Legal Question in Real Estate Law in California
tenancy in common 2
When a property (in this case 1 condo with 2 owners) is under water and one partner wants out (because of a loss of a job and no longer lives there) and the other does not is there any way out. When the housing market was booming 1 partner could force a sale and divide the proceeds. Now the property has lost so much value that neither has the ability to pay the difference between loan and value. The partner that doesn't want to sell refuses to fill out any paper work to determine if the lender will accomodate a short sale. That same partner is paying the full mortgage anticipating that eventually they will be able to sue for the rest. Any suggestions?
1 Answer from Attorneys
Re: tenancy in common 2
Hard to say, because it borders on giving personal advice rather than legal information, but the following possibilites come to mind:
(1) One of the co-owners files for partition despite the property being under water. The lender must be made a party to the suit per Code of Civil Procedure section 872.510.
(2) How's the rental market? Maybe the condo could be rented and everyone move out for the time being.
(3) Get a roommate?
(4) Wait out the market. Someday the property will no longer be under water, either because the market rises or the mortgage gets paid down, or both. In other words, prolong the status quo.
(5) Refinance at a lower interest rate.
(6) One owner buys the other out voluntarily, using IOUs instead of cash.
(7) One or the other or both co-owners abandon the property to the other or to the lender.
(8) Ask lender to re-write loan, with or without cooperation of co-owner. If terms are good, co-owner might sign papers as alternative to status quo.
There may be other possibilities, but I think these are the options, and each should be considered and scored and ranked for its overall merit. Then try the one with the greatest merit or the least pain and suffering, if that be the case.
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