Legal Question in Real Estate Law in California

Re: verbal agreement real estate

What contract? How are you alleged to have breached the alleged contract?

Agreements to buy or sell real estate or otherwise transferring an interest in real property are required to be in writing in California (the so-called Statute of Frauds), otherwise they are usually not enforceable.

However, some courts will recognize an equitable interest in property where the person claiming an interest can prove that he/she contributed a substantial amount toward the purchase or toward the mortgage obligation.

From your question, it sounds like you have paid your agreed share to acquire the property and to make mortgage payments. Even if the friend can show an equitable entitlement to some share of ownership, he should be obligated to pay his share of the mortgage payments. If there is an enforceable agreement, arguably he is the one in breach and you should file a counterclaim for what he owes you, plus the consequential losses you will suffer due to his failure to make payments (though in this real estate market it might be tough to show a loss if there is no equity remaining in the house). Nevertheless, if the rental income from the property is sufficient to cover the mortgage, you could claim loss of your share of the rental income, if the friend's failure to pay his share results in foreclosure.

You should consult with a lawyer in your locality with experience in real estate transactions and partnerships.