Advise for a friend desperately needed; relationship split and neg equity!

Storm

The main issue to me is that her ex isn't communicating - it's going to be very difficult to come to an agreement if they can't sit down together to have an adult conversation. It may be worth seeing if there's a local mediation service that can facilitate them sitting down to discuss the house & bills issues.

The figures you quoted really don't add up to me - the lodger is paying £350 a month, your friend is paying £550 a month = £900 - if the mortgage is £600 at the moment then there's no way the bills come in at £300 a month - he's not contributing anything at the moment, and probably making money off her! I think it's fair that she says she'll only pay £360 a month max - 1/2 the rent & 1/2 the life assurance (though she should look into a cheaper one!) and as the lodger is there then I think this should actually be less because of his rent - I'd reckon £125 off to allow £100 of his rent for monthly bills - £235 a month therefore.

Sorry for the rambling, I tend to write as I think!

Jaggers_2

MurrayMint wrote: »

What if she paid for 4 years, the value didn't recover to positive equity and then he defaulted. If the mortgage company still wouldn't lend her enough, she could loose the property, have paid for years, without living there and still be liable for the debt. I know that's worst case scenario, but there seems no way of safeguarding against the actions of the other.

Absolutely. Looking at the other side. What if she let the house go and then went bankrupt. How would that affect her? The ex would loose his house and may well end up liable for the shortfall on the sale, however is that her concern?

Jaggers_2

Sorry about my last post, that sounded so brutal! I am a cuddly bear in real life - honest!

pebblespop

why would the ex boyf stop paying?? surely this would affect his credit rating as much as hers.

MurrayMint

Jaggers wrote: »

Sorry about my last post, that sounded so brutal! I am a cuddly bear in real life - honest!

No, valid point! Is that a cuddly grizzly bear :rotfl:

MurrayMint

pebblespop wrote: »

why would the ex boyf stop paying?? surely this would affect his credit rating as much as hers.

Hi Pebblespop,

Hopefully he won't, but has threatened it. To be fair, it was during a row and obviously he was hurting terribly.

The other thing is that he's taking a lot of time off work and so there is the possibility that he could loose his job.

Of course his credit rating would be ruined, but we don't know what's going on in his head? Maybe he doesn't care right now?

Throbbe

Storm wrote: »

The main issue to me is that her ex isn't communicating - it's going to be very difficult to come to an agreement if they can't sit down together to have an adult conversation. It may be worth seeing if there's a local mediation service that can facilitate them sitting down to discuss the house & bills issues.

Seconded. I believe Relate offer this service.

If her employer has any sort of employee assistance programme it may also cover this (for free!)

Fire_Fox

Has your friend removed her name from all utility bills, council tax etc.? She should also change the joint account arrangements - if he runs up a debt she will be liable. Is there a formal agreement in place regarding the let? Did your friend and/ or the mortgage company agree to this subletting arrangement?

I am no expert but from where I am sitting, it's clear the bills must be split 50/50 between the ex and the new tenant. The proportion of money paid for rent only should go to your friend, as it is her half of the house that the new tenant is renting. Then the mortgage payments must be divided 50/50.

It might be worth getting a free hour of legal advice. It is possible for two friends to purchase a house together, where their financial interests are protected separately. It may be possible to convert the existing marital arrangements - but probably only if a formal separation has taken place.

MurrayMint

Thanks Fire Fox.

No there's no formal letting agreement. Although the idea was discussed as they were splitting, she didn't actually know about the tenant until he was moving in. The tenant is a friend of the ex's.

I don't think the mortgage company know either. It would affect their insurance etc wouldn't it?

Fire_Fox

They may be breaking the terms of the mortgage by subletting, it could invalidate the insurance as this person has unhindered access to the property, and certainly will affect the council tax ....:eek:

Your friend is in such a dodgy position right now, she needs proper legal advice urgently. The first hour is sometimes free from divorce solicitors. You could argue she has a squatter living in her home as she has not given permission for this person to be there, nor is she benefiting financially from the arrangement, nor does she know for sure that the mortgage is actually getting paid ... :eek: