Cohabitation and dividing the house

slipperhero

Apologies if this is in the wrong section - maybe there isn't a right one for this query! My partner and I split up a number of months ago after cohabiting for 8 years without any sort of agreement. At the time we agreed that everything was joint, even though she has always earned more that me. Now that we have split up, she wants to buy me out of my share of the house bought 4 years ago in the somewhat inflated market. It seems unfair to me that I should lose out on my share because of the state of the market. Over the years we have paid off about £26,000 on the original purchase price (including deposit), but she has offered me £6,000 on the grounds that she earned more money, and that value of the property is reduced compared to when we bought. I'm not disputing any of these things, but I'm also carrying a student debt of about £7,000 that I took out in the last year of the relationship whilst retraining as a teacher. Although I had a bursary, I thought it would be worth taking to loan in order to contribute more to the household. I know as cohabitees that she has no liability for the debt, but it seems unfair that her offer won't even cover the loans I'm walking away with. My question is: Am I stuck accepting the reduced valuation on the property? If she stays, the market will pick up eventually and she will be quids in. I refused her offer and she immediately became very acrimonious. She is threatening to sell (it is a bit of a DIY nightmare at the moment) and she will lose out, probably more than me! It seems unfair...

Again, I'm sorry if this is not the correct forum for my problem (is there one?).

Thank you in advance.

diable

The market could also crash further and you would be liable to the debt as well. I would take legal advice.

*Louise*

Are both your names on the mortgage?

Is the property in negative equity?



The amount to buy you out will depend on the market value of the house at the moment. I'm no legal expert but 6k doesn't seem like much....

slipperhero

Thanks for your quick replies. It's not in negative equity, though definitely worth less than what we paid. There's probably at least £16k equity, and possibly more. Though we spent £10k+ doing work on it (rewire, full skim, relocating loft hatch, painting, understair loo, etc etc), the place still needs more work done so I realise that this money is lost - to me, anyway. Estate agents are coming around this week to give their opinions on valuations. I don't really know what the best and worst case scenarios are, as not much is selling in this area at the moment. I'll see what they say. As I mentioned before, she's always earned more than me (though spent more as well ), but I'm willing to take a smaller cut, take my debt with me, and leave her with virtually all furniture, fixtures and fittings.

It just seems pretty hard luck on me if I've got to take the hit of the reduced market while she can wait for things to turnaround (if and when). Maybe I'm being unreasonable - I suppose it's a risk for her if things don't improve... I'm just baffled by the animosity. Things were ok until we tried to agree on a figure. When I suggested we should both get advice, I was caricatured as wanting half of everything. I don't. I just don't want to feel like the last 4 years of scrimping and saving to pay off the mortgage were for nothing. Whatever we settle on, it will be years before I have enough to put a deposit down on somewhere else. I know people come out of relationships with a lot less to show, but I swear I just want a fair outcome.

slipperhero

Sorry, forgot to mention... yes, it's a joint tenancy.

smartpicture

slipperhero wrote: »

It seems unfair to me that I should lose out on my share because of the state of the market.

I'm not sure why this seems unfair - if the value of the house has fallen, then someone is going to 'lose out on their share' - are you saying that she should bear all the losses? Or maybe you just want to wait until house prices increase - in which case you need to be willing to lose even more of your share if house prices were to fall further, and you need to be able to keep paying your share of the mortgage until prices rise again. Unfortunately, when you invest money in a house, in whatever proportions, then you have to be prepared to bear the losses as well as the gains - both of you.

slipperhero

Thank you for your comment. I did mention the possibility that I was being unreasonable, and I thought I made it clear that I do not think that she should bear ANY losses. But even if the house is valued such that there is only £16k equity (and it may be more), the offer of £6k seems to me unfair, considering that we have an equal share in the house. I apologise if I came across as self-righteous - I assure you I am not.

But I take your point. A settlement has to be based on the value at the time, whether it turns out better for one party or the other. Is that a fair summary of your answer to my question?

kindofagilr

I would imagine if say there was 16k equity in the house then you would be entitled to 8k? so she may only want to pay you 6k but she may find she cant pay you only that?

If both your names are on the mortgage which you state they are then I cant see how she could do that?

I know nothing officially I am just stating how I would magine it would happen when a couple who both own the house splits?

Claire2831

Hello,

Perhaps put to her that you would be happy to agree on 8K, say that this would allow you to pay off the 7K student debt you have and would leave you with 1K to use for a first month rent + deposit somewhere else to give you a fresh start.

I think that if you phrase it in a way that makes her think that by giving you the 8K you will be able to move out and subsequently you will both be able to move on with your lives quicker then she will be more likely to go for it (rather than just saying you think the current offer may or may not be unfair).

Hope that helps and very best of luck to you.

thorsoak

Did you both pay equally to the mortgage?

DVardysShadow

You are not giving sufficient information to see what a fair settlement should be, but you are harping on about your loan and feeling hard done by. Please just forget about the sources of funds - or let us ignore them.

You need to tell us:

• Initial purchase price
• How funded [Mortgage, funds from partner, funds from you]
• Contributions to mortgage
• Likely value if sold
• Likely Estate Agent and selling fees if sold on the open market.

You would do better taking this problem to the House Buying, Renting & Selling forum which deals with this problem frequently