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| CRE Online > Real Estate Law > Bill Bronchick > Question and Answer |
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Question from Paul Hart :
Eighteen Months ago we did a favor for a good friend of ours. Because of her divorce and bad credit, we used our credit and her money to buy her a house. Though no contracts were ever signed, it had all the components of a lease purchase agreement. Well, as sometimes happens, our friend had gone "squirrely" and now we are in court. We don't now and never have had any intention of taking her non-refundable earnest money. However, as the rightful and legal owners, we DO want to protect the appreciated value of the property in the year and a half we've owned it. She is now obtaining financing. What (lien) can we file to ensure we get the increase in equity (approximately $7500). As you know, in a standard written lease purchase agreement, if the house is worth $100k at the time the agreement begins, and the agreement is to be 18 months long the "sales" price would be i.e. $105k, or whatever, but an amount that would include future appreciation. Again we had nothing in writing. Answer By William Bronchick: I assume that your ex-friend took title to the property and you co-signed on the loan. If so, she has a legal ownership in the property as to the whole. The money you lent her was not in writing, so it would be presumed a gift unless you could prove otherwise. If you are on title as well, then you are a part owner of the property. Remember that with few exceptions, all agreements as to realty must be in writing to be enforceable. You can start a lawsuit and concurrently file a lis pendens (would prevent a refinance), but you must prove your case in court. This may be very difficult without anything in writing. Disclaimer: The foregoing is not intended to be given as legal, financial or tax advice, but intended for instructional use only. If you require legal, financial or tax advice you should seek the assistance of a qualified professional.
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