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We Had a Land Sales Contract The Seller Won’t Admit To. – Mel

“Dear Steve,

We went into a land sales agreement with a friend who paid $20,000 down on a property for $87,000, with the grant deed in the name of an irrevocable trust.

We agreed to pay $60,000 for 5 acres in California on a 10 acre lot. We committed $30,000 of leveling the land, and infrastructure to the property and helped him build his house. Without our labor, his house would not have been built. We also made the property payments of $600/mo, cash, and we paid the electric bills for the entire property.

The county would not let us have a separate meter until we get our house built. He accepted 1 year of payments, then stopped providing receipts for our cash payments, so we began paying him in checks. He ripped up our checks and sent them back to us, but never paid his share of the electricity, which runs from $600 to $1200 per month. This has gone on for almost 7 years.

In August 2009, he put the entire piece of property for sale, and took us to court for unlawful detainer, in which he did not prevail. Then we filed an injunction to stop the sale of the property. He is claiming in his cross-complaint against us for quiet title and ejectment, declaratory and injunctive relief, that we had an oral agreement to rent, and there was never any agreement to purchase.

In admissions, his attorney is wanting us to “admit that no intregrated land sales contract was ever formed between us and any trustee of the irrevocable trust.” I believe this is some kind of trap, and am not sure what the right answer is.

The contract agreed that with the first payment, we would obtain property rights, although title would not pass until we can divide the property, and it also made my husband a trustee of the trust, which he has not kept his word on.

We have approximately $100,000 dollars tied up into this property.\, the judge already ruled in the UD that there was no rental agreement. In the trial transcript, our “friend” who was trying to sue us admitted that there was a land sales agreement, and none of us ever called it an integrated land sales contract. He has already admitted that the electricity payments were payment for the property, but he claims a sequential oral rental agreement.

in admissions, his attorney is wanting us to “admit that no intregrated land sales contract was ever formed between us and any trustee of the irrevocable trust.” I believe this is some kind of trap, and am not sure what the right answer is. Is this a trap, in which either way I answer it, could nullify previous testimony made by our “friend” in previous court hearings? What are the pros and cons to this admission?

Mel”

Dear Mel,

You need to find an attorney to represent you in California. You might want to talk to a local real estate attorney.

What I can share with you is that if you can find proof of the initial $20,000 payment and the money invested in the additional work it probably helps your claim you did not have a casual rental agreement.

The downside of the land sales contract is that the seller is not required to file that with the county clerk. If he had it would have created a title defect and prevented the property from being sold.

You’ve got a lot at risk here. Pay for a local attorney to at least advise you.

Please post your responses and follow-up messages to me on this in the comments section below.

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.




About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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