Fraud from a business partner in MD
I started investing with a partner in residential real estate years ago. We purchased several properties, together in both of our names, titling them as either Tenants in Common or JTWROS. I invested almost everything I had in the houses, and it was ultimately supposed to be for the financial benefit of my son who would be going to college years later. More than halfway through the acquisitions, a surprise drunken revelation by my partner that she was "married". Long story short, when confronted she back-peddled to say she wasn't married, then was "married to an illegal immigrant". Concerned for my property rights with a potential husband in the picture, I pushed that the matter be resolved. I was then told that it was a fictitous Vegas marriage made with false credentials, and that I would "never have a problem with anyone asserting rights". Now that the housing crisis has caused values to be underwater, my partner has been taking/keeping tenant rent payments for over a year now (despite the 1-4 family riders we signed stating that it belongs to mortgage companies after default), not making mortgage payments on the houses, and has filed for Chapter 13 to try to dump the houses. This would put the full brunt of things onto me, in the end.
My partner signed mortgage documents as "single". Documents obtained show her having her "husband" sign off on retirement forms at the same acquisition time period so that she could name other beneficiaries.
There is so much more to this... fictitous marriage, disability fraud, State tax evasion... this person has had a long history apparently of doing whatever she needs in order to benefit financially.
My question: is there any sort of area of law that could be used in order to go after her for my reliance on what is clearly fraud on her part? I certainly have enough information to destroy her credibility and that paint a clear picture of her character. Government agencies "are what they are", and due to cutbacks, etc, they seem time-stretched and unable to do things despite being handed clear evidence. Her bankruptcy filing stays my attempt at filing in court for the rent monies being collected. If a woman can file in court against "the other woman" for alienation of affection, surely there is something for what I'm experiencing? Again, this is Maryland. Any suggestions are appreciated. I use the word "business partner", only to indicate that we bought these houses together. However, the houses were purchased with BOTH of our names, and NOT in the name of any business or legal entity. I am a victim of this person's fraud and lies.
Answered on: 9/01/12, 11:27 am by Cedulie Laumann
Hi and thanks for your post.
Unfortunately an online board is designed to provide general legal information on a topic, not a detailed analysis of a particular set of facts.
That being said, Maryland law does provide a way to extricate oneself from jointly owned property by means of something called a sale in lieu of partition action. Maryland is not a community property state and the marital status of a co-owner (whether married or single or posing as one or the other) shouldn't affect the remaining owner's interest and rights. A lender may have a cause of action if someone falsified loan documents. In certain circumstances, fraud or misrepresentation might give a co-investor a right of action, but those scenarios are very fact specific. Character generally cannot be used as evidence in business or real estate litigation.
One reason why lawyers constantly encourage folks to get legal advice before purchasing a property is to avoid the type of difficult scenario you describe. A properly formed LLC may have prevented the problem by divesting the bankrupt member of ownership interests once they filed for bankruptcy.
I hope this general information helps. You are encouraged to seek legal advice on your situation. Nothing in this answer creates an attorney/client relationship or attempts to offer specific legal advice.
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