Legal Question in Real Estate Law in California

Re: Lawsuit Delema Regarding Jointly Held Property

We would need to review all documents, contracts, and letters. The home can probably not be foreclosed against although a forelcosure could take place against your husband's interest. If the friend sues for the debt, the security is waived and the deed of trust would have to be cancelled, probably by cross-complaint. Please contact our office at 714 363 0220 if you want us to review your documents. We handle cases throughout California and can help you by phone and fax.

Re: Lawsuit Delema Regarding Jointly Held Property

Likely. Debt acquired during marriage is presumed to be community debt. Your best chance of dealing with this is providing payment.

Re: Lawsuit Delema Regarding Jointly Held Property

You say you are "joint owners;" this could mean that you are joint tenants, but more likely you hold the house as community property. The law is somewhat different depending upon how title is held.

Assuming community property, the Family Code requires any sale or encumbrance of community real property to be signed by both spouses, and if not the sale or encumbrance is unenforceable by way of, for example, foreclosure.

Nevertheless, the debt may still be valid, even though a foreclosure against your house is barred. The colleague could sue both of you, get a judgment, then seek to enforce the judgment against community assets including the house.

So, the contract won't hold up to the extent it resembles a mortgage. To the extent it is an ordinary loan agreement or business deal, the fact that one spouse signed it maybe isn't going to make a difference in the long run. Nevertheless, there may be additional defenses to the contract that can be raised in court to prevent the colleague from winning.

Prevention of foreclosure -- i.e., prevailing under the law requiring both signatures -- should be handled by an attorney who has had an opportunity to review the contract and see whether it purports to be a deed of trust, etc., and what provisions for notice, etc. are written in. Most likely, it is seriously defective and an attempted foreclosure wouldn't get far, but don't count on it.