Legal Question in Real Estate Law in California
My sister had a verbal agreement with ''friends'' . They put up money for the house, she made all the morgage payments and property taxes, they would quick deed. Its been 2 years, they decided not to quick deed ...she has made major improvements on the house and now they refuse to put it in her name. House value at 1,500,000.00. She is out thousands of dollars. What should she do
5 Answers from Attorneys
Wow, your poor sister. I assume your sister's name is not on the deed? What does the Trust Deed in favor of the mortgage company say?
The best thing to do is to find a lawyer that is knowledgeable in this area and that your sister is comfortable with.
There are several possible approaches to handling this matter in court (or in negotiations prior to filing a lawsuit, if possible).
First, some lawyer is probably going to point out to you that there is no such thing as a "quick deed" - the proper term is "quitclaim deed" which is a type of deed in which the grantor surrenders or "quits" his claim to the property in favor of the grantee. The other major type of deed is the "grant deed" and the main difference is that the grant deed includes an implied warranty by the grantor that he actually holds the interest conveyed, whereas the quitclaim deed carries no warranties of title but merely says, in effect, whatever title I had is now yours.
OK, now let's go to your facts. This arrangement sounds like a partnership, and fortunately for your sister, no express agreement is necessary to create a partnership. It doesn't even require an express oral agreement. Partnerships can be and are formed by two or more people getting together and conducting business and behaving as though they are partners, and having an apparent intent to create and share profits. I think under the circumstances your sister is better off to treat her situation as a breach of a partnership agreement, as the proof of the existence of the partnership should be pretty easy and the rights and remedies of a partner against unfaithful copartners are pretty strong.
I'm out of space, so I'll post the rest of my answer in a second submission in about two minutes!
Here's the rest of my answer:
Another possible approach depends upon how the acquisition cost (down payment and cash closing costs) of the property was shared. If your sister contributed to the cost, she is an equitable co-owner and can obtain full legal co-ownership by bringing suit to quiet title in herself, notwithstanding that her name is not "on title" down at the recorder's office. She can, if she chooses, also sue for partition of the property if she can establish co-ownership. Partition is a process whereby the court directs the sale of co-owned property and, after a sale, the distribution of the net proceeds of sale to the co-owners in proportion to their ownership interests, after adjustment for excess advances by any co-owner for expenses such as mortgage payments, property taxes, insurance, necessary repairs, and the like.
Note that Code of Civil Procedure section 872.730 makes partition proceedings available for division of partnership property in a suitable case.
Oral agreements to transfer interests in real property are not enforcable EXCEPT as described above OR if you can show part performance or what is called "estoppel," and you might be able to plead either or both.
Finally, if your sister cannot establish any ownership, either as a partner or as a co-owner by virtue of investment, or by estoppel or part performance (which I would find surprising based on your facts) there is still a hope, based on the law protecting a good-faith improverof property owned by another, Code of Civil Procedure sections 871.1 et seq.
Depending upon what causes of action are employed and what claims for relief are made in a lawsuit, it may be possible to file and record a "lis pendens" (notice of pendency of action) to prevent sale of the property while your sister's rights are being adjudicated.
I'll be pleased to give you a free full consultation upon request, if you can supply a few more facts such as whether your sister contributed to the down payment. Please contact me directly.
Your sister should retain legal counsel ASAP to recover damages and or seek specific performance of the agreement at issue, before its too late.
It appears your sister can file a quiet title action or partition action to obtain her interest in the property.
If your sister would like a free initial consultation, please telephone me. I have over 25 years experience.
Good luck and thank you for your inquiry.