolving a partnership, only when the only thing a partnership involves is co-ownership of real property they call it a partition. This is because way back when land was generally owned in such large plots the courts would just divide it. Now, with the extensive regulation of subdivisions, partition is usually done by sale of the property under court supervision and then dividing the proceeds based on the partnership rights of each person. Often, rather than go through that, when a partition action is filed the parties just settle the matter with one person buying the other out. Sometimes, knowing one or the other will have to file a partition action, they just work out a deal before the suit is even filed.

If you and your ex would like to work out a settlement for dealing with the house, I have two conference facilities in the Sacramento area, and would be happy to provide mediation services to help you work out a mutually acceptable arrangement without the need for a partition action, attorneys fees, etc. I have nearly 25 years of real estate law experience and have been helping people settle real estate matters as a mediator and judge pro tempore since 1993.