To whom it may concern,Me and my ex-fiance purchased a property together in Feb, 2008. I was the only party who put 20% down through a equity loan I got from my mother, equating $67,200 plus $5,000 closing cost. My investment was a total of $72,200.My mother and I did not have a written agreement, but had a verbal agreement that I would be responsible for making the home equity mortgage payments and would return the money as soon as I sell the property. The home equity is under my mothers name since her mortgage is under her name but since the property is under her and all of the kids names we all had to sign of on getting an equity.Now our property was put under both mine and my ex-fiances name and the mortgage was just under my name. Both of us contributed towards the mortgage, in total I contributed 65% of the time and she gave 35% of the times. In Sep, 2010 we ended up splitting and decided to rent out the property to the tenants. The tenants covered the cost of the mortgage but I covered the remaining $500 monthly for about year and a half till last month, June 2012.Two months back, we decided to sell the property but quickly realized that we would not really make any profit. All that was remaining after paying off the agent fees, mortgage lender, etc... was $71,300, roughly the same amount as I put in. My ex-fiance felt she had the right to half of that money regardless of the fact that I still owed my mother for the 20% she provided us. Not coming to an agreement on how to split the money, we still moved forward and sold the property. The escrow company transferred the money into our joint account, I decided to transfer the funds into my mothers account, as I truly felt I had the right to those funds. Now my ex-finance is planning on taking legal actions because i had transferred the funds my account to my mothers and saying I stole $35,000 of her share. Currently, the funds are sitting in a joint account shared by me and my mother. I am very sure she will take this to court, assuming that does happen would it be smarter for me to transfer the funds to my mothers lender, transfer the funds to only my mothers account, not a joint or simply keep it in my account?Secondly what do you think are the chances of me winning the funds, if so how much? Last but not least, and what do you suggest I do moving forward? I would like to in advance thank you for your assistance. God bless.
State/Country relating to question: California
I have only tried getting opinion from my lawyer friends thus far.
Hello,Before I answer, can you please explain how you were able to get the escrow agent to transfer the money to you? I'm assuming that the escrow listed both you and your ex as sellers, and that the escrow agent would have had to issue a check in both you and your ex's name. I want to be certain that I understand the nature of the transaction.Thanks in advance.
Yes, both of us were listed as sellers on the papers and from what I recall both of us signed the paper where the escrow company asked how would you like the remaining funds to be transferred.
Okay, thanks.I wanted to ensure that you hadn't managed to inadvertently fall into committing a criminal act, and I do not see this as having occurred, because the account with your ex is joint, which means that each of you had full legal control over the funds. That said, You asked: I am very sure she will take this to court, assuming that does happen would it be smarter for me to transfer the funds to my mothers lender, transfer the funds to only my mothers account, not a joint or simply keep it in my account?A: Assuming that you can prove that you made your original investment into the property and its amount (e.g., canceled check, bank check, HUD-1 settlement statement from original purchase escrow, etc.), then your transfer to your mother in exchange for a receipt from her showing full satisfaction for payment of a personal loan would be additional evidence that you were satisfying an actual debt -- rather than a gift.It would be better were you to have signed a promissory note to your mother at the time that the loan was originated to you (maybe you did, and you don't remember doing so), but even if it was a gift to you, this doesn't mean that your original down payment was intended as a gift to your ex. I doubt that a court or a jury would simply jump to the conclusion that you intended to gift your down payment such that your ex would be entitled to a share of the original equity on sale. Moreover, because this activity took place outside of marriage, your ex cannot obtain attorney's fees as part of any recovery, so she will be coming out of pocket, win or lose, for at least $10,000 in advance fees to hire a lawyer, and it could cost $25,000 to completely resolve the case (n.b., it could cost you the same). This case boils down to a breach of oral contract, and it will be damn hard to prove the intent of the parties, so to a great extent the case is a "crap shoot" for everyone (except the attorneys, who will almost certainly want to be paid in advance and by the hour). Secondly what do you think are the chances of me winning the funds, if so how much?A: You already have the funds, so it's more like "keeping the funds" that matters, not winning them. Last but not least, and what do you suggest I do moving forward? A: The website (and California law) prohibits me from advocating a course of action in this forum. If it were me, I would pay my mother back for the loan, and then tell my ex that if she doesn't like it she can sue me. But, I'm a lawyer, so I don't have to hire one to defend me. You can certainly offer a settlement to your ex of a few thousand bucks, in exchange for a release from any further liability for you and your mother concerning this matter. Even if you ultimately prevail, it's usually better to try to settle before things get unreasonably messy.Hope this helps. NOTICE: My goal here is to entertain while educating the public about the law. I hope my answer is useful and informative to you. During our conversation, the website may ask you to rate my answer. If you rate my answer lower than the middle rating, then the website retains your entire payment, and I receive nothing. It is entirely your choice as to how you rate my answer. However, because your payment to me is in the nature of a donation/gift, rather than as compensation for any services rendered, you are entitled to know how your rating affects the final distribution of your donation. If you need to contact me again, please put my user id at the beginning of your question ("ToCustomer), and the system will send me an alert. Please Click the following link for IMPORTANT LEGAL INFORMATION. Thanks and best wishes!41086.8177559028
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