Borrower asserting costs to close a sale

[Barry H.]

Hey BP Lenders and Joint Venturers....I have a tough one and looking for guidance.  

Borrower came to me for $325K in a JV-Lending deal.  Standard type deal where I lend the Acquisition and the quantified rehab (no formal estimates at time of acquisition - much trust here as we have done biz together before).  Partner (Borrower) handles all rehab, prep's and sells, we split gross profits 50/50.  Except......When Note was due (8 months), Borrower submitted an Excel with $50K that he expended ABOVE the borrowed $325K ($100K was supposed to be rehab, now he is claiming it is $150K rehab and he spent $50K without telling me).  The Prom Note (notarized, not recorded) references "projected" sales prices and anticipated profit of $125K to me, etc but is (unfortunately) silent on this potential issue - except it says Borrower needs to keep property (and improvements) insured etc.  

As you may guess, property is up for sale now, Borrower continues to pay DOT interest until sold and gets a credit for interest against my 50% of the profit split (which I agreed to), but he says he is adding in his $50K of additional expenses and he needs to get paid back before the split is calculated, rendering the "split" about ZERO now, because property is only worth 80% of what he said it would be. I asked for some sort of compromise and he is indicating NO.

Sorry for the long story. My question is what PRECEDENT is out there in real estate law (if any) where he can "change the deal" and claim these additional build costs which were not in the original lending/JV agreement? Thanks in advance for any insight.