unmarried & splitting up. who gets what?

NOTSUREWHATTODO_3

hi everyone.

some of you may remeber ages ago that me and my now ex were having problems. we tried but we have now amicably split. we are unmarried but own a flat together. she is now a student and gets a bursary as her income while she is studying. i pay all bills including mortgage and have done since february this year.

we bought the place in 2007, she contributed most of the deposit (approx £3000 more than me) and we have always split the bills down the center until this feb where i took on them all. i have paid £1000 extra into the mortgage of my own back last year so this helped equity a bit. i also designed, built and paid for a complete new kitchen on my own over xmas last year which has greatly improved the place.

so in summary. i now dont owe her anything from the inital deposit as the £3000 extra in deposit was easily covered by me paying all her bills for the last six months which are still ongoing. i have put in alot of equity which will help in the value of the place hopefullly.

neither of us wants to see the other out of pocket. there was talk of her keeping her bursary going, and then once she has finished her studies, she will sign everything over to me, as long as i keep paying all the bills until she finsihes uni. does this sound normal?

is there any legally binding document we can both write to say our intentions and sign, as we dont want to get solicitiors involved at all if we can avoid it as they are expensive and unnessesary as we are still very good freinds and often talk candidly. does anyone have any experioence of a split like this? any help or advice would be greatly appreicated.

thanks A:money:

nzmegs

You will need a solicitor to have the house signed over to you. your mortgage company will also want to know as they need to be sure you can pay it all alone. you may not be able to get the full mortgage. You should get the house valued so you can be sure that the equity is being fairly split.

I would think that an hour with a solicitor would be worthwhile paying for. i am sure they would help you get it all sorted out legally as having a home together is a big thing. if you are still friends then there will be no arguments and just the legalities to go through.

Contact your bank first to find out how the mortgage can be passed to you.

NOTSUREWHATTODO_3

nzmegs wrote: »

You will need a solicitor to have the house signed over to you. your mortgage company will also want to know as they need to be sure you can pay it all alone. you may not be able to get the full mortgage. You should get the house valued so you can be sure that the equity is being fairly split.

I would think that an hour with a solicitor would be worthwhile paying for. i am sure they would help you get it all sorted out legally as having a home together is a big thing. if you are still friends then there will be no arguments and just the legalities to go through.

Contact your bank first to find out how the mortgage can be passed to you.

thanks for your reply nxmegs,

i understand that i will need a solicitor present to look over and arrange for the house to be signed entirely over to me. this wont be until she has finished her studies tho in 14 months time! i should be ble to pay for everything on my own as i effectivly have been for 6 months and counting with no problems as yet (touch wood). so hopefully getting a competitie mortgage on my own when the fixed rate ends in 2012 wont be a problem, depending on the economy and my equity! i think i will get the house valued now and when the split happens formally in 14 months.

as i was saying with the equity (or lack of) she will pass everything over to my ownership at the end of her studies and walk away without taking any money or equity. of course this is only agreed in principle at the moment. this is due to if she formally leaves now, takes her half of the flat (probably a little equity) she would cripple me financially, and loose her income from her bursary entirely for the next 14 month, effectivly crippling her. informally she will have already left, but her name remains on everything for now, and i pay all bills.

is this a good idea for us both, or am i walking blindly into an equity battle with no happy outcome for us both? any advice is greatly appreciated!

vaio

as you are paying for it all now I can't see any reason why it doesn't get signed over to you now.

I can see tears in 14 months time if it's not signed over now and GF has a change of heart about the equity split

As others have said, see a solicitor

gadgeteer_2

vaio wrote: »

I can see tears in 14 months time if it's not signed over now and GF has a change of heart about the equity split

I agree. This is no time for sentiment.

Get the house signed over to your name. If you feel kind then let her continue to live there rent free if you so desire. But do it knowing you hold the cards rather than risk a change of heart which will cost you thousands in legal fees to sort.

smartpicture

vaio wrote: »

as you are paying for it all now I can't see any reason why it doesn't get signed over to you now.

You can't get it signed over unless you can convince the mortgage company that you qualify for a mortgage on your own salary alone. This is NOT the same thing as'being able to afford it'. Talk to them and get the facts first - or to amortgage broker.

Agree though that you need to sort this now, it's amazing how things change with the passing of time and the obtaining of new partners...

zzzLazyDaisy

Have you had the place valued?

Is there any equity in it at the moment or is it in negative equity?

JaneRN

To put the property in your name - you effectively apply for a motgage in your own name and the application considered like any other application. You will need a solicitor to do the land registry bit - just like with any other motgage application.
What I can't figure out is how you are going to pay your ex her share of the equity, are you intending to increase your motgage loan to cover this amount?
Is she moving out now and walking away from any further financial committments?
It's a tricky one if you are relying purley on trust. You may agree now to get three independent valuations and pick the mean and use that as the future "selling price". Then come time for you to apply for a motgage on your own, minus any legal costs incurred to close one mortgage and arrange another & legal - solicitor & land registry. Take this off and agreed selling price and split anything left.
The alternative is to get the mean valuations when you are ready to get your own mortgage - but you may feel grieved about this as you have in effect paid for X years of mortgage and if the value has increased she "morally" shouldn't be entitled to benefit from this.
On the other side of the coin house prices may drop and that you mean you potentially being worse off?
Sorry I've waffled a bit there but it is a gamble really, on how the housing market pans out and if both parties are happy to stick to their word.

NOTSUREWHATTODO_3

JaneRN wrote: »

To put the property in your name - you effectively apply for a motgage in your own name and the application considered like any other application. You will need a solicitor to do the land registry bit - just like with any other motgage application.
What I can't figure out is how you are going to pay your ex her share of the equity, are you intending to increase your motgage loan to cover this amount?
Is she moving out now and walking away from any further financial committments?
It's a tricky one if you are relying purley on trust. You may agree now to get three independent valuations and pick the mean and use that as the future "selling price". Then come time for you to apply for a motgage on your own, minus any legal costs incurred to close one mortgage and arrange another & legal - solicitor & land registry. Take this off and agreed selling price and split anything left.
The alternative is to get the mean valuations when you are ready to get your own mortgage - but you may feel grieved about this as you have in effect paid for X years of mortgage and if the value has increased she "morally" shouldn't be entitled to benefit from this.
On the other side of the coin house prices may drop and that you mean you potentially being worse off?
Sorry I've waffled a bit there but it is a gamble really, on how the housing market pans out and if both parties are happy to stick to their word.

Thanks jane et al,

i think i should be okay to get a mortgage on my own, although im not to confident on this. is there a way to find a mortgage broker that gives free advice? or a calculator (moneyfacts has helped) lol. a solicitor would come later as you say to formally do the land registry and switchover legalities.

the agreement was that she would simply sign over all equity and property to me once her uni course is finsihed. she has moved back to her parents, but is still getting her bursary. if we formally split on paper now then she looses that and effecitvly has no income for the next 14 months (she is doing a masters so cant work as it takes her all hours of the day 7 days a week to keep up!).

we were wondering if we were to write this agreement down and both sign it in front of a witness then it would be kinda legally binding from our point of view. if we split on paper now, then i would be left with potentially not enough for a mortgage on my own, and a bigger bill to buy her half. worst case scenario is that we would have to sell and split the equity (most probably negative by £5k). she would be cash rich for a while then the money would run out and she would be stuck. i would be skint, having to live at home again and miserable.

if we stay as we are (she isnt living here anymore) then i can manage the bills etc, and in 14 months would go through the legal side with her giving me everything and walking away.

i know its a gamable but we trust each other (v rare after a split i know, but its very amicable) and it suits us both now and in the future. if she wanted to take her half of any equity of course then valuations, solicitors and the like would have to get involved now, but hopefully this wont be needed until we are ready to change the ownerships in 14 months.

is this too risky or does it sound okay? obviously im very new to this and am very worried as its my past and future that could get destoryed!

thanks everyone and keep them coming!

zzzLazyDaisy

Okay, what you really want to know is can you sign something that will be legally binding on both of you, when you come to transfer ownership in 14 months time?

Yes you can sign something, and you may both consider it to be morally binding.

Will it be legally binding? No. Why? Because the house is in joint names, that is the legal position and it stays the legal position until you do something about it by getting her name off the mortgage and the deeds.

Assuming you bought the place as joint tenants rather than tenants in common (confusingly, these are forms of ownership, not tenancies) you can 'sever the tenancy' but all this would achieve would be to have it noted at the land registry that you each own half the property (or whatever shares you agree on).

Which actually isn't going to take you much further.

Once you come to transfer the house into your name, the equity or negative equity will have to be dealt with. If there is equity she is legally entitled to half although you and she can agree privately that she won't take anything, if she is agreeable to that.

If there is negative equity, then you will have to find the shortfall before you can re-mortgage, and even then the lender may well insist on a 10% deposit. In that case she would be responsible for half the shortfall (though not the extra money needed for the deposit, of course), but you could agree to release her from that obligation if you are agreeable to that.

NOTSUREWHATTODO_3

zzzLazyDaisy wrote: »

Okay, what you really want to know is can you sign something that will be legally binding on both of you, when you come to transfer ownership in 14 months time?

Yes you can sign something, and you may both consider it to be morally binding.

Will it be legally binding? No. Why? Because the house is in joint names, that is the legal position and it stays the legal position until you do something about it by getting her name off the mortgage and the deeds.

Assuming you bought the place as joint tenants rather than tenants in common (confusingly, these are forms of ownership, not tenancies) you can 'sever the tenancy' but all this would achieve would be to have it noted at the land registry that you each own half the property (or whatever shares you agree on).

Which actually isn't going to take you much further.

Once you come to transfer the house into your name, the equity or negative equity will have to be dealt with. If there is equity she is legally entitled to half although you and she can agree privately that she won't take anything, if she is agreeable to that.

If there is negative equity, then you will have to find the shortfall before you can re-mortgage, and even then the lender may well insist on a 10% deposit. In that case she would be responsible for half the shortfall (though not the extra money needed for the deposit, of course), but you could agree to release her from that obligation if you are agreeable to that.

thanks lazydaisy,

that was the info i was after! i thought that us both signing something would only be morally binding, but that is okay with me for now. i know she would honour it and so would i. i would have to get her to agree about the negative equity shortfall though, with me finding the remainind 10% deposit minimum for a mortgage on my own if need be. fingers crossed the housing market will stagnate now instead of dropping off a cliff like everyine seems to think!

i think the 14 months would allow me to put some savings aside perhaps, plus give us sometime to settle and not make any rash decisions. im fully prepared to see a solicitor and get it sorted, and have put my detials into the moneyfacts mortgage calculator with some rough figures to see if its possible to get a mortgae on my own. i got back about 5 pages of possibles so i think im okay. but wont know for sure until its in writing. this is all based on the current 0.5% rates so by waiting i may shoot myself in the foot! risky.

i think if there is equity (i pray to god there is) in 14 months then she is happy to agree morally in writing to give that to me. by keeping quiet about her leaving im basically allowing her to continue with her bursary which is worth £6k over the term. if we split formally, she looses it. thats were the mutual deal comes in.

i think i need to have a talk with her agian and see what she says. does such a document exist or template for an arrangement such as ours or would i need a solicitor to draw one up (obviously its not legally binding, but might hold more water if contested)? hopefully it will all be simple and amicable as it looks from the early discussions that both parties will do okay out of it, provided the market doesnt slip further.

really thanks for your replies all so far and please keep them coming. its really helping me to get my head sorted round a very tricky and unfortunate situation.

A