Verbal Agreement on Property purchase

[Frustrated9*9]

They no longer want anything to do with property and actually told us to sell their portion and keep money. The land isnt surveyed for that and there is only one access point. From what I am reading, no way to force them to continue to pay. We have only emails and text msgs that verify agreement and payments. If wife and I were secure enough in our income, it would not be an issue. We had just planned on having their payment to help us.

 

[justalayman]

Suing a family member is seen (by the family member)as a very hostile act that has long term effects on the family as a whole. Its really something to be avoided at all costs. If they will give up their ownership so that some other kind of financial arrangement can be made (like subdividing and off part of it) it will lessen the long term negative effects on the family.

I know but if the kids arent willing to fulfill their obligations, it’s either that or accept they aren’t going to pay back op for what they owe him


I don’t see splitting the land unless the kids are willing to divest themselves of their interest with the promise of payment in the future. If they are due anything It can be done but having seen enough of this sort of thing and given the acts of the others, I’m not too hopeful the others would be willing to go along with what it would take to solve the isssue.

 

[justalayman]

They no longer want anything to do with property and actually told us to sell their portion and keep money. The land isnt surveyed for that and there is only one access point. From what I am reading, no way to force them to continue to pay. We have only emails and text msgs that verify agreement and payments. If wife and I were secure enough in our income, it would not be an issue. We had just planned on having their payment to help us.

Oh, ok.

But with the new info you are still in a difficult situation.

It sounds like you either figure out if you can subdivide the land and split it up and sell off whatever or figure out how to make this work as it sits or just sell it all and move elsewhere where you can purchase what you can afford


As I said previously it appears this involves a loan and not the contract for property. The ownership of the property and the money you effectively loaned the kids are associated but separate issues.

 

[Frustrated9*9]

yes. I think I am letting emotions get involved and that makes things messier. I msgd the granddaughter and we are just going to get their names off property deed/title. They are okay with that. I want to thank everyone who responded. sorry to have taken up your time.

 

[justalayman]

yes. I think I am letting emotions get involved and that makes things messier. I msgd the granddaughter and we are just going to get their names off property deed/title. They are okay with that. I want to thank everyone who responded. sorry to have taken up your time.

Understand that the only way to get their names off title is for them to execute a deed transferring their interest to you (or whatever party they choose). There is nothing you can do to have their names removed


And no problem with the time. If we didn’t want to do what we can, we wouldn’t be here. I hope things work out for you.

 

[Litigator22]

We purchased property in Tn 2 years ago. We had a verbal agreement with children to pay us back. Each child in agreement to have a piece of property for a home. Payments have been made for over a year but now one has moved and no longer wants to pay anything. We have tried to adjust payment to make it easier, that payment change was accepted for a while but now, they no longer want to pay anything. We do have some emails and text msgs that support the verbal agreement and some bank history of previous payments made. Will a verbal agreement stand up in court if we try to get our money back ? What is that process ? Thank you

You write that "we purchased property". Then you add: "we had a verbal agreement with the children to pay us back."

My understanding then is that in stead of loaning the children the money to buy property for their homes you and mother purchased a plot of ground. And that you did so with the verbal understanding that it would be split up and parceled off to each child (we don't know how many) whom would then in turn pay some unknown but agreed price for their individual parcel of land.

Now because some have reneged on their agreement you want to know how to get your money back.

To begin I don't agree that the issue involves a loan of money to the children. But rather an issue of upholding or enforcing the unwritten agreement. And it is the verbal nature of the bargain that you foresee as troubling. To me that isn't necessarily a prohibiting factor as there may be sufficient evidence of partial performance - actual possession, periodic payments, etc., etc. - to avoid the defense of the statute of frauds.

Where I see the stumbling block is in your inability to prove the essential terms of each of these separate and independent verbal agreements with the degree of certainty necessary for their enforcement. * For example the price of each separate parcel, an adequate legal description of each individual parcel (very difficult to determine the precise piece of real estate being sold by verbally describing it), the terms of sale, price, periodic deferred payment schedules, interest rates, conveyance of title, remedies upon default, etc. , etc. Also, there must be shown in such terms the presence of what is known as mutuality of obligation.

Putting the shoe on the other foot (or feet) the same lack of certainty as to the details of the verbal agreements would seem to undermine any action by a given child for specific performance.

In court? To be honest I think you'd be floundering.

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[*] An agreement may lack contractual force because it is so vague or uncertain that no definite meaning can be given to it without adding further terms.

 

[justalayman]

You write that "we purchased property". Then you add: "we had a verbal agreement with the children to pay us back."

My understanding then is that in stead of loaning the children the money to buy property for their homes you and mother purchased a plot of ground. And that you did so with the verbal understanding that it would be split up and parceled off to each child (we don't know how many) whom would then in turn pay some unknown but agreed price for their individual parcel of land.

Now because some have reneged on their agreement you want to know how to get your money back.

To begin I don't agree that the issue involves a loan of money to the children. But rather an issue of upholding or enforcing the unwritten agreement. And it is the verbal nature of the bargain that you foresee as troubling. To me that isn't necessarily a prohibiting factor as there may be sufficient evidence of partial performance - actual possession, periodic payments, etc., etc. - to avoid the defense of the statute of frauds.

Where I see the stumbling block is in your inability to prove the essential terms of each of these separate and independent verbal agreements with the degree of certainty necessary for their enforcement. * For example the price of each separate parcel, an adequate legal description of each individual parcel (very difficult to determine the precise piece of real estate being sold by verbally describing it), the terms of sale, price, periodic deferred payment schedules, interest rates, conveyance of title, remedies upon default, etc. , etc. Also, there must be shown in such terms the presence of what is known as mutuality of obligation.

Putting the shoe on the other foot (or feet) the same lack of certainty as to the details of the verbal agreements would seem to undermine any action by a given child for specific performance.

In court? To be honest I think you'd be floundering.

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[*] An agreement may lack contractual force because it is so vague or uncertain that no definite meaning can be given to it without

But that is not what happened. Op obtained the financing to purchase the property that all of the group jointly purchased. Why you believe this results in a sale from the op to the kids is curious to me. The kids have no reason to purchase what they already own from anybody. They already purchased the property from the grantor on the deed that transferred title to the op and them.


So, not only are the kids not purchasing the property from the op, the op hasn’t actually become a lender. The agreement was for the kids to contribute to the debt op incurred when purchasing the property. Op has since paid off the loan Op’s action in court would be to compel the contributions promised to continue or to partition the property.

The problem with partitioning the property: the kids own their share with no loan where the kids are the borrowers and the kids pledged their shares as collateral for the loan. It could be a real mess if the kids chose to not cooperate with whatever actions the op would take. They would be entitled to the money representing their share of the property. Op has no lien or mortgage (as mortgagee so he has no lien on the kids interest in the property.



But op has stated the kids are willing to transfer their interest to the op so he doesn’t have to worry about anything

Except


How this may affect the involved parties regarding taxes. If the kids give the op their shares, it is a gain for the op.

 

[Frustrated9*9]

It was very simple. $113k to be paid back by 3, each paying $400 a month. Each to choose where they wanted house. The kids actually lived on property for 6 months before we moved down. We have documentation as in emails, txt msgs and cancelled checks.All those showing the terms were being followed for a year. It wasnt until the 2 kids got married and moved that they decided they no longer wanted to live here. Anywhoo, it is all moot now.

 

[justalayman]

It was very simple. $113k to be paid back by 3, each paying $400 a month. Each to choose where they wanted house. The kids actually lived on property for 6 months before we moved down. We have documentation as in emails, txt msgs and cancelled checks.All those showing the terms were being followed for a year. It wasnt until the 2 kids got married and moved that they decided they no longer wanted to live here. Anywhoo, it is all moot now.

The one issue I caution you about. Transferring their shares to you does make it a gift of the value of their shares to you. Hopefully one of the tax gurus around here will,catch wind of this and comment on whether it will create an issue for you. I don’t know if it will or won’t but I do know that it’s hard to undo harm once an action is taken.

 

[Frustrated9*9]

They never completed payment, therefore they have no shares. We have always paid taxes on full property. they are aware they will be tossing away what they paid so far. It is far less than what they still owe to us. We will send them a quit claim or whatever it is. Get their names off the title. They have agreed. We will have to take the loss. A lawsuit would tear family apart.

 

[justalayman]

They never completed payment, therefore they have no shares. We have always paid taxes on full property. they are aware they will be tossing away what they paid so far. It is far less than what they still owe to us. We will send them a quit claim or whatever it is. Get their names off the title. They have agreed. We will have to take the loss. A lawsuit would tear family apart.

They have shares because their names are on the deed. There is no lien on their shares of the property regardless of the financial wrangling that has taken place. At most, if you had to force the issue (not suggesting you will) you could sue for the implied loan. Since the property is not pledged as collateral it wouldn’t allow you to demand they transfer their interest to you. Effectively the purchase of the property and the,kids making payment to you are separate yet associated issues.

And they are whom has to make and sign a deed transferring their interest to you.


The facts

Property was purchased in all 4 people’s names. They would be transferring their share to you without compensation. That makes it a gift.

Now I do understand there was a de facto loan to the kids but it’s without any support. You would be, in effect, buying their share from them in cancelling the owed debt and not recieving a gift.

I’m just saying to make sure this doesn’t look like a gift to you and it end up causing issues for you.