Legal Question in Real Estate Law in California

Re: Real estate investment partner won't cooperate

You should sue or threaten to sue. You can either sue for partition of the property by sale (if you are an owner) or sue for indemnity/reimbursement (if you are just a guarantor of the loan). Either way, she will likely come to her senses. Even a letter drafted by a lawyer may do the trick.

If you would like our help in this, let us know. We have handled similar matters for clients in the past.

Re: Real estate investment partner won't cooperate

If you are both on title, you can sue her for partition of real property, but it takes a great deal of time before a lawsuit gets to trial; if you have the time and can make the payments in the interim, then keep it current and go ahead and sue. If she is not on title, then you don't need her to sign anything; if she is the only one on title, then you have an uphill battle showing you have any interest in the house. It is not impossible, but very difficult and you definitely will need to go to court and sue under a theory of resulting trust (assuming you want to keep the house) and/or breach of contract with her, and other theories may be viable.

I guess you can see why she had "bad credit" and that should have been a tipoff not to enter into any financial dealings with her.

Re: Real estate investment partner won't cooperate

Well, now you know why she had bad credit. The starting point here would probably be to determine whether the house deal is really a partnership or not, i.e., whether partnership law would apply. The answer is maybe; it would depend upon how you intended to wind up your investment and share the proceeds. Not every co-investment in real estate produces a partnership.

The second issue is whether you are shown on title as, for example, a tenant in common or joint tenant, or whether you are merely a guarantor.

The answers to the partnership and title questions will go a long way toward determining your rights.

Was your investment (cosigning) part of a purchase, or a refinancing? I'll assume the former.

Another issue is whether you made any contribution to the down payment. Often, making part or all of a down payment without getting any, or too little, a portion of legal title will give rise to a so-called resulting trust and you would be deemed to be the beneficial owner of a piece, or a larger piece, of legal title.

Another important but omitted fact is who is in current possession of the house?

Was there any written agreement? Do you have copies of various documents in your possession, such as the loan application and agreement? Are you shown as a co-borrower or a guarantor? A creditor's remedies are different between these two, and also between a purchase-money and a re-fi loan.

Is there much equity in the house?

Your position looks pretty weak, but it is not hopeless. Giving you really useful advice would depend upon a lawyer's having full answers to the questions posed above. Please feel free to contact me directly to give me the missing info, and I'll give you an additional no-cost opinion.

Re: Real estate investment partner won't cooperate

If a stern letter from an attorney does not work, you may have to file a partition action. This does not mean that you have to complete the lawsuit. Sometimes, the filing causing reconsideration of the problem owner. Please call me if you have any questions.