Legal Question in Investment Law in California

ownership

I bought our house in my name only with only my own credit and an inheritance from my parents. I am thinking of divorce but my husband says he won't leave the house because its his.


Asked on 1/22/06, 3:48 pm

2 Answers from Attorneys

Christopher M. Brainard, Esq. C. M. Brainard & Associates - (310) 266-4115

Re: ownership

Who has been paying the mortgage and from what funds?

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Answered on 1/22/06, 4:19 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: ownership

Ownership of the house probably isn't 100% your separate property, nor is it likely to be 50-50 (i.e., 100% community) property. By far the most likely scenario is that you own a percentage as your separate property, and your marital community owns the rest.

Source of the down payment and the identity of the marital partner whose credit was relied upon are indeed determinants of ownership (separate or community), but so is source of money used to reduce the outstanding principal balance, and, of course, the timing and amounts of money.

If you made a large down payment from your separate money (e.g., your inheritance), and only a small reduction has been made using community funds (such as either of your earnings during marriage) in principal on the loan balance, the scale would tip heavily toward a high separate property interest.

Also, you don't mention whether the house was bought before or after marriage. This is critically important.

An apportionment formula such as the so-called Aufmuth method would be used by a court (see In re Marriage of Aufmuth (1979) 89 Cal.App.3d 446) and the community would be awarded a so-called "pro tanto" interest based upon the portion of total equity represented by community-paid reductions in the loan balance (interest and taxes are, however, generally not considered). Since in the early years of a mortgage the balance reduction is small (and in recent years, often nil in interest-only loans), the community interest may be quite small.

Although this approach is pretty well decided law in California, and has been for about 25 years (see In re Marriage of Locas (1980) 27 Cal.3d 808 and In re Marriage of Moore (1980) 28 Cal.3d 366), scholars are still debating whether the formulas approved in Aufmuth, Moore and Lucas are fair, or whether the law needs change.

So, I would say that as long as you are married, you probably don't have a legal basis to "evict" your husband, because, possibly among other reasons, he has a sufficient possessory interest to be immune from eviction; but, in a divorce proceeding, you would be awarded a very high proportion of the value of the house, certainly more than half and possibly 100%, but more likely somewhere around 90%. As I said, the formula would take into account sources, timing and amounts of separate and community contributions to purchase money and principal reductions.

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Answered on 1/23/06, 1:37 am


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