Tennants in common troubles

njh82

Hello

I am looking for advice or peoples experiences on sorting out tennants in common agreements. My partner and I went to sign our contracts yesterday and when the question came to %'s he suddenly changed his tac from what we discussed. We are now at a deadlock.

Basically he has put in a 20% deposit towards our joint mortgage on a one bed flat. We are spending £10,000 on rennovations such as a second toilet (currently the only one is an en suite) a new kitchen and all appliances, a complete repaint, re-carpet and in spring landscaping the garden.

As I am paying half the mortgage re-payments each month and putting in half of the rennovation costs I would like to have an agreement which states if we were to break up and sell, we would pay off the mortgage, he would get his deposit back and then anything left would be split 50/50.

He initally felt this was fair but now wants to look at his deposit as an investment and have an agreement whereby we split it all 70/30 as he feels that he will have lost potential interest that his lump sum could have been making if it weren't in the property.

My issue with this is that 'IF@ we were to be lucky enough to sell the property at a profit, it is likely that the rennovations and improvements that will have added to its value. It seems unfair that I am repaying 50% of the mortgage and 50% of all works and further repairs/maintenence etc but shoudl only recieve 30% of any profits made.

I am sure there are a lot of people who feel I am being unfair. I appreciate I wouldn't be able to get a mortgage as would never have a lump sum like that and that by putting it down he has reduced our repayments but at the end of the day he wouldn't be able to get that size mortgage without my income being taken into account and he certainly couldn't afford the repayments alone.

Any advice? Am I being unreasonable by suggesting that if the worst happens he gets his money back and a 50% share of any profit?

sonastin

You are not being unreasonable. His proposal for dividing the house is also not unreasonable but I would be worried about the timing of it. I would be worried that it is an indicator of bigger troubles in the relationship. This ought to have been sorted earlier and whilst you thought it was, the fact that he didn't or has changed his mind would be troubling me.

Soot2006

I would have killed my OH for thinking like this.

I brought in the largest part of our deposit and we signed a deed to the effect that we would get back out deposits and any surplus would be split 50/50. If not sufficient for return of deposit, then we would get proportional return of what was available. If nothing available (i.e. neg eq) then we agreed to share the debt 50/50 and take the loss. After all, it's a relationship first and a business agreement second IN MY OPINION.

Svenena

If he's putting in 20% and the remaining 80% is being split equally between you (40% each), then surely his total contribution is 60% and your's is 40%? I personally think this would be the fairest way to divide things.

njh82

Hi thanks for the comments. I agree it has worried me slightly as it should be about investing int he relationship and future together first and money second. However, the reason this is all being discussed is because I am aware its a huge step and we aren't married and I want to make sure my back is covered shoudl the worst happy- i tend to be a hope for the best but expect the worst type person.

Hmm, difficult though as we need to agree and as I pointed out, at present , if we don't decide, it will simply be split 50/50 regardless of the deposit paid but then he says this means I have got him over a barrell as he has to comply with my way or I won't sign>

tyllwyd

He's not taking into account that he is getting the benefit of the interest on his deposit, it's just that it is going towards reducing the mortgage. So you are both benefiting by half of the interest that you would have paid on that 20K. To say that your half of that benefit this would equate to an additional 20% of any profit on the property - well it depends on what house prices do in the future, but that seems way too much to me. Perhaps acknowledge it by splitting 55/45 - or maybe even less, like 52/48?

BTW I agree with the others, bringing this up at the last moment seems unchivalrous at best, and it would make me worry a bit about his attitude in the future.

poppysarah

Why's he changed his mind? Is that as important to know as the details?

**curlywurly**

Be aware also, OP, that if you are tenants in common, and one of you should unfortunately die, the survivor would only own half of the property (or whichever % you eventually decide upon). This is the case no matter what any will says.

njh82

yes this is why we want tennants in common as we are not married so if one of us dies then we want our families to get our 50% and decide what to do rather than an automatic handover.

My issue with a split is that I feel bad that he has put in the whole deposit so want to safeguard that he gets that back above all else and therefore a split 9 whatever it is) could result in me essentially getting part of his deposit paid back to me rather than him which does seem unfair

poppysarah

Do all the sums for prices being the same, going up, coming down ... and show what the figures all mean in each case for each of you...

What's your long term aim? To live in this with him forever? What's his?

Do the sums in £ not %
and then do them in % not £...

Each way will come out different...

What's worst case senario for each of you? You split up and lose money on the place and can't afford to buy anywhere else as you owe debt still (negative equity)

If you're not planning on being together for at least 10 years then I'd pull out of the whole thing now... People get wierd about money and it's best to have a row now before you've signed anything.

njh82

I have to say that of course the idea is to stay together but the reality is that relationships do fail and if provisions aren't put into place right at the start, things only get messier.

I have witnessed enough of my friends go through this, buying a property is bigger than getting married in many respects and I want to ensure that I am not left in a vulnerable.

Can I just check-- if we were to break up and sell with negative equity- are we then responsible for the same % debt as profit- in other words if we split profits 50/50 we both owe half the debt but if he split it in his favour he would be liable for a higher percentage of the debt?