Legal Question in Real Estate Law in Massachusetts
I have a question about the division of profits from the sales of a property owned by 2 joint tenants.
Ten years ago, my father put me on the title of his house in Massachusetts (valued at $400K, equity $75K) as a joint tenant. Since then, I have paid all expenses associated with the house, including mortgage, taxes, interests, insurance, repair/maintenance costs, and utilities while both my father and I lived in that house. Two years ago, my father and I sold the house and, using the proceeds from that sale ($200K), I bought another larger house entirely in my name. My father gave me his portion of the proceeds with my verbal promise that he can stay in the in-law apartment in the new house indefinitely.
Because of a breakdown in our relationship, my father is now demanding I "pay him back" his share of the proceeds of the old house. I figure he is owed 50% of the proceeds minus 50% of the expenses (mortgage, taxes, interests, insurance, repair/maintenance costs, and utilities) I paid throughout the years. Is this correct? In otherwords, am I correct to assume that I had a full 50% share of the proceeds of the old house even though I did not pay anything in return for getting on the title and mortgage in the first place? Is my father legally required to reimburse me for the expenses I paid to support him/the house for ten years? Must I continue to support him once I have paid him back his fair share?
Thanks in advance
2 Answers from Attorneys
You may be able to mitigate your share of expenses or what you owe your father. You should consult w/ a qualified real estate/contract attorney in your area.
Given the history and the personal nature of your relationship, this will not be an easy situation to untangle.
There are a great number of ways to approach this situation. Here are a couple thoughts that come to mind:
When your father added you to his house as joint tenant, he arguably made a gift to you in the amount of $37,500.00 (one-half of the equity then in the home). In return, it sounds as though you agreed to make all ongoing payments toward expenses, mortgages, insurance, etc. That amount totals $x.xx.
Even though the second home is in your name only, your father can make the argument that he has some equitable stake in the property, since he contributed one-half of the down payment.
That being said, your father has arguably received a benefit roughly equal to the rental value of the in-law apartment. The rental value of the in-law apartment over the period he has lived in the second house is $y.yy.
People should ALWAYS enter into a property ownership agreement while they are getting along, preferably BEFORE purchasing property, to avoid this very confusion.
As a first step, you and your father might consider sitting down with an attorney to see if a workable solution can be ironed out.
Best of luck!
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