Hello, let me start by saying I am new to the real estate market and have recently began to get my feet wet with renovating a couple properties.
Here is my question: If my partner in renovating our current house only puts the title to the home in his name after I am the one who funded 90% with my cash and credit, would he be able to sell behind my back? We signed a partnership agreement stating that property could not be sold with out all parties involved, but when I try talk to him about putting my name on the title as well he changes the subject or says there is nothing to worry about. I do not want him selling with out me and running off with my half of the money, considering all the cash and debt I have put into the mix, as well tons of my personal time.
My partner is the one with some experience in real estate and I included majority of the cash, if not all, because he is very secretive and have caught him in numerous lies, either saying pex piping was more expensive than copper, and I notice many other little lies he tells to potential investors as well. He also does some other things I will not mention in a public forum. He does not have anything in his name and seems like suing would be a lost cause. Would this be considered fraudulent activity if sells without me and does not pay my half or do I have any legal recourse before he can sell the house so both of our names on the title?
Please any help is appreciated, thanks!!
in real property transactions and contracts there is what is called "statute of frauds" basically means anything involving real property and contracts associated with have to be in writing. It's good you have partnership agreement but the title company would at closing put the check in his name since he is the owner and then your partnership agreement would require him to give you half the proceeds, or whatever it says. If you feel he has been untruthful or fraudulent with funds provided with renovations, or may run off without paying you. I would speak with a real estate attorney, he could put a Lis Pendens on property, means legal action pending and property cannot be sold until he puts in partnership name, or adds your name to deed. You may also be able to put a lien on the property since you provided materials, depending on your state lien laws. Hope this helps, good luck!
As was previously suggested, you should seek legal counsel to determine your options as no one here has read your contract with your "partner."
Each state has it's own laws regarding real property transfers and title companies in each state have their own regulations on closing deals.
If in fact your "partner" is the only one on title, he likely has the legal right to execute all closing docs and receive all proceeds. Hopefully a competent attorney can advise you if you're able to encumber title. This might very well be an expensive business lesson and won't be one you will soon forget.
Please seek legal counsel ASAP so you the get the legal advice needed...legal advice you won't likely find here.
Also worth mentioning, when completing our partnership agreement we used a non existent LLC that the quit-claim deed was originally written for. So he must have contact the original owner and had another quit-claim deed put into his actual name instead. So the contract says I am 45% owner of "Bla Bla Properties LLC". Agreement says all partners are to be at closing upon agreed sale and that I am able to donate labor upon my willingness. ALSO it says property will be insured within one week of title recorded... and has been 3-4 weeks at this point. That is all the contract lays out, was notarized at my bank as well
Your side agreement has nothing to do with title to the property. Contracts are only as good as the parties involved. If your "partner" is on title, he "likely" has the right to sell without your permission.
Perhaps you can get the title company to refuse to insure title IF you provide them with your contract, but as previously mentioned it's time to speak to an attorney instead of seeking legal advice from folks here who are not qualified to offer such.
Sorry to hear about this @Ryan Haskell . How much did you 'invest'?
They say the only ship not meant to sail is a partnership. Quitclaim deeds to and from dead LLCs probably qualifies. Because the original LLC was bogus, you may have recourse. Always be on the PSA so title includes you.
In the future I may own as TIC - tenants in common with % ownership listed on title, then have a separate JV agreement for each property. OR I'd just own myself and rely on myself to get things done and ensure I'm not done-in by anyone but... myself! Cheers!
To avoid this you may want to consider coming in as debt next time which would mean you should have a lien on the property placed just like a mortgage. This lien will ensure the other person can't sell the property without paying you first.
Thanks for sharing your story. I have learned valuable info here and would like to know how it ends. Good Luck!
As everyone here has stated... get a lawyer immediately. It sounds to me as if your partner took money from you as an investment in a fake company and converted the funds for his personal use.
You need to take legal action before he gets a mortgage on the property or finds a buyer.
You have already said he is less than honest.
You also mentioned a quit claim deed. If he is a crook he might already know he does not have title to the property. If it is a scam, it could be as simple as you paying for the rehab of a property a stranger owns.
So in the morning start calling the best real estate lawyer you can find.
first lie should have given you a clue about his trustworthiness...should have sought counsel then just to protect your side of the investment.
Never give anyone money, especially in a partnership, without being on title or having some kind of deed in your name. Bogus LLC should have been a clue, too.
Go see a RE atty to cloud the title with the quit claim deed you have and find out what your options are. In case you missed it...
SEEK LEGAL COUNSEL IMMEDIATELY!!!
@Ryan Haskell , just how good a scam-artist is this "partner", getting you to AGREE to paying 90% of the cost, for just 45% of the ownership?
But at least make sure you do GET your share! All the best...
@Ryan Haskell Go see an attorney asap. You may be able to lien the property for the amount of your investment, and serve him with papers preventing him from doing anything else on the property, including incurring debt, without your permission. But, you'd better hurry!
NEVER enter into contracts with someone if you do not understand the entire process.
Thanks for all the info! I am learning that escrow seems to be a good option as well. Hopefully I am overreacting but it was not very smart of me to hand over my money so easily. Major lesson learned any which way this deal goes...
I will contact a lawyer and find out about my options, if I can convince him to put my name on the title, what would be the easiest way? I researched a little and found just filling out a quitclaim deed stating my percentage. Any other suggestions?