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Old 01-26-2008, 08:35 AM   #1
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Unhappy Accused of frauding relative out of house and savings

Could my father-in-law have a case of fraud against us per the details below?

My husband's elderly father is having a breakdown of mental clarity and judgement and is accusing us of frauding him out of property and savings. He lives in a rental home that we own and he has signed a lease agreement to live there. He has never really paid his rent over the last five years except a few times that my husband really pushed him. We have only asked for as much as we need to pay taxes, insurance and other costs (about 3 times less than what we could be renting it for). We didn't make him pay or take legal action because my mother-in-law was terminally ill. She passed away last year, and since shortly after that, he keeps wanting to move his other son into the house. My husband's brother is a terrible deadbeat and user and abuser. We have firmly put our feet down that he is not to move in to the house. It is in our lease that only my father-in-law can live there. The father is blinded by the lies of younger son and thinks we are unreasonable and "mean" for not letting him move in. It has escalated to the point we are threatening an eviction if he tries to move the other son in or if he doesn't start paying some rent.

Now he is threatening pursuing us for frauding him out of property and savings. Over 20 years ago, father was in danger of losing a property containing his home and a building where he ran his business. My husband started making payments to keep him from losing the property. They had a contract drawn up through an attorney showing that my husband would loan father the money to pay off the property and make some specified repairs and renovations to the property, and in exchange, when the property was sold, my husband would own the equity. Father retired in 2002 and had to sell because he had no savings to keep the property up. We got $180K for the property and my husband only asked for $100K of it in order to pay off our investment property, the same one father was eventually to move into. We left the other $80K with father to help take care of ill mother, but younger son pressured father into spending money on him, and money was gone in one calendar year.

Unfortunately, we cannot find the 20 year old contract showing the arrangement, but we do have several other documents. We have a letter from the same attorney from just prior to the contract that outlined the options that my husband and his father had for arranging the loan. We have contracts signed for the property to do the specified renovations. We have tons of returned checks that my husband wrote to his father that total tens of thousands of dollars. We even have a copy of the returned check that father wrote to my husband in 2002 for the sum of $100K dollars with a note on the memo line that says "partial payment for balloon loan".

Due to the fact that we have never made any legal moves to enforce his payment of rent over the last five years, it seems like it appears we have made a verbal agreement to take care of him for his life. We did NOT make that agreement for no rent, and we NEVER agreed to take care of the deadbeat. They both claim that upon the writing of the $100K check, we verbally agreed that my husband's parents and the brother could live in our property for the rest of their lives.

Does anyone see any holes in our defense to this accusation? Could we be sued for fraud? Would any statutes of limitations apply? The check written to my husband after the sale of the property was in Dec. 2002.

Thank you very much from a nervous and upset wife and daughter-in-law.
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Old 01-28-2008, 06:50 PM   #2
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Default Re: Accused of frauding relative out of house and savings

I think by the time you put all that evidence together and show what happened it will be very hard to make any argument of fraud against you. But save all evidence and every check, letter etc
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Old 01-31-2008, 02:24 PM   #3
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Default Re: Accused of frauding relative out of house and savings

We have now engaged an attorney to handle evicting my father in law. I'm glad, because today, we received a letter from an attorney hired by father in law saying he wants ownership of 'his' property back. Our attorney assured us we would be OK because "everything in real estate is on paper", meaning that claims for verbal agreements just don't stand up in this kind of matter. There is clearly no written agreement that father in law has any ownership - no contract, my husband's name only on the deed, lease agreements, etc.

Would you say that it is true that in real estate that only what is documented is what is upheld in court?

This is the most upsetting and nerve-racking thing we've ever faced. Thanks for feedback.
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Old 02-04-2008, 11:14 AM   #4
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Default Re: Accused of frauding relative out of house and savings

Generally yes but sometimes equitable arguments can be made if e.g. somebody has paid for an extended period, or it is fundamentally unfair to deny some right etc
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