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Mother-in-law problem

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dkc1125

Junior Member
What is the name of your state? CA

My husband and I have a big problem, my mother-in-law. In October my sister-in-law talked all of us into selling my mother-in-law's mobile home, her retiring and moving in with us to take care of my child. She originally invested $20,000.00 which went towards paying off the private loan my sister-in-law gave us towards the down payment of the house.

The purchase price of the house was $230,000 in Merced, CA ($180,000 interest only mortgage and $50,000 private loan from my sister-in-law). In January 05, I received a big inheritance from my grandfather's estate. I paid off the remaining $30,000 owed on the private loan and my mother-in-law's car ($7000). Plus I cashed out my IRA and stock for the rest of the down payment and paid the closing cost on both houses.

Since then I have personally invested in a water treatment system for the house ($7000) and triple paned windows ($12,000). My mother-in-law pays nothing.

To make a long story short, she is on the mortgage and title. The mortgage is under her and I and the title is under my mother-in-law, my husband and myself. She is now driving us crazy. We want to sell the house, give her the $20,000 plus interest (or fair market value) and go our seperate ways. Or refinance the loan into my husband and I name.

If we refinance how do we get her off title? does she have to agree? what is she legally entitled to for her to be bought out? if we sell, what is she legally entitled to?

I am the only one solely working to support my husband, baby and her. I find it really unfair that she is profiting from my money that I am solely putting into the house. Help!!
 


divgradcurl

Senior Member
If we refinance how do we get her off title?
These are two separate issues -- refinancing alon won't remove her name from the title. She will need to deed her interest in the property to you (or you and your husband).

does she have to agree?
Yes.

what is she legally entitled to for her to be bought out? if we sell, what is she legally entitled to?
What agreements did you have, if any? How is the house titled? Joint tenancy? Tenants in Common? Community property plus something else?

In very general terms, if the house were sold, people would get paid in this order: the mortgage holder gets paid first. Assuming there is money left over after paying off the outstanding mortgage and any closing costs, the "profits" are typically used to reimburse any "seperate property" payments into the house -- so MIL's $20K, your $30K + the rest of the downpayment on YOUR house (but not any tax-deductible closing costs), + any improvements (not repairs) to the house. These all get paid back first. If you were the only one paying on the mortgage, then you could get reimbursed for the PRINCIPAL part of the mortgage payments made on the house -- but not the interest. Finally, if there is any money left after reimbursements are made (and there is NO interest paid on these, by the way), then the rest of the profits will get split up amongst the owners -- either three ways or two ways, depending on how the house is titled.

If you don't sell, and just want to buy her out, then there isn't any "legal" amount she is entitled to -- you are just buying her share of the property, and she gets whatever you and her can agree on.
 

dkc1125

Junior Member
Re: mother-in-law problem

Yeah, I'm screwed. I just got home and pulled the title. My sister-in-law helped us to put my husband on the title (keep in mind we didn't know how to go about doing any of this and trusted her). She has it titled "Dawn and Wesley ***, sole and seperate property as a married couple, and Irene **, sole, unmarried woman, each as divided one half interest." I don't have the original title but the notes on the rough draft has (Jt- 50% by my husband's name).

So I guess there is nothing I can do but talk her into signing over her interest and hopefully getting away with giving her $30,000 (her $20,000 plus interest). But that is only if she doesn't go running to my sister-in-law, who I am sure will tell her not to do it. My husband and I basically got unknowly got screwed, it is very upsetting. I wish I had more of a case on my side since I paid off her car and she lives free in the house I pay for (and thinks its her's).
 

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