Buying or Selling a Home/shared real estate
Hello Kathryn- Ok so my situation might be a bit unusual but here goes. I am an expert here as well in the home builders area of expertise and as I find that I am quite helpful to many of my questioners I thought i might turn to another expert.
The house I live in is a duplex, here in Portland, OR. I have lived here Since 5/08. I had gone in as a partner with a "friend" and put in $40k cash. Silly me there was no written account of this. They were to be rentals, but as time progressed I ended up living in one side after a divorce.
Early on I asked if any of my "rent" was going toward principle and he said that we could work something out. Meanwhile I manage both places with repairs, maintenance,landscape upkeep/lawns; all thinking that we are working toward a common goal. Of these I do have receipts and records.
Recently he has informed me that in fact none of the rent I have paid has gone to principal and that my cash in, which at the time was 10% of original purchase price, has been eroded by the housing down turn. (I have checked and the value of this property has returned to purchase price value) Well you could imagine my surprise to learn of his new good fortune!
My question is : Do I have any recourse on the matter of rent toward principal? I know that most of the front money mainly goes to interest. But to lead me along like there was "something we could work out" is wrong, and if I had known this I certainly would not have been paying the "rent" here for so long. Any insight or advice is greatly appreciated.
Thankx in advance,
Thank you for entrusting me with your question. As you know, I am not an attorney. I would recommend, for your own peace of mind, that you ask your question at lawyer.com, for example. With that said, I do have an opinion, of course. And, I do have questions for you to consider before writing for additional insight.
* Are you in sell mode? Or, in 'what-the-heck-is-going-on' mode? Naturally, the answer to this will make the difference in the urgency of your solution.
* Is your name on the title? Is the deed held as joint tenants, tenants in common, an LLC?
* Have you ever had a conversation with 'friend' regarding a lesser amount of rent being paid than the going rate? Or, that the rent you were paying was less due to your doing maintenance?
* How are the tax benefits being divided up? This could point toward an understanding of how the investment value was originally intended to be divvied up.
* Do you have the ability to put together a Comparative Market Analysis for your 'friend'? If so, it could be a useful tool in your next, "Humm...Buddy, I'm thinking we may have a misunderstanding we need to work out..." conversation. No threats. Just facts. -- And, you will want to have an idea of your legal standing before having the conversation of course; just for your back pocket, not for sharing at this juncture.
My thought is -- regardless of who is paying the rent, you or a stranger, the money goes toward making the mortgage payment, insurance, and any property taxes, expenses, etc. Nothing changes.
I'm thinking that -at minimum- you get your 10 percent back.
From what I can tell, you're a really nice, trusting guy who probably should have known better. But, we all believe our friends won't take advantage of us. 'Guess this is why the subject of a prenup is always so controversial.
'Sincerely hope that helps in some way, Glen! Best of luck to you!