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Real Estate

  • Thread starter Thread starter kellypa
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kellypa

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In 1996, my in-laws asked for a loan for a down payment so they could buy a house. They needed to borrow the money from family becuse they had bad credit history. We loaned them $12,000. They promised that they would pay us back right away. You can probably guess the rest. They couldn't pay us back right away.

It got worse. Their marriage broke up about a year later. I wasn't too worried because I assumed we would be paid back after the traditional post-divorce selling of the family home, but my in-laws did not sell the home. I thought it was unusual, but my father-in-law continued to live in the house and my mother-in-law moved out. Furthermore, they put it in the divorce agreement that they would maintain ownership of the house. It also provided for my father-in-law maintaining payments, but upon his death, my mother-in-law would assume ownership of the house. The divorce settlement further agreed to pay us our $12,000 later when she sells the house. They arranged this all between themselves. We were never consulted.

I fully intend to consult a lawyer, but I would like some information before contacting one what our rights and their responsibilities are. My wife is on good terms with her father, but not her former stepmother. Suing him may not be an option. We are not on good terms with my mother-in-law so I can't count on much cooperation outside a courtroom later on. I have concerns such as; should we put a lien against the house, what happens if the mother-in-law decides to keep the house but doesn't actually sell it, can the father-in-law transfer his share of the house to us now, can we claim any interest for our loan, etc?

Appreciate any advice. Thanks.
 


HomeGuru

Senior Member
Your $12K loan is not secured so you need to record a mortgage on title to protect your interests. Two documents must be executed:
1) promissory note
2) mortgage
You can have both reflect the total (including principal and interest to date) and the agreed upon interest rate which interest payment would be calculated from recordation to time of payoff.

Note that if the propery is never sold, you will never get your money back. In which case you should tell your attorney to put in a cause that references a fixed term of the mortgage (say 2-5 years) at which time the mortgage must be paid off or be in default.
 

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