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Just to be clear, he's been paying you rent to stay at the house? How much has he contributed to the property?
Did you see my follow up question to your issue?
yes he has been paying rent to stay. There is about 60K worth of items he has contributed over the last few years.
How much of that amount is long term improvements to the property, and how much would be considered maintenance and short term repairs, etc...?
I would consider about 2/3 long term improvement the rest was maintenance type things that had to be done
Thank you. First of all, in the absence of an agreement between you two that he would be reimbursed if you ever broke up, etc... then any recovery that he may have would be based on either "promissory estoppel" or "unjust enrichment". Promissory estoppel means that you promise something, and he takes actions in reliance of that promise, to his detriment. If your promise was that he could stay as long as he wanted, then it's possible that he could have a claim to some of the long term expenditures. The maintenance expenditures almost never are reimbursable, because they represent "present expenditures", and that's sort of akin to rent.
As for the rent, that two would not be reimbursable, because of the agreement that you had with him regarding the rent.
(unless there was a separate agreement that it would be paid back to him)
Situations such as this are somewhat difficult for courts to work out. The reason is that these contributions could be determined to be gifts. If they're gifts (to you) then he would almost certainly not have any claim to the funds, unless he could prove that they were "contingent" gifts (meaning that the gratuitous nature of the gift depends upon some future action or condition, such as you both staying together). It could also be an improvement with the assumption that he would have essentially an equal interest in the property (that he would continue to live there).
So really what might be compensated for would be the long term improvements to the property (that increase the value of the property), but without an agreement at the time that the payments were made by him, and without a promise to reimburse him, then he could only at most recover under "unjust enrichment".
That means that he can't recover the entire amount that he put in unless the value of the home has increased by that much.
Suppose he paid for a $20,000 swimming pool, but that it only increases the value of the property $10,000. If there was no contract or other promise to pay him back, etc... then he would at most be able to recover only $10,000 (the amount of the increase in the value of the property, not the entire amount put up). The reason is because you, as the owner, have been "enriched" by $10,000, not $20,000, even though that was the cost of the pool.
The law says that it would not be fair, in certain instances, to allow you to be enriched in that situation (i.e. "unjust enrichment")
So if you can properly valuate the expenditures that he has contributed to the property and the increase on the equity as a result (which is pretty difficult, to be certain, but can often be done by appraisers, etc...) then that could give you a good idea of what he could recover if he were to take you to court for this.
Hope that clears things up a bit. If you have any other questions, please let me know. If not, and you have not yet, please rate my answer AND press the "submit" button, if applicable. Please note that I don't get any credit for my answer unless and until you rate it a 3, 4, 5 (good or better). Thank you, XXXXX XXXXX luck to you!
Yes that answers very clearly and I do feel that I am being more than fair now seeing this. FYI I do intend to pay him 50k but at first he wanted me to sell the house and pay him a 1/3 because of the rent.
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