Legal Question in Real Estate Law in California

Yes, it would seem on the facts that you present you could sue your mother and attorney for fraud [3 year statute of limitations], negligent or intentional interference with business activity [1 year?], breach of contact [2 years], unjust enrichment, etc. tranfers in real property interests are to be in writing, but if the parties act as though there was such a transfer then it may still be binding. If you can show that you made mortgage, insurance and other types of home owner payments, that would help demonstrate the agreement. If you paid no rent or no more that what would be 50% of the fair market value, then that would help show that you were an owner. If your mother failed to claim your payments as rent on her taxes, then she could be in trouble with the IRS if she wants to push her claim of sole ownership; even if you were a renter and not owner who was not paying any or not the full fair market rental value, the IRS could impute a fair rental income onto her personal reported income. In her deposition she would have to explain why one should believe in her honesty when she lies under oath to the government. How the property was originally transferred to you might also effect whether it should have been re-assessed [even if the parent-child exception applies].

If the attorney actually told her to lie to you with having the default request already prepared [just a few lines on a form one page paper], then he/she has overstepped their role as an attorney and have committed a fraud, which would be reportable to the State Bar and most of the judges in that court would learn of what happened and he would not be trusted by the judges.

This, however, is not the type of case that should be brought to trial because of the bad effects it would have on your relationship with your mother. If what you have said is factual and there are no other reasonable explanations, then you should be able to get them to settle for some of your losses. You, of course, have fault also in not acting to prevent the default, and in believing the crazy story your mother told you, but that might technically have an effect on how much you should recover.

If you want, I could help you on this matter. Most of the work would be just done in my office so my not being in your geographical location should not matter much, certainly not initially. You can call at 510-441-2684.

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Mr. Shers raises some interesting points, but misses a few others.

First , can we establish that the property is owned by a partnership? Partnership agreements don't need to be in writing; they are established by conduct by the partners that resembles what partners do. Further, as a practical matter, there is no statute of limitations on lawsuits by a partner against another for dissolution of the partnership and distribution of its assets. Finally, partnership law demads fair treatment of the other partner(s) and provides remedies for abuses of this kind.

Property used in a partnership business may become partnership property, without benefit of a deed, bill of sale, etc., if the facts sufficiently show it was part of the partnership's capital.

I hasten to add that not all co-ownership of real property gives rise to a partnership, even when it is rented out and the expenses and income are shared by the co-owners. The rules for distinguishing a partnership from ordinary co-ownership of income property are not distinct, but my review of the cases suggests that the initial intention of the co-owners to be in business together may be controlling in at least some cases, in contract to accidental co-ownership, e.g., where siblings inherit the property.

Next, we should look at the sources of the down payment. There is a principle called "purchase money resulting trust" under which a court can find that ownership of real property depends, not on what the recorded deed shows, but rather upon who made the down payment. If two people contributed equally, they are probably equal co-owners as tenants in common, notwithstanding that only one name shows up on the deed.

Finally, special rules of interpersonal conduct apply to people who are in a close, trusting relationship, e.g., mother and daughter. The relationship resembles (and often is) a fiduciary situation, demanding openness and fidelity in financial dealings, and anything else may be treated as fraud when it works to the disadvantage of one and the advantage of the other.

I would invite you to contact me directly by e-mail to [email protected] or by phone at 707-878-2230 with some additional information such as how the acquisition was paid for and by whom, and anything showing the business-like nature of the co-ownership, and I can give you a better analysis of how to proceed in court, with no cost or obligation.

I should add that when one co-owner kicks out the other co-owner, the legal term for this is an "ouster" and the remedy, or at least one of the remedies, for an ouster is provided by Civil Code section 843.

Co-owners have a legal right of co-possession, and absent a contract between them to the contrary, one cannot kick out or evict the other.