Legal Question in Real Estate Law in California

Re: Mortgage

Should you split up? Geez, this is LawGuru, not Ann Landers! OK, I understand that by "should we split up" is meant in the sense of "if we were to split up" and not "ought we split up?"

Here's a lawyer point of view. First, as you seem to know, business and real-property deals between folks who aren't married or registered domestic partners are usually treated in court pretty much like routine contract or maybe partnership situations, without a whole lot of regard for the boyfriend-girlfriend setting. While not totally true, it's probably best to analyze and set expectations based on this being strictly bizniss.

Therefore, a court's first take is going to be to look for the agreement. It may be hard to find here, since you probably don't have an express written agreement covering either the purchase or the later deal covering his making interim payments.

Now, let's look at the proposed deal. You paid the down payment - therefore, any equity in the house is probably the result of that, not appreciation - so, the cash-out refinance would pull out your equity, and as I see it, that should all go back in your pocket. However, since the boyfriend seems to be the proponent of this deal, it seems somewhat likely to me that the 80,000 bucks would, perhaps, more or less slide into his separate bank account. Uh-oh.

What's going on with your house? Why is it sitting there empty? That's money down the drain. Maybe you should talk to a professional property manager in your area about getting the place rented at market value. The rental market is NOT in a tailspin like the resale market. Those folks who got foreclosed out of their homes are now in the rental market.

There is a legal principle called "purchase-money resulting trust" that says when a piece of real property is bought with X's cash for the down payment, but X and Y end up as co-owners, it is presumed that X is the true 100% owner, despite what the record down at the courthouse says, unless and until it is shown that the co-ownership was intended because of a contract between X and Y, or because X intended to make a gift of a 1/2 interest to Y, who perhaps is his son. The presumption of a gift does not usually arise in a boyfriend-girfriend situation (or even necessarily in a husband-wife situation). The upshot is that a court MIGHT find you to be the 100% owner of the house, notwithstanding the loan, and despite title showing on the records as tenants in common, joint tenants, or whatever.

I'd bottom-line this for you by saying you should view these past transactions, and any future deals, as strictly business....use written contracts the terms of which are based on hard-headed business reasoning, not long shots on future domestic tranquility. And take two aspirins and call me in the morning.