Can I take legal action if my business partner fails to make an agreed upon monthly payment for a Real Estate investment?

Question: A few years ago, a friend and I invested in a real estate property and agreed to pay 50/50 for it. My friend is now unemployed and cannot make the monthly payments for the mortgage. Currently, he is two months behind on his payments. Is there any legal recourse that can be taken?

Response by Jason Tong: In Real Estate, it is common to have business partners for the purchase of a property. Typically, both partners will sign a Promissory Note, which is a promise to pay a specified amount on demand or at a certain time to the lender. If both partners signed the note, both will be legally bound to repay the mortgage.

In the case where one business partner cannot meet their obligation, you may look to see if there were any oral or written contract between the two partners. An oral contract is just as binding as a written one, unless the law requires a written contract. Typically, a written contract better than an oral one because there it proves itself.

Moving forward, you may contact a Real Estate or Contracts attorney to further discuss your case.

Additional Resources: 
California Department of Real Estate
Real Estate Promissory Note
Real Estate Litigation
Contract Law Basics

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