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My real estate partner is on deed but not mortgage. He is refusing to pay for renovations.?

In addition to not paying into renovations, he wants to be bought out. The house is worth less than what we paid. Is he entitled to any money? How can I get him off the deed? If the house is worth less than what we paid but he still wants money to sign a Quitclaim deed, can this be perceived as extortion? The house is worth less than the mortgage. I went on the mortgage because I had the better credit.

Public Comments

1. Do you have a written contract with your partner? If not, too bad for you. How did you partner get on the deed without being on the mortgage too? There's something missing from your story.
2. If he wants out, get a valuation of the property and pay him his share of the valuation. He became a partner on the understanding that he would have an equal share of profits and losses. It may be too much effort to get the renovation money out of him.
3. insufficient info. is the house worth less than the mortgage balance?
4. extortion? No, I don't think so. He owns half the house, he is entitled to that. He doesn't have to pay for remodeling.
5. If the house is worth less than what is borrowed, then he cannot be 'bought out' as there is no equity to divide. Unfortunately, you cannot force him off the deed either. He is getting a free ride now as what you set up allows him to benefit from any upside whilst being protected from any downside. Of course you now know that this was not a good arrangement! Forget the renovations, that would have been foolish in any event without this complication. Your best bet is to find a way to make him share the pain. One way to do this is to simply sell the house. Of course you will be stuck with the shortfall as the borrower but he loses whatever deposit he put into the property. Another possibility is to run it as a rental. You don't say who is living in the house and whether rent is being paid to the other party. If the occupant vacates and the property is let out, the situation would become one where you were business partners although I imagine there would be a shortfall here too. You could tell him that you want to do this and that he has to share the shortfall with you. Tell him that if he does not, the house will be repossessed. That might bring him round.
6. Wow - 1) If your "real estate partner" is "on the deed" they own part of the property. Period. You might have special wording, like certain shares, or Joint tenants, which describe how you share ownership... without more specific information, the house is 50/50 between you two. 2) If you and your (bank?) worked out a mortgage contract on a property that you only hold 50% interest on.. that is unusual. More unusual is that the bank would loan you so much money that all of your equity, and partner's too is consumed. If you were open and honest with your bank, I don't see why they would lend you 2X of your share ( you only own 1/2) ? Unless you put down some other collateral. 3) If 'partner' says: " I own half of that property, and I want out." That is partner's right, unless you have a contract that says different. He/she can try to sell that 1/2 to anyone they like. It isn't your responsibility to help them sell. It also is not extortion. They own a part, and they want to see if it can be sold. Let them sell it if they want. Nobody will buy it with the bank holding a mortgage. A quitclaim deed is just a document that says that person no longer wants their name on the deed.. or similarly will "quit" any "claim" they have on the property. If I were selling you 1/2 of anything, I'd probably want money... it isn't extortion; it is business. I would evaluate everything, including your relationship with this 'partner', what other debt you have, and how this business deal will affect you. (a) maybe you can tell the bank that you cannot continue to maintain the property, and hand over your collateral. You can sell or transfer your 1/2.. just like the other person can.... for any reason you like. Talk to the bank about handing over the deed.. how much money will they require from you, or will they want some other property as collateral too? (b) offer partner a reverse deal.. sell partner your 1/2 of property for a penny (dollar, pound, whatever).. and give them the tax burden, mortgage, and other responsibility. We can only assume that your half is worth exactly the same as your partner's half. If partner thinks the property is valuable, then let them make you a fair offer. If partner knows the property is not valuable - they should realize this and go away. (c) what about declaring bankruptcy? let the lawyers and court sort it out. It sounds like "partner" took advantage of you. You had better credit, so you bought the property. Now you only own 1/2 of the property. Unless you have a compelling set of circumstances, or a written contract, the courts can't change these facts. (IF someone held a gun to your head to make you sign.. or drugged you.... or other things to manipulate you illegally... then you need to pursue that.) Right now, you have to deal with the facts. Neither of you can really get anything done unless the bank is satisfied on the mortgage. If you continue with this.. what is the outcome likely to be? Will it cost you less money to walk away from this loss now.. or to pay off partner -and- the mortgage.. or some other solution? You might want to see a lawyer or accountant (or both) before you move on. ** My opinions are usually just the rants of an idiot. I'm not a doctor, lawyer, or any other professional. I just play a nut on the internet that gives free advice. **