Legal Question in Real Estate Law in New Jersey
Half Owner?
About 18 years ago, I cosigned a loan for my brother which he used to purchase a multi-family home. I didn't realize it at the time, but he and I were on the deed and mortgage as co-owners. However, since I wasn't going to live there and he was going to live there, I never gave him any money for a down payment, mortgage, property taxes, repairs, maintenance, etc. but I also never received any money. Recently, he told me that he wanted to remove my name from the deed so he could refinance and/or sell the home. However, I am told that he must buy me out. Also, I was told that if I refuse to be bought out, I could request a partition and make him sell the house which would entitle me to 50% of any money left after the initial loan was repaid. Are there any down sides to me pursing a partition under these circumstances? Will I really be entitled to 50%? Seems to good.
1 Answer from Attorneys
Re: Half Owner?
It sounds as if your being on the mortgage and the deed was as an accommodation, to lend your credit to your brother. If you were a co-signer, the lender would require that your name also be on the deed.
If you were to bring a partition action,
1 - it would cost you legal fees, and
2 - it is unlikely that you would succeed in getting as much as a 50% interest, if any at all.
When courts hear partition actions, they take into consideration the contributions of each party.
Since you made no contributions, other than allowing your name and credit rating to be used, you would not likely get anything out of a partition.
There is no reason for your brother to "buy" you out. You are permitted to convey your interest to him. However, because there is a mortgage, you would want to be released from the mortgage.
The easiest way to accomplish this is for your brother to refinance, paying off the existing mortgage at the same time as taking your name off title to the home. You would sign a deed from yourself to your brother, and the deed would be recorded. All of this can be done at one settlement. The title insurance company insuring the new mortgage lender can record the deed.
This response is not legal advice, since I do not have all of the information that would be required, and I do not have a representation agreement with you.
* If the answers to your question confirm that you have a valid issue or worthwhile claim, your next step should almost always be to establish a dialog with a lawyer who can provide specific advice to you. Contact a lawyer in your county or township.
* Another reason for contacting a lawyer is that it is often impossible to give a good answer in the Internet Q&A format without having more information. The unique circumstances of your situation and things that you may not have thought to mention in your question may completely change the answer. If you want to be sure that you have a complete answer to your question and an understanding of what that answer means, establish a connection with a lawyer who practices in the area of your concern.
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