Legal Question in Real Estate Law in California

Re: Real Estate deal with Ex smells funny

Oh-oh!!! This situation has fraud written all over it. There may, of course, be an innocent explanation for all of this, but on first impression all kinds of red flags pop up.

First, as a co-owner, you are entitled to periodic accounting for rents received, and your share of the net rent earned.

Second, although the co-owner can grant his share of a co-owned property to his own trust without your approval, your interest cannot be placed into an express trust without your taking some affirmative step, i.e. signing a deed or transfer to trust.

Next, any well-drafted contract or other instrument will have all the parties' signatures on the same page. Usually, some portion of the last part of the text of the document will also appear on the signature page to provide some continuity. The pages should be numbered "Page X of Y Pages" and the paragraphs or clauses should be consecutively numbered or lettered as well. Sometimes, e.g. in real estate, the parties are to initial each page, although this is not so common in business contracts.

Double escrows are used to close two consecutive but interdependent transactions. Most likely here, this guy has made a deal to sell the property as sole owner, but before he can close, he has to acquire your (and your ex's?) interest(s).

If you have not participated in negotiating all this, and do not know all the particulars, you are at risk of being cheated.

One co-owner of property can take out a loan on his interest in the property, if he can find a lender willing to accept a fractional interest as collateral. There are examples of this happening legitimately, but often the lender is either unaware of the additional owner(s) or the borrower has surreptitiously acquired full title.

I think all aspects of this situation - payment of rents, status of title, nature and terms of the proposed deals which are poised to go through this double escrow, whether there has been a breach of trust or breach of fiduciary duty, and more, need to be investigated before you sign anything.

I'll bet your co-owner isn't using a lawyer or real estate broker. If he is, that person may be unaware of the shenanigans or is risking his or her license, or both.

How much time do you have until the escrow(s) are supposed to close? It would be advisable to complete the investigation before the proposed closing date. It may also be advisable to file a lawsuit and perhaps record a lis pendens on the property before any improper transactions take place and get recorded.

I pass through the Sacramento area often enroute to clients and personal business affairs. I'd be willing to give you a free consultation in your neighborhood; contact me if interested.