Is a notarized statement stating the loaned money will be repaid upon the sale of a present home, enough to guarantee repayment in a court of law?

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Is a notarized statement stating the loaned money will be repaid upon the sale of a present home, enough to guarantee repayment in a court of law?

We would like to loan money to our daughter and son-in-law to purchase a new home in the interim between the new purchase and the present home’s sale.

Asked on June 25, 2015 under Real Estate Law, Oregon

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Legally, a written agreement, signed by both parties, is enforceable, whether or not notarized. Practically, what will you do if they do not repay the money? You'd have to sue them, but also you'd have to collect. If they borrow, say, $100,000, do not repay you, spend or waste the proceeds from the present home's sale, and have a mortgage on the new home, there may be no way to actually get the money. So legally, you can create an enforceable agreement; practically, consider what happens and how you'd recover what is presumably a large sum if they do not repay it.


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