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    • Mort123
    • By Mort123 14th Oct 16, 9:41 PM
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    Mort123
    Selling and equity split after a break u
    • #1
    • 14th Oct 16, 9:41 PM
    Selling and equity split after a break u 14th Oct 16 at 9:41 PM
    Hello,


    I'm hoping for some advice.


    My boyfriend and I bought a property together with different deposit amounts and own it as tenants in common.


    He put in 50k deposit and I put in 30k. We decided to split everything else (mortgage payments, fees, stamp duty and a new bathroom) 50:50.


    Naively, in the throes of love we had an unclear arrangement about how we would split the sale of the house.


    We have split up and I feel completely trapped in the house and unclear what my financial options are and whether I can afford to buy on my own.


    Can anyone help with a suggestion of what might be reasonable based on the facts?


    Thank you


Page 1
    • silvercar
    • By silvercar 14th Oct 16, 9:48 PM
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    silvercar
    • #2
    • 14th Oct 16, 9:48 PM
    • #2
    • 14th Oct 16, 9:48 PM
    Has the property changed in value?

    One way would be to take your initial deposits back as they were put in and then to split the remainder 50/50. assuming that either the property has increased in value or that some of the mortgage has been paid back.

    Given that you've been paying the mortgage 50/50, you should both get back your deposits (as paid in) and the amount reduced on the mortgage (50/50) as you've both paid it equally. Then you can discuss amicably the split of the remainder.
    • QuiteConfused
    • By QuiteConfused 14th Oct 16, 11:01 PM
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    QuiteConfused
    • #3
    • 14th Oct 16, 11:01 PM
    • #3
    • 14th Oct 16, 11:01 PM
    When I split with my ex (tenants in common) he bought me out and paid me the deposit I had put in plus 40% of the equity (minus the deposit he had put in) as our mortgage split was 60/40. Was the simplest way. If there is enough equity I would suggest you each take your deposit and then split the remaining 50/50.
    • Thrugelmir
    • By Thrugelmir 14th Oct 16, 11:03 PM
    • 51,295 Posts
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    Thrugelmir
    • #4
    • 14th Oct 16, 11:03 PM
    • #4
    • 14th Oct 16, 11:03 PM
    You need to have an adult discussion with your ex.
    “A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against ‘a rainy day’.”
    • getmore4less
    • By getmore4less 15th Oct 16, 8:12 AM
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    getmore4less
    • #5
    • 15th Oct 16, 8:12 AM
    • #5
    • 15th Oct 16, 8:12 AM
    if you have paid everything else 50:50 then the 2 basic ways to do it are

    A.get your money back split equity 50:50
    B. full equity based shares less your share of the debt

    do the numbers and see what rage you have.

    I will do an example you can do it with real numbers.

    £200k property(purchase price all fees and the bathroom)

    deposit 1. 50k 2. £30k mortgage 120k == £60k each

    mortgage now £110k £55k each

    Value now £240k

    A. get your money back
    £240k -£80 - £110 = £50
    1. £50k + £25k=£75k
    2. £30k + £25k = £55k

    B Equity less share of the debt.

    1. £50k + £60k = £110k = 55%
    2. £30k + £60k = £90k = 45%

    1. £240k*0.55 - £55k = £77k
    2. £240k*.45 - £55k = £53k
    • Mort123
    • By Mort123 15th Oct 16, 5:21 PM
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    Mort123
    • #6
    • 15th Oct 16, 5:21 PM
    • #6
    • 15th Oct 16, 5:21 PM
    Thank you. It has increased in value dramatically, so quite a lot is at stake.

    One idea I had was to split the increase in value this way:

    The first quarter of the increase 60:40, according to our deposit amounts which were equivalent to 1/4 of the property value at the time we bought. And then the remaining 3/4 of the property 50:50, as the increase in this portion of the property value is owned by the loan from the bank, which we contribute to equally.

    Does this sound sensible or am I being too nice? I don't think a 50:50 split of increased value will work as he always pointed out he should benefit from putting more in upfront.

    Thank you
    • silvercar
    • By silvercar 15th Oct 16, 5:33 PM
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    silvercar
    • #7
    • 15th Oct 16, 5:33 PM
    • #7
    • 15th Oct 16, 5:33 PM
    Legally if it is held as joint ownership that is 50/50 unless specified differently.

    I think you are being too nice (a) because your deposit enabled him to buy a property of higher value and (b) because selling up releases him from ties to you and allows him the freedom to buy elsewhere and get all his equity back.

    The first quarter of the increase 60:40, according to our deposit amounts which were equivalent to 1/4 of the property value at the time we bought. And then the remaining 3/4 of the property 50:50, as the increase in this portion of the property value is owned by the loan from the bank, which we contribute to equally.
    If this has any merit then the calculations should be on the 1/4 after the mortgage is deducted and so include the deposits paid - so his deposit of 50k has risen to x and your deposit of 30k has risen to y.

    I don't think a 50:50 split of increased value will work as he always pointed out he should benefit from putting more in upfront.
    If you know he will play hard ball, you should also start at a demanding point, so you can meet somewhere in the middle.
    • xylophone
    • By xylophone 15th Oct 16, 7:31 PM
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    xylophone
    • #8
    • 15th Oct 16, 7:31 PM
    • #8
    • 15th Oct 16, 7:31 PM
    do the numbers and see what rage you have.
    Let's hope not!
    • getmore4less
    • By getmore4less 15th Oct 16, 7:43 PM
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    getmore4less
    • #9
    • 15th Oct 16, 7:43 PM
    • #9
    • 15th Oct 16, 7:43 PM
    Thank you. It has increased in value dramatically, so quite a lot is at stake.

    One idea I had was to split the increase in value this way:

    The first quarter of the increase 60:40, according to our deposit amounts which were equivalent to 1/4 of the property value at the time we bought. And then the remaining 3/4 of the property 50:50, as the increase in this portion of the property value is owned by the loan from the bank, which we contribute to equally.

    Does this sound sensible or am I being too nice? I don't think a 50:50 split of increased value will work as he always pointed out he should benefit from putting more in upfront.

    Thank you
    Originally posted by Mort123
    That's similar to B. above except the first 1/4 should be split 3/8 5/8 if 80k was a 1/4 of the cost to buy.
    • Sleazy
    • By Sleazy 15th Oct 16, 8:02 PM
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    Sleazy
    Another way of looking at it (and probably fairer from your ex's viewpoint) is that he put 62.5% of the deposit down, you put 37.5% down and everything else was shared equally. Once sold, it would seem reasonable for him therefore to receive 62.5% of the proceeds and you 37.5%.

    Whether or not you can afford to buy on your own or not is your problem, not his.

    The Legal situation may be different, but just stating what seems fair and reasonable (why should you benefit from his larger deposit)? If he invested more money in the stock market than you, his gain (or loss) would be greater than yours. Fortunately your house has increased in value, so you both gain - he more than you.
    *** IF IN DOUBT, BLAME BREXIT ***
    • itchyfeet123
    • By itchyfeet123 15th Oct 16, 9:42 PM
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    itchyfeet123
    Another way of looking at it (and probably fairer from your ex's viewpoint) is that he put 62.5% of the deposit down, you put 37.5% down and everything else was shared equally. Once sold, it would seem reasonable for him therefore to receive 62.5% of the proceeds and you 37.5%.
    Originally posted by Sleazy
    That disadvantages the OP by disregarding that s/he has paid more than 37.5% when accounting for mortgage payments etc.

    The simplest way would be to tally up the total amounts paid and divide the proceeds (i.e. money from sale minus remaining mortgage, agent fees, etc) from the sale in those proportions. Eg paid to date deposits 50k + 30k and mortgage, say, 10k +10k. So ex has paid 60k and OP 40k, and they split proceeds 60% to 40%. The more that has been paid towards the mortgage, the more even the split becomes, to the point that if you had finished paying the mortgage (and ignoring interest for simplicity) ex would have paid 50k +120k and OP 30k +120k, making the proportions 170/320=53.1% for ex and 150/320=46.9% for OP.
    • exiled_red
    • By exiled_red 15th Oct 16, 9:56 PM
    • 108 Posts
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    exiled_red
    That disadvantages the OP by disregarding that s/he has paid more than 37.5% when accounting for mortgage payments etc.

    The simplest way would be to tally up the total amounts paid and divide the proceeds (i.e. money from sale minus remaining mortgage, agent fees, etc) from the sale in those proportions. Eg paid to date deposits 50k + 30k and mortgage, say, 10k +10k. So ex has paid 60k and OP 40k, and they split proceeds 60% to 40%. The more that has been paid towards the mortgage, the more even the split becomes, to the point that if you had finished paying the mortgage (and ignoring interest for simplicity) ex would have paid 50k +120k and OP 30k +120k, making the proportions 170/320=53.1% for ex and 150/320=46.9% for OP.
    Originally posted by itchyfeet123
    It's all a complex situation, the OP's ex could say that because of their higher deposit their 50% share of the mortgage was paying off a greater share of principle loan and the OP's would be paying more interest to gain a 50% share (if you were to consider the hypothetical situation where they each had loans to buy a 50% share of the property the one with the higher share of the deposit would be making lower monthly repayments, therefore by paying 50% of the joint repayments they are maintaining a higher share of the property). There are so many ways to argue it as there was no agreement at the outset.

    This could get messy and I guess you could both argue it however you wanted. I assume you will have to come to an agreement between the two of you and I guess it comes down to what both your priorities are, whether you each want to maximise your financial return or you want the other person out of your life and make a clean break. If you want 50% then it may drag on for a while, if I were you I would start with 50:50 as a negotiating position and see what your ex comes back with, you seem reasonable and willing to negotiate, but don't let the ex take advantage of this.
    Last edited by exiled_red; 15-10-2016 at 10:00 PM.
    • parkrunner
    • By parkrunner 16th Oct 16, 1:13 PM
    • 249 Posts
    • 358 Thanks
    parkrunner
    Hello,


    I'm hoping for some advice.


    My boyfriend and I bought a property together with different deposit amounts and own it as tenants in common.


    He put in 50k deposit and I put in 30k. We decided to split everything else (mortgage payments, fees, stamp duty and a new bathroom) 50:50.


    Naively, in the throes of love we had an unclear arrangement about how we would split the sale of the house.


    We have split up and I feel completely trapped in the house and unclear what my financial options are and whether I can afford to buy on my own.


    Can anyone help with a suggestion of what might be reasonable based on the facts?


    Thank you


    Originally posted by Mort123
    What does your ex say?
    • getmore4less
    • By getmore4less 16th Oct 16, 1:32 PM
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    getmore4less
    That disadvantages the OP by disregarding that s/he has paid more than 37.5% when accounting for mortgage payments etc.

    The simplest way would be to tally up the total amounts paid and divide the proceeds (i.e. money from sale minus remaining mortgage, agent fees, etc) from the sale in those proportions. Eg paid to date deposits 50k + 30k and mortgage, say, 10k +10k. So ex has paid 60k and OP 40k, and they split proceeds 60% to 40%. The more that has been paid towards the mortgage, the more even the split becomes, to the point that if you had finished paying the mortgage (and ignoring interest for simplicity) ex would have paid 50k +120k and OP 30k +120k, making the proportions 170/320=53.1% for ex and 150/320=46.9% for OP.
    Originally posted by itchyfeet123
    Using the amount paid on the mortgage interest is a very bad way to work out equity.
    • itchyfeet123
    • By itchyfeet123 16th Oct 16, 2:17 PM
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    itchyfeet123
    Using the amount paid on the mortgage interest is a very bad way to work out equity.
    Originally posted by getmore4less
    Good thing my approach doesn't do that then.
    • Mort123
    • By Mort123 16th Oct 16, 6:53 PM
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    Mort123
    That they want the equivalent of their deposit amount, so 60%...
    • silvercar
    • By silvercar 16th Oct 16, 7:13 PM
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    silvercar
    That they want the equivalent of their deposit amount, so 60%...
    Originally posted by Mort123
    If you have been on a repayment mortgage you have been repaying some capital off the mortgage 50/ 50, so I'd kick that proposal out for starters.
    • Mort123
    • By Mort123 19th Oct 16, 2:06 PM
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    Mort123
    What would you suggest as an alternative? I'm finding it all a little tricky to get my head round.
    • Pixie5740
    • By Pixie5740 19th Oct 16, 2:21 PM
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    Pixie5740
    I assume you own the property as tenants in common with a 50/50 split and there is no Deed of Trust. Therefore you could legitimately claim half the equity. However, I think either way suggested in post 5 would be fairer.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • danslenoir
    • By danslenoir 19th Oct 16, 3:26 PM
    • 212 Posts
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    danslenoir
    I don't think a 50:50 split of increased value will work as he always pointed out he should benefit from putting more in upfront.

    Thank you
    Originally posted by Mort123
    Would ex be offering to bear more responsibility for your outstanding debt if you were in negative equity on the basis that he put more deposit in?
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