Is a joint tenant of property required to disclose to the other tenant the addition of creditors, or the presence of 3rd party creditors during a buyout deal?

Have a problem where my friend transferred his house property to joint tenancy with his girlfriend. Things were not working out, so he offered to buy out her interest, and she agreed for 60% of value payment. &nbsp;He paid her the money and she signed all property rights to him. &nbsp;The problem, is that in the same time frame, she obtained a private loan from an individual for an amount equal to 80% of the property value, using the property for collatoral. &nbsp;She did not inform my friend of the loan, and when they signed the transfer papers, she added to the title transfer clause, the words in italics &nbsp;... "transfers property and all responsibilities, "<em>including those from agreement dated xx/xx/xx."</em>&nbsp; &nbsp;None of the negotiation drafts contained that phrase, and she did not disclose that she had just obtained the loan with payments delayed for 1 year, which is apparently how long she thought it would take to close the joint tenant buyout. &nbsp;She therefore got the payout from my friend worth 60% of the property value, plus got the loan amount from the private lender for 80% of the property value. My friend trusted that the signatory papers were the same as the agreed-to draft terms, and signed off without noticing the added clause. &nbsp;After the buyout and receiving her cash share, she sent a copy of the title transfer agreement to the creditor, and the creditor has put my friend on notice for payment for the 80% loan. &nbsp;So my friend has to pay 140% of the property value, and the joint tenant was paid 140% of the property value. &nbsp; <p>Is this "legal?" &nbsp;Was the second tenant required to disclose that they had put up 80% of the property for collatoral while taking a loan for that amount, while they were negotiating a buyout with the other joint tenant? &nbsp; Is the final contract valid, since the second tenant added the words at the last moment, but did not point out the change over all of the drafts that were written? &nbsp;Even when she knew she was going to add this at the last moment without noting the change? &nbsp; Did the second tenant really figure out a legal way to get paid twice (the buyout amt + the loan for the same property)? &nbsp; Any helpful advice or previous experience with this? &nbsp;Which law practice area would this fall under? &nbsp;Thank you!!</p>


Asked almost 7 years ago in California
Categories: Contracts  Real Estate  Criminal Law

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