Legal Question in Real Estate Law in Massachusetts
Joint ownership of property at a loss.
I purchased a house with my sister one year ago for $400K. My sister placed $40K as a down-payment. Her and I split the mortgage, utility, homeowners association fees, etc. payments equally (50/50) during the year. The estimated value for the house today is $360K. I am interested in getting my name off the mortgage/deed. My sister will retain ownership of the house. As such, she will have to re-finance. Legally, do I owe my sister 50% of the initial down-payment and the 'unrealized loss' (variance between the sales price and the appraised property value)? Said otherwise, are both owners in a joint ownership arrangement liable for the down payment even if the house has not sold? Is it customary for the individual requesting to be taken off the mortgage to pay half of the house's loss?
1 Answer from Attorneys
Re: Joint ownership of property at a loss.
Given the size of the investment, you may want to retain an attorney to assist you in negotiating and preparing a buy-out of your ownership interest.
Certainly, you would be entitled to the benefit of any increase in value of the property. Likewise, ou may actually owe her money if the property has suffered a loss in value. Similarly, she would be entitled to a credit for the $40,000.00 that she put into the property in the form of an initial down payment.
You should attempt to work something out with her. Failing that, she has the right to commence a petition to partition in court. Don't hesitate to contact my office if you would like to discuss this further.
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