New York, NY asked in Real Estate Law for New York

Q: I loaned 20,000 to a family member for a housing flip. They still haven’t paid back. Can I charge interest?

The contract never gave a direct date of when the project was to be done. But it’s been finished for over a year now and I still haven’t received the money. Can I charge interest even if it wasn’t specified on the contract that I would do so?

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3 Lawyer Answers
Michael David Siegel
Michael David Siegel
Answered
  • New York, NY
  • Licensed in New York

A: You can ask for prejudgment interest at the statutory rate of 9%. You might get it. Depends on what the contract says.

Elaine Shay
Elaine Shay
PREMIUM
Answered
  • New York, NY
  • Licensed in New York

A: Generally, the terms of a contract cannot be unilaterally changed. However, you can certainly try to renegotiate the terms, especially since a family member is involved. If this turns out to be a deal that has gone bad and your family member fails to pay you back, you may sue to recover the funds you loanded and you may be entitled to 9% prejudgment interest from the date it is determined the money was owed paid back to you.

Tim Akpinar
Tim Akpinar
Answered
  • Little Neck, NY
  • Licensed in New York

A: The first thing courts tend to look at in any contractual relationship is the express agreement between the parties. If there are ambiguities or inconsistencies, a court can consider outside evidence. A court can also consider legal theories that raise issues of fairness, reliance, and other concepts. But some of those are more textbook in nature than day-to-day reality; by and large, express terms of the underlying written agreement are what courts generally give the most weight to.

Tim Akpinar

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