Jump to content
Sign in to follow this  
cheryl3303

Ex-daughter in law, refuses to pay us back agreed loan

Recommended Posts

While my son was married in early 2013, he and his wife (both in Air Force) were scheduled to move from South Carolina to Utah. His wife owned a house in South Carolina prior to marriage and she asked him to prepare the house to sell so they could move. Like any good mother I offered to help and worked with both of them to increase the value of the house to be sold so they could break even, pay us back and buy a new house in Utah. While the home improvements were underway, supervised by myself and my son in South Carolina, his wife was deployed to Korea and kept in contact with us by email, Skpe and Facebook. After a few months and 27,000 and change invested into the house, the two decided to get a divorce. Now here comes the good part. Since they were getting divorced, my son was most likely going to remain in South Carolina. To complicate it further we had the house appraised and its value was what she owed on the house. Verbally, in emails and other conversations for months prior to the sell of the house his ex-wife agreed to split the loaned house improvement money with my son and pay us back. Now call us dumb, but we believed them and to help them out we bought the house for what she owed on it. She gave my son power of attorney while they were married and all agreed to sell us the house for what she owed. In the bill of sale we wrote a paragraph stating monies borrowed by (sellers) from ( buyers) was still owed and not part of the sell. Again, signed by my son representing both of them. We bought the house Sept 2103. My son has paid monthly towards his half of the debt as agreed but from Sept 2013 until March 2014 my ex-daughter inlaw wrote us, called us and confirmed her debt was 12,500 until one day she sent us an email that she didn't understand why (out of the blue) we were requesting her to give us money as the house sold back in Sept 2013 many months ago. Further more she claims a document included in the house sell called ( certificate of compliance of all contract terms and conditions...) relieves her of any money owed to us.

Isn't this fraud or intet to fraud? What about breech of contract? She knew that house needed the 27,000 in repairs prior to us buying it, agreed to pay us back, sold the house to us and still agreed to pay us back for months after the sell and then magically back out? Now my son did agree on both of their behave since he had power of attorney when this all went down. Does any or all of this allow me to sue her? If so what are the charges I peruse and would I sue both to force her to pay her portion?

Any advice please?

Share this post


Link to post
Share on other sites

So you made improvements to a house that you now own and benefit from and you want your son and DIL to pay you for the cost of the improvements to your house? Frankly Mom, it is your house, you bought it and any improvements to increase the value of that investment should lie with you. Whether the language of the agreement is such that you have grounds to sue your DIL for the cost of the improvements to your investment is a matter for a lawyer who has read the terms of the agreements in question. I would not expect a handshake deal made with your child on her behalf while she was half way around the planet would bind her to anything.

Share this post


Link to post
Share on other sites

A little too much extraneous detail there given the topic, but never mind.

Sounds like you didn't do a proper analysis of what the improvements would bring to value before you "invested" (loaned) them.  (You say so "they could break even," which doesn't tell us much, but when combined with "pay us back" let alone "and buy a new house in Utah", you clearly contemplated a house worth far more than the mortgage (a/k/a having a bunch of equity).

 

they could break even, pay us back and buy a new house in Utah

 

You say "ex-daughter-in-law" and "ex-wife" but don't bother addressing how this debt was raised in the divorce or related/underlying property/marital settment agreement 50/50.

 

"Now call us dumb, but we believed them and to help them out we bought the house for what she owed on it."

Otherwise known as you paid what it was worth (at least appraised fair market value).

"She gave my son power of attorney while they were married and all agreed to sell us the house for what she owed."

I wouldn't use a "bill of sale" for a house, unless you're talking about a mobile home that isn't permanently affixed to any land.

 

"In the bill of sale we wrote a paragraph stating monies borrowed by (sellers) from ( buyers) was still owed and not part of the sell."

Not sure why loaned monies *would* be "part of the sell (sic)."

You say that the issue of the loan and who'd pay what was addressed on/about September 2013.  You don't say by when this was to be paid off, but if more than a year, hopefully the emails and such will address the written contract requirement.

"Further more she claims a document included in the house sell called ( certificate of compliance of all contract terms and conditions...) relieves her of any money owed to us."

She can claim what she likes but that doesn't make it true.

"Isn't this fraud or intet to fraud?"

That's for a court to say.

"What about breech of contract?"

Well, yes, at least.  :)

 

"Now my son did agree on both of their behave since he had power of attorney when this all went down."

What establishes that she agreed is, presumably, the emails and such. 

 

"Does any or all of this allow me to sue her?"

You're free to sue her, yes, but if your son is in default on payments, you need to sue him too.

 

"If so what are the charges I peruse and would I sue both to force her to pay her portion?"

Not sure what you mean by "charges" but you'd discuss what grounds with a local attorney.  This isn't a DIY project.  Advice is to seek counsel.

Share this post


Link to post
Share on other sites

Ok let me explain a little bit more. I loaned them money to improve their house to sell it hopefully for what she owed on it and recoup what we loaned them, in short like a flip, so they could relocate for the military when she returned from Korea.

After 90% if not more of the repairs were done to her house, which she was consulted on and approved, they decided to get divorced.

They discussed the debt to us and wanted to sell the house to see if they could pay it off, repay us and go their separate ways. Her intent was to move to Utah and my son was left at the direction of the Air Force to relocate some place else or possibly stay in South Carolina. after the appraisal came back, the value of her house was only what she owed on the house and there was no way they could sell it and pay us back.

After a review of multiple options, the suggestion was made for us to buy the house to help them separate completely and not be stuck with this house. ( it still need an additional 20,000) to fix kitchen, back porch and bathroom. We agreed to purchase the house for what she owed, make the additional repairs and they agreed they would repay what they borrowed PRIOR to us buying her house. They both agreed on debt. If they would have stayed married and sold the house, they would have only received what she owed and nothing more no matter who bought it and still had the debt with us.

This was agreed apron prior to the sell of the house so it was a contract. We would have not bought the house from them if we though for a minute that they would not repay us what they borrowed to fix it to sell for what she owed.

Breach of contract or intent to fraud?

Share this post


Link to post
Share on other sites

Like any good mother I offered to help and worked with both of them to increase the value of the house to be sold so they could break even, pay us back and buy a new house in Utah.

 

So...I had to wait until the very end of your very long post before you actually described the alleged loan agreement.  Really would have been nice if you had included that information up front.  As I understand the agreement, you loaned your son and daughter-in-law $25k or $27k (not clear which).  Correct?  Your post doesn't otherwise describe the terms of the loan (e.g., how much they were to pay you and with what frequency).  Nor did you say whether this loan agreement was verbal or put in writing (other than by the apparent memorialization of the loan on the "bill of sale" for the house.  Beyond the occurrence of this memorialization, the subsequent sale of the house and the fact that you now own the how appear to be completely irrelevant.

 

 

 

In the bill of sale we wrote a paragraph stating monies borrowed by (sellers) from ( buyers) was still owed and not part of the sell. Again, signed by my son representing both of them.

 

Did he?  Did he sign once on his own behalf and a second time "as agent [or attorney-in-fact] for [wife's name] pursuant to power of attorney dated ____" (or something to that effect)?

 

 

 

Further more she claims a document included in the house sell called ( certificate of compliance of all contract terms and conditions...) relieves her of any money owed to us.

 

Have you reviewed the document in question?  Do you disagree with her?  Why or why not?

 

 

 

Isn't this fraud or intet to fraud?

 

Nothing in your post suggests any fraud occurred.

 

 

 

What about breech of contract?

 

What about it?  If you loaned your son and daughter-in-law money and they agreed to repay the money on certain terms and aren't doing it, yes, that's a breach of contract.

 

 

 

She knew that house needed the 27,000 in repairs prior to us buying it, agreed to pay us back, sold the house to us and still agreed to pay us back for months after the sell and then magically back out?

 

Despite your use of a question mark, this sentence is not a question.  If you intended a question, I cannot discern what you intended to ask.  I also don't understand what you think is "magical" about any of this.

 

 

 

Does any or all of this allow me to sue her? If so what are the charges I peruse and would I sue both to force her to pay her portion?

Any advice please?

 

You're free to sue anyone you like.  "Charges" is a term only used in criminal law.  You'd sue for breach of contract or breach of promissory note (if you had one).  I suggest you consult with a local attorney.

Share this post


Link to post
Share on other sites

This response is NOT intended to create an attorney-client

relationship.

 

"Fraud" is one word that is usually overused by non-attorneys.

 

Generally, fraud requires a material misrepresentation regarding

past or current facts when the representation is made. Breach

of a promise to pay money in the  future standing alone usually

does not constitute fraud, at least in the state I am located in.

 

Why didn't you have a Promissory Note signed by both

before you spent the money on the repairs?. Secondly,

how do you intend to get around the Soldiers and Sailors

Civil Relief Act (or its current version)?

Share this post


Link to post
Share on other sites

Give it up, Mom.

 

I don't think you have a prayer of winning a nickel in court and, with all your rant, I don't think you are going to sue your son just to get at his ex.

 

I think if they would have stayed together there would never have been any thought of getting the money back that you "loaned" them for improvements.

 

After all, when you actually started writing the checks for the home improvements did you have any written loan agreement THEN or did you try to back into it after they split up?

 

You haven't convinced me that you had any kind of contemporaneous loan contract that would hold up in court so, unless you want to spend $10,000 on an attorney to litigate this (with slim chance of winning), feel free to continue venting here if you like but I don't think you are ever going to see a nickel from your ex daughter in law.

Share this post


Link to post
Share on other sites

I still can't get over charging your kid for improvements to a home you now own and will benefit from. They walk away with nothing but a debt while you have a newly renovated home you didn't have to pay to bring up to the current value. You bought it for what the market value of the house was at the time you purchased it. By coincidence that was what was still outstanding on the mortgage. Now you have a property you can sell, perhaps at a profit now that additional renovations have been made, rent for profit, or keep as an investment. Why would you charge your child anything for improving your investment? How is that "helping" your kid? So he pays you 20K and you reap the rewards. Not exactly what I would call "good" parenting. Not that it matters legally, but the logic fails me.

Share this post


Link to post
Share on other sites

I still can't get over charging your kid for improvements to a home you now own and will benefit from.

 

Unfortunately, by focusing on the subsequent purchase/sale of the house, the OP obfuscated the real issue here.  That the OP happens now to own the home isn't legally relevant (of course, it may be that you're focusing on something other than the legal issue here).  If I understand the story correctly (and I might not), the OP loaned her son and daughter-in-law money.  What the money was used for isn't relevant.  That the OP subsequently bought the son and daughter-in-law's house isn't relevant.  What is at least potentially relevant is that, in the home sale/purchase documentation, the parties apparently clarified that the sale would not extinguish the loan obligation.  While I obviously haven't read the document in question, that could be good evidence of the existence of the loan obligation.  On the other side of things, I think "adjusterjack" made a good point about this possibly not having been intended as a loan at the time is was made, and that is certainly something that should be considered by the OP.

 

 

 

They walk away with nothing but a debt while you have a newly renovated home you didn't have to pay to bring up to the current value.

 

Presumably, if the improvements hadn't been made, the OP's son and daughter-in-law would not have been able to sell it for as much.  That would have left them in a potential foreclosure or short sale position, so it's not like the son and daughter-in-law didn't benefit from the arrangement.  Again, this all assumes it was a loan and not a gift.

 

 

 

Why would you charge your child anything for improving your investment? How is that "helping" your kid? So he pays you 20K and you reap the rewards. Not exactly what I would call "good" parenting. Not that it matters legally, but the logic fails me.

 

Are you suggesting that a parent who loans a child money should never seek to collect on the loan?  If so, your logic fails me.

Share this post


Link to post
Share on other sites

I'm saying as a parent, I would consider the fully fixed up house that I now own and benefit from the increased value of, payment. Legality aside, it seems the OP is charging her child for the costs to improve an investment she now owns in full. Had the house been bought by someone else, the kid walked away with zero gain and the parents been out the $ to fix it up, it would be different in my mind. If Mom and Dad bought the house at the value owed, which was before repairs were complete, from a parenting/family relations perspective, I would consider the costs to fix it up and derive value from it as mine, not the sellers. I just couldn't say, "Hey thanks sonny, for funding the improvements to my investment. I'm now going to make money on it selling it for even more or earn rent off of it now that you paid to improve it for me".
.

Share this post


Link to post
Share on other sites

I'm saying as a parent, I would consider the fully fixed up house that I now own and benefit from the increased value of, payment. Legality aside, it seems the OP is charging her child for the costs to improve an investment she now owns in full. Had the house been bought by someone else, the kid walked away with zero gain and the parents been out the $ to fix it up, it would be different in my mind. If Mom and Dad bought the house at the value owed, which was before repairs were complete, from a parenting/family relations perspective, I would consider the costs to fix it up and derive value from it as mine, not the sellers. I just couldn't say, "Hey thanks sonny, for funding the improvements to my investment. I'm now going to make money on it selling it for even more or earn rent off of it now that you paid to improve it for me".

.

 

I agree with that analysis.

 

I think "Mom" just wants to get back at son's ex for divorcing son and doesn't have a leg to stand on.

 

"Mom" needs to get over it and move on.

Share this post


Link to post
Share on other sites

Wow. Apparently some of the posters do not have children.

I agreed to loan money to them. There intent was to use it to fix her house. The max amount was to not exceed $25,000 however, they both had no idea how to go about fixing all the problems and get it sold.

Verbal and written communication was/is established on the commitment to repay it.

The value of the house at the time was about $50,000. SHE owed $85,000.

it was in very sad shape, one bathroom was gutted to studs, electric had major issues and the rest of the house bad condition.

They asked if I could come to SC from CA and help them so her bad investment before they got married didn't destroy their future. Supportive I was and still am.

After the majority of the money was spent and changes to the house were made, the appraisal was $86,000. Sounds good except that isn't what someone would pay for this house as the kitchen was still living in the 50s and other cosmetic problems were present.

To the point, they decided to get divorced. No drama no nothing. No payback for separating from my son, I consider that reaction as petty and childish and an insult to draw that conclusion.

With the predicament SHE was now in, as it was her house and not his. My ADULT son offered to split the loan to fix her house, because he is a good man and since it wouldn't sell, I bought the house for her loan amount, and I paid all closing costs.

For the record, the house required an additional $18,000 to bring it up to code and updated enough to try to rent it out, since it is in SC and not my primary residence. After those repairs, the appraisal only went up a few thousand dollars because they were code issues and updates that technically should have been done before it was sold to me.

I had and have no issue with any and all costs related to the house NOW or since I took ownership. The agreement was to borrow no more the $25,000. That is what both of them agreed and although she stated she wanted to repay it herself, my son said no, I lived there with you, we were married and half is my debt. So he has been paying me monthly what he can, the amount was stated as ( what he can pay) because I taught my son to take responsibility for his choices.

As for my ex- daughter-in-law, she was given a ( please pay $100.00 a month ) until she could pay more, as she made less money then my son. There was no interest associated with the loan .

So, no I will not get over it! Yes, she owes me the money and my son suggested I sue both of them.

Yes, it is now considered an investment but seriously the rent would barely pay the mortgage. Who would really want to live by the military base in a 1950s house? Other military families who don't make a lot of money.

Share this post


Link to post
Share on other sites

There's no need to recover old ground or add more details.

 

You're free to ignore those comments with which you do not agree, and I'd certainly not waste my time debating strangers.  You've been counseled that you are (absent info to contrary) free to pursue your son and your ex-daughter-in-law for defaulting on their contract with you.  Feel free to sue only the ex-d and let her argue how that ain't right.  :)

 

"Yes, it is now considered an investment but seriously the rent would barely pay the mortgage."

I hope you're not saying you won't rent it out because it "would barely pay the mortgage."  :)

Share this post


Link to post
Share on other sites

Appraisals are based on what you should get for the house, not what it might be worth once repairs are done. Whether or not it was a sound investment or not you bought it and now will derive the benefit from it. Sue if you like but honestly, I can not imagine taking money from my kid for a house I now own. Being as it is near a base, you should never lack for renters.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

×
×
  • Create New...