Declaration of trust question

gibbers

I had a declaration of trust drawn up when i moved in with my ex partner


The purchase price of the property was 195k, and i put down a deposit of 20k the mortgage is 175k

it is written in to the declaration of trust:

"mr x" and "mrs x" hereby DECLARE that they hold the property and its proceeds of sale (after discharging the mortgage and deducting therefrom the costs of sale) and the net rents and profits until sale UPON TRUST for themselves as tenants in common:
(a) as to the first £19,425 for mr x absolubtley
(b) as to 50% of the remaining balance for mrs x absolubtley
(c)as to the other 50% of the remaining blance for mr x absolubtley

my question is the property has dropped in value from the 195k we paid for it, if we were to sell for say 180k then would i get my money back first and then we have to each find half of what we owe to the mortgage company (15k) so 7.5k each.

or would the mortgage company take the negative equity out of my deposit so i would only be left with 5k.

Any info would be helpful and any questions u have i can answer

Thanks

yelf

as it says in the trust: you would receive back the £19,425, and then you have to find the 50% each.

gibbers

Thankyou, one more question im still in the house and she moved out. what would the situation be if she decided to stop paying.

many thanks in advance

yelf

is the mortgage set up as tenants in common, or are you the only person named?

gibbers

tenants in comon we are both on it.

Thanks

Mrs_Bumble

Its a joint mortgage? If so then she is jointly and severally liable for the mortgage debt and you both are equally responsible for the payment and would be pursued.

Mrs_Bumble

I would seek legal advice on the declaration of the trust, as the lender is the first charge and I suspect that they would be paid in full but I am not sure?

Do you have access to a legal helpline with your buildings and contents insurance? if not you could try http://www.communitylegaladvice.org.uk/

gibbers

Thanks for the advice im going to see the cab soon and also solicitor if i have any further questions.

luckyfool

My understanding is that as per the wording you are only getting the first 19k back after discharging the mortgage. If the net proceeds are £5k then you get that, she gets nothing and thats that.