Thanks for the suggestions. At this point, I would prefer something other than suing. Based on the circumstances, the quit claim she has refused is going to look much better to her than alternatives like the ones you mentioned. I have retained a lawyer who will try to persuade her to reconsider a quit claim. My bank has stated that it would allow a quit claim in my case.
Assuming she files the quit claim, a follow-up course of action suggested to me is enter into non-judicial foreclosure, then seek to refinance the property through my bank. Given the 17% devaluation in the property, a refinance would make single ownership less risky, and she would no longer be liable. But, what affect would this action have on my credit? Would there be any permanent affect to my credit? How long would it take to rebuild?
I have co-purchased an investment property in California. I have discovered that my partner as been using rental revenues to pay her portion of expenses. Now, my partner wants out, and is refusing to pay any expenses, including the mortgage.
what expenses did she pay with rental income? expenses associated with the property? personal stuff? is she really a partner (i.e. did you form a general partnership or LP?). or is she a co-owner? is your agreement in writing?
you may have a breach of contract action. or a breach of fiduciary duty action (better!).
Both parties are the title and the deed…no LP. Both agreed as tenants in common to pay half of all expenses related to the property - mortgage, condo fees, utitilies, cleaning, and other miscellaneous costs. We agreed that she would manage the property without any management fee. I discovered (from her own records provided to me) that the partner has not split expenses equally. For each dollar paid by the partner, I have paid two.
Now, the partner is refusing to pay any expenses, and has refused offers to sign a quit claim. Given the current market conditions, sale of the property would most likely result in a loss. And, refinancing the property would require a larger down payment than is currently feasible for me.
you have a co-ownership arrangement and not a partnership. you can sue her for what she owes.
can you insert yourself into the management of the property and take control of rent collection and expense payments? this would allow you to rectify her sins.
I have taken over most management responsibilities - I have put my name on all utitilies, and now pay all expenese. I have hired a property manager to look for renters, handle rental contracts, and deal with maintenance and repairs.
Since ownership, expenses have exceeded revenues. According to records the partner has provided, for every dollar she had put out to cover these expenses, I had put out two.
Posted by Rich-CA on February 06, 2008 at 12:31:14:
Send her a bill for the amount of expenses that would put you at par. Since she controlled expenses at that point, she should be able to figure what HALF of the expenses comes to. If she refuses, go to small claims court. If you have anything in writing that says you will split expenses EQUALLY, make sure you have it and its got her signature, otherwise a Judge may plug in a dollar amount for her time as manager, based on what your manager makes.
After you get the judgment, you may want to file a partition suit to force sale of the property and division of the proceeds.