What can my in-laws do, if anything, to get their down payment money back “loaned” to my wife and her previous boyfriend?

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What can my in-laws do, if anything, to get their down payment money back “loaned” to my wife and her previous boyfriend?

My wife previously bought a home with her boyfriend. They obviously broke-up but the house is in his name though her parents gave them the down payment. He’s been renting out the house while living out of state. He does not want to sell the house. Is there anything we can do?

Asked on May 10, 2012 under Real Estate Law, Indiana

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

The key legal issue is whether it was a loan at the time it was made. If it was a loan, it must be repaid when, and under the terms, pursuant to which it was loaned. However, if it was not a loan then, but rather was a gift, it remains a gift; a gift, once given, cannot be recovered and may not be retroactively converted to a loan.

The practical issue is, even if it was allegedly a loan, can that be proven, especially if the ex-boyfriend claims it was a gift? What testimony, what text messages or emails, what contract or promissory note, etc. can be provided to prove in court (since if he won't repay voluntarily, you will need to sue) by a preponderence of the evidence (or "more likely than not) that it was a loan?

In addition: certain large loans or loans that will not be paid back for years have to be in writing to be enforceable; also, even if it was a loan, if the ex-boyfriend stopped paying several years ago, it might be too late now to take legal action--the "statute of limitations," or time to sue, may have expired.

In short, in theory, if it was a loan when it was made, the ex-boyfriend must repay it; but there are a number of issues that must be dealt with to see if that is possible. Your in-laws should consult with an attorney about the situation; if there's not enough money at stake to make retaining a lawyer worthwhile, it may not be worth taking action.


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