hello all,
a caveat has been placed on my property for sale by the ex mother in law who put in 10,000 to finish off the build, this was 2 and a half years ago,no mention of this money has been made at all until she found out that the house is currently up for sale, i had a defacto relationship with her daughter that has ended and all titles are in my name only, the deposit went to my account as a cash deposit, there was no mention that this was a loan at all and there is nothing in writing or anything signed by me to that effect, the amount or use of the money is not in question, my argument here is that it was a gift or so i thought at the time as nothing was said by her at all and shouldnt she have to prove that it was a loan ?
thanksG'day Oeb!
Alright, some curve balls but here goes.
Firstly, if the money is not in dispute as far as being given to you then the now ex Mother-in-law is within her rights to place the caveat on the title.
Secondly, a caveat can only be removed by lands title office by either the complainent and/or a court order.
Thirdly, you can sell a property with a caveat on it providing there is a provision in the settlement documents that will allow the caveat to be discharged prior to settlement – giving a free and clear title to the purchaser. Or, you're lucky enough to have a lawyer/conveyancer overlook the caveat when representing the purchaser but, this is a very big longshot!
Lastly, if you are on talking terms weith the exMIL may I suggest you open a dialogue with her in regards to legally assuring her financial interest by ensuring her loan/debt/gift is to be duly paid out during the settlement process to allow you to sell whilst she is protected. You would do this in the form of an ex-parte agreement which would probably require a lawyer.
I hope this has been of some benefit to you!
CHEERS!
TCWow, what a potential mess.
The mum has an equitable interest in the property as she contributed to the purchase. If it goes to court then it will be you arguing it was a gift and her arguing it was a loan. What evidence do you have that it was a gift? and What evidence does she have that it was a loan? I think it will be cheaper just to agree to pay it back at settlement rather than fight it. Legal fees will be pretty high.
A lot of people will exchange on the purchase if they are assured the caveat will be removed at settlement – if it cannot be removed then they will be wasting their time and money as they won't be able to settle.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terry has a good point. you need to sort this out. $10,000 is not worth legal costs. Even if you are successful you will still be out of pocket.
this comment was sent to me from a friend that has looked at the original question
The answer you got deals with the assumption that you are happy to pay the 'loan' back at settlement, but doesn't really address whether the money is considered as a loan to be repaid or not. Can you go back to it again and query that point? I would also add that if she claims an equitable interest in the property age has never contributed to upkeep, rates, maintenance and improvement of the property and doesn't have any written agreement releasing her from her share of those costs as a part owner in the property. – she can't have it both ways?
It doesn't matter whether it is a loan or not, she has a caveat lodged. She contributed money to purchase the property so it will be very hard to remove the caveat, even if you are in the right, and probably impossible to do before settlement.
And, just because someone claims an equitable interest in a property doesn't mean they need to contribute to upkeep etc.
I think you need some legal advice asap.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
the money was not used to purchase the property, it was used to lay a floor, i guess my point here is that at the time the money was given it was not given as a loan, no agreements, no paper work, nothing signed by me, no mention of the money for 2 and a half years until now
But, that doesn't mean it wasn't a loan. If it goes to court you will need evidence to prove it wasn't and she will need evidence to prove it was. This doesn't have to be written evidence.
Improving a property would probably give her the equitable interest as well.
Tough situation – you had better try to get advice asap.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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