Complicated Sale - Help!!!

SkintnScared

Hi all

Not sure if Im posting this in the right place, but my best friend is having some problems and really isnt sure where her rights are with regards to the sale of her house? Heres the story:

Bought a house 2 years ago with her BF, she sold her house and put in 135k, her bf's house never sold, so he rented it out. Her dad bridged the gap of 80k into the house and they have been paying him the rent from her bf's house to cover this.

Anyway they have split up and the house is going on the market next week. Her bf has started to get a bit funny saying that he has put loads of money into the house (living costs etc of which my friend has matched each month).

When they bought the house, it is in both of their names, but there is a note with the solicitor saying that her dad put in the 80k.

My friend is worried where her rights lay and her dad is also being really funny with her (he loves the bf) saying that if she sells he will fight her for the money. Obviously my initial thoughts were that she would get her 135k back, her dad would get his 80k back and any profit made would be split between her and her bf?

Is this correct?

Sorry quite confusing

Many thanks

SnS

PasturesNew

Is there any profit?

SkintnScared

PasturesNew wrote: »

Is there any profit?

Theyre are not sure yet, the house is getting valued and put on the market next week!

Thank you

getmore4less

What was the agreement when the place was bought?
that will take priority

IMO(some disagree) the running costs dont count towards equity unless previously agreed.

there are 2 basic ways to account for the money.

The money buys equity(1) or is a loan arrangement seperate from the house(2).

1. These are the moneys put in.
(If any improvement or asset enhancing inputs it gets very complicated.)

T = total house cost including all fees .
Fd =her deposit.
Md = his deposit.
Dd =dads deposit.
Fm = her share of the mortgage.
Mm = his share of the mortgage.
S = proceeds from the sale

Fo(her share) = ( Fd + Fm )/T
Mo(his share) = ( Md + Mm)/T
Do(dads share) = ( Dd )/T

They get back

her ( Fo * S ) - Fm
him ( Mo * S ) - Mm
dad ( Do * S )


2. loans.

They split the procceds in 1/2(if paying the mortgage 50:50)
pay 1/2 the mortgage each
she pays dad £40k
he pays dad £40k
he pays her £67.5k

You could mix the two methods having the dads money as loan so they each have an extra £40k deposit or it could be a loan to the BF so an £80k extra deposit for him, this might be simpler since there was the rent arrangment for that side of things.


To factor in the rent money any other way would require more details.
was there a mortgage on the rental who paid this.
was it net rent after costs anything held back for repair etc.

SkintnScared

Oh god! This is rather complcated isnt it!! eeek!

Thank you getmore4less thats really helpful I shall send her the details.

The BFs house was rented out and had no mortgage on it! Not sure about the net rent, repairs etc.........I shall have to ask her!

She was umming and arring whether a trip to solicitors would help before it goes on the market, but with the fees for solicitor asked me to check on here!

Think she defo needs to hotfoot it to the solicitors to get all the info before the house goes on the market! At the end of the day she doesnt wanna lose out!!

thanks peeps!

JimmyTheWig

If there is any profit worth arguing over (especially once you take into account estage agent and solicitors fees) then I would suspect that this is to do with improvements that they have made to the house. In which case it comes down to who paid for them, I guess.

Is the question over the profits? Or is it about the capital and/or shortfall?

E.g. if after paying the fees and the mortgage there is exactly 215k in the pot, is everyone happy for your friend to get her 135k and her dad to get his 80k?
(And the BF, obviously, gets to keep his house.)

But if there is only 205k left, you could argue that your friend gets 130k and her dad gets 75k. Or you could argue the same but with the BF owing her dad 5k. Or you could argue that your friend only gets 125k and the dad gets his 80k (possibly the outcome the dad is after?). Or friend gets 128.7k and dad gets 76.3k?