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Hi Atty, would like to consult my problem thru the example below. Thank you very much.
Pedro, married but separated (not legally) and sister Petra, married to Juan decided to purchase a lot worth 2.5M of 264 sqm, with 3 houses. At that time, Pedro's money is only.5M and Petra's is 1M. Since money is not enough to pay the 2.5, they requested the seller to transfer first the title and make a bank loan to pay the balance, wherein the seller agreed. However Deed of Absolute Sale was under the name of Petra and Juan, since Pedro has marital problems. The loan was approved in the amount of 1M. All expenses incurred on the loan was charged to Pedro and all the interest therewith.
The lot has 3 houses, the parties decided that 2 houses be rented and income from it will be equally divided and will help in the payment of the amortization, the remaining house was use as home of Petra and Juan. Pedro decided to use the free space within the lot for buy and sell business which is on and off. Eventually on the ½ share of the lot where the 2 houses for rental is situated, Pedro constructed his own house.
On the first year Petra and Juan was paying the Monthly Amortization (MA) since they have a balance of .25M share, on the 2nd year Pedro is paying 50% of the MA, since there is a rent income share and Petra was the one collecting rent income pays the balance of the MA. (note: MA is auto debit on Petra’s account)
On it's 3rd year Petra and Juan decided to buy a car and told Pedro that he will solely pay the house MA for they will have a MA on the car, Petra still collects the rent income and Pedro agreed with the understanding that in the end rent income will be divided equally.
On the 4th and 5th year (last year for the MA) Pedro continued paying the MA, and the bank was fully paid, and Title was released.
Pedro has now common law wife named Becky and Pedro decided that his 50% of the lot share will be transferred under the name of Becky with a daughter with her.
Pedro now asked his sister Petra to subdivide the title and his share to be named under Becky. Petra came into computation of her advances for payment of MA and on the income earned during those years.
On Petra’s computation, advances totalled 265K and rent income of 360K. Sps. Petra and Juan decided on themselves that the sharing for the rent income should be 2:1 (2/3 for the spouses and 1/3 for Pedro) and the 1/3 share of Pedro still to be not given since Pedro made use of the free space for his business (which the is on and off) and the spouses will make it as quits (also the free space is situated on the area share of the spouses.) and because at the time they bought the property the spouses released money more that Pedro releases. (Please note that the 1M bank loan, expenses incurred for that was charged to Pedro.
Pedro discussed this to Becky (accountant) to make a computation on the alleged payables of 265K to the spouses. On Becky’s computation and understanding that rental income will be divided equally. So the payable to the spouses would only be 85K. No t to mention the transfer fees that both parties will share equally.
Sps. Petra and Juan would not make action for the transfer unless and until they will be paid of the 265K. Pedro on the other side will not pay the 265K due to reason that no mutual agreement, spouses only made the decision.
Pedro now fears that they might use the title as mortgage again for their bank loan, because of the spouses plans to build new house.
What should Pedro do?
Pedro, married but separated (not legally) and sister Petra, married to Juan decided to purchase a lot worth 2.5M of 264 sqm, with 3 houses. At that time, Pedro's money is only.5M and Petra's is 1M. Since money is not enough to pay the 2.5, they requested the seller to transfer first the title and make a bank loan to pay the balance, wherein the seller agreed. However Deed of Absolute Sale was under the name of Petra and Juan, since Pedro has marital problems. The loan was approved in the amount of 1M. All expenses incurred on the loan was charged to Pedro and all the interest therewith.
The lot has 3 houses, the parties decided that 2 houses be rented and income from it will be equally divided and will help in the payment of the amortization, the remaining house was use as home of Petra and Juan. Pedro decided to use the free space within the lot for buy and sell business which is on and off. Eventually on the ½ share of the lot where the 2 houses for rental is situated, Pedro constructed his own house.
On the first year Petra and Juan was paying the Monthly Amortization (MA) since they have a balance of .25M share, on the 2nd year Pedro is paying 50% of the MA, since there is a rent income share and Petra was the one collecting rent income pays the balance of the MA. (note: MA is auto debit on Petra’s account)
On it's 3rd year Petra and Juan decided to buy a car and told Pedro that he will solely pay the house MA for they will have a MA on the car, Petra still collects the rent income and Pedro agreed with the understanding that in the end rent income will be divided equally.
On the 4th and 5th year (last year for the MA) Pedro continued paying the MA, and the bank was fully paid, and Title was released.
Pedro has now common law wife named Becky and Pedro decided that his 50% of the lot share will be transferred under the name of Becky with a daughter with her.
Pedro now asked his sister Petra to subdivide the title and his share to be named under Becky. Petra came into computation of her advances for payment of MA and on the income earned during those years.
On Petra’s computation, advances totalled 265K and rent income of 360K. Sps. Petra and Juan decided on themselves that the sharing for the rent income should be 2:1 (2/3 for the spouses and 1/3 for Pedro) and the 1/3 share of Pedro still to be not given since Pedro made use of the free space for his business (which the is on and off) and the spouses will make it as quits (also the free space is situated on the area share of the spouses.) and because at the time they bought the property the spouses released money more that Pedro releases. (Please note that the 1M bank loan, expenses incurred for that was charged to Pedro.
Pedro discussed this to Becky (accountant) to make a computation on the alleged payables of 265K to the spouses. On Becky’s computation and understanding that rental income will be divided equally. So the payable to the spouses would only be 85K. No t to mention the transfer fees that both parties will share equally.
Sps. Petra and Juan would not make action for the transfer unless and until they will be paid of the 265K. Pedro on the other side will not pay the 265K due to reason that no mutual agreement, spouses only made the decision.
Pedro now fears that they might use the title as mortgage again for their bank loan, because of the spouses plans to build new house.
What should Pedro do?
