Tenants in common mortgage issue

LoftonSwitchy

Hello,

Would really appreciate some advice on this situation.

Person A is in a significant amount of debt, approx £80k, however they own 90% of a flat valued at £200k. The remaining ten percent is held in trust by trustees B & C to cover a loan made at the time of purchase. There is no mortage on the flat at present.

Person A would like to use the flat to raise the money to clear debts. They currently have no income but their partner, person D, who has no debts or mortgage, is willing to get a mortgage to release the equity to clear the debts.

When Person D approached their bank, they were told they would not be able to get a mortgage if they bought a share of the 90% as the bank did not allow more than two names on one set of deeds.

It was suggested that person D then bought the entire 90% but again the bank refused as the remaining 10% is held in trust.

The simplest solution it seems, would be to buy the 10% share held in trust and 40% from Person A. Releasing the necessary equity and still leaving Person A with 50% of a flat and no mortgage.

There is no guarantee that trustees B & C will agree to sell their share though.

So the questions are these:
Can they refuse to sell if the person with majority share, and who is resident, wants to sell?
Can they refuse to sell to a specific person?
Can they refuse to accept the price offered if person A would accept it?
Is there a way to get a mortgage without buying them out?
If debt situation gets worse, can the creditors force A to sell the house?
If so what happens to B & Cs share?

Appreciate this is a long post and not well explained, I'd also appreciate any advice you can give.

sonastin

If B+C's only interest in the property is related to the loan made to enable A to purchase the property then B+C should have no problem selling their 10% provided that the loan is repaid in return. If they don't agree to selling it, it will be because there is more to this tale than the cold facts that you have posted.

Are any of A's debts secured against the house at present? That will have some bearing on what happens to the house if A defaults on the current debts.

deary65

This reads very like a question that would be asked of a law student!

LoftonSwitchy

There are always more issue than the cold hard facts will give, and it is possible that B&C would refuse to sell to person D or indeed help out person A. The initial loan was negotiated as part of a divorce.

Currently there are no debts secured against the house but at least one of the creditors has said it has contacted the land registry to see if Person A is a home owner. I believe they can force the house to be sold to pay the debts, which is why I asked what would happen to B&C's share if that wa the case.

puddy

LoftonSwitchy wrote: »

Hello,

Would really appreciate some advice on this situation.

Person A is in a significant amount of debt, approx £80k, however they own 90% of a flat valued at £200k. The remaining ten percent is held in trust by trustees B & C to cover a loan made at the time of purchase. There is no mortage on the flat at present.

Person A would like to use the flat to raise the money to clear debts. They currently have no income but their partner, person D, who has no debts or mortgage, is willing to get a mortgage to release the equity to clear the debts.

When Person D approached their bank, they were told they would not be able to get a mortgage if they bought a share of the 90% as the bank did not allow more than two names on one set of deeds.

It was suggested that person D then bought the entire 90% but again the bank refused as the remaining 10% is held in trust.

The simplest solution it seems, would be to buy the 10% share held in trust and 40% from Person A. Releasing the necessary equity and still leaving Person A with 50% of a flat and no mortgage.

There is no guarantee that trustees B & C will agree to sell their share though.

So the questions are these:
Can they refuse to sell if the person with majority share, and who is resident, wants to sell?
Can they refuse to sell to a specific person?
Can they refuse to accept the price offered if person A would accept it?
Is there a way to get a mortgage without buying them out?
If debt situation gets worse, can the creditors force A to sell the house?
If so what happens to B & Cs share?

Appreciate this is a long post and not well explained, I'd also appreciate any advice you can give.

it will take 2.5 men to fill the bath with pyrex jugs over the period of a weekend

or something like that anyway