Q: Significant loan made to contractor to purchase land and build homes 4 homes. Money spent, homes not completed.
Significant loan made to contractor to purchase land and build homes 4 homes. 3 of 4 homes in different stages of build. Estimating 1/2 of loan funds spent on those homes, yet contractor stated they were out of funds. I decided to hire a lawyer to foreclose on the properties knowing I wouldn't recoup my money, but would then file lawsuit to recoup funds. The contractors lawyer stated that because I exchanged emails with the contractor that I was considered a business partner and therefore could not foreclose. I then asked if I'm a business partner than I should be able to look at the business bank account statements. But then I'm told that I'm not that type of partner. I don't understand the law. It is okay for someone to take a loan and use 1/2 the money and not complete the contract and use the other half anyway they want knowing the law will let them get away with it? How is this just? My lawyer simply said "You entered into a loan, and it went bad".
A:
If you are lender on a Note secured by a Deed of Trust, then foreclose on the collateral parcels. When a note deficiency occurs then sue borrower on that deficiency. If you are found to be a full fledged partner, then you are possibly liable for the partnership debts, but it will be a hard argument unless your statements clearly show a partnership. Get the foreclosure going and see what happens, instead of just declaring a loss.
You need a competent MO attorney, and apparently have little to lose in this.
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