Legal Question in Real Estate Law in California
I purchase a house in CA with the help of my parents in February 2009. The verbal agreement when I purchased the home was that they would live in the house and pay me what they were paying as their monthly apartment rental fee (which was about $1,400 per month). But after moving in March 2009, both of my parents lost their jobs and couldn't afford to pay, so I let them live there for free. When it became difficult to manage the house in Downey and my marriage living expenses (I think March 2010) I've asked my parents to move out into a one bedroom apartment so I could sell the house. But they made excuses and did not move out. So I was stuck paying for the Mortgage payment ($1,800 per month, and approx $5,000 year on home tax). So I drew up a rental contract where they would pay me $1,400 a month from April 2010 to November 2010, under the condition of if they can't pay me the rent or skip a month/s rent, I would take it out of what they contributed to the purchase and repair of the house (approx $13,000). They both signed it sent it back to me in May 2010 and started paying me in June 2010 not skipping a month. Now it�s May 2011, and I am trying to sell my house, they are still living in the house, and won't cooperate with the realtor by not showing the house if they are even 10 mins late and won't let the realtor hold a open house. I went ahead and told the realtor to give my parent the eviction notice to 5 June 2011. If they don't move out then, and I have to take this to court, how long will the preceding late? And do I have to pay them the $13,000 back when they move out? (I can't afford to right now because I am standing to lose a lot of money by not being able to sell the house because they refused to move out). Please help.
1 Answer from Attorneys
Your parents have a defense, if their lawyer is clever enough to figure it out. Under the facts given, they apparently made a contribution to the down payment for the house. Unless they intended to make a gift at the time, which seems unlikely in view of the other facts that this was pretty much a business deal, they are owners (or co-owners) to the extent the contributed to the down payment. If the total down payment was $30,000, and $10,000 of their $13,000 was used for the down payment, they are one-third owners, regardless of what the recorded deed might show. Of course, they are only "equitable" or "beneficial" co-owners; "legal title" is as shown on the deed and they would have to go to court to establish their co-ownership through a pleading and competent evidence.
The legal principle is that, by paying part of (or all) the down payment, they were entitled to ownership, and the ownership shown on recorded title is held by you as an involuntary trustee for your parents. This is a "purchase-money resulting trust" and can be researched under that name via Google or legal search services.
As co-owners, your parents are entitled to co-possession of the house with you, and do not need to pay rent unless they have separately agreed to pay for sole possession. Further, you could sue them for co-possession, but you cannot evict them.
There is no certainty that, if sued for unlawful detainer, your parents or their attorney would figure out this line of defense, but you should be cautioned that they might.
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