Decleration of Trust Between Me And My Landlord - Help!

Danjames90

I currently rent a property that the landlord is desperate to sell. Just to give you a bit of background...

This property was for sale for £270k for over a year and didn't sell. The owner decided to rent it out and we decided to move as it was a better area, we currently rent our property out.

We have been there 12 months and the landlord is again looking to sell, this time for £286k as this will clear his mortgage. He is looking at getting rid of this property as soon as he can, he is losing money each month and just wants to wash his hands of it, however he isn't willing to cut his loses and reduce the price as he wants his mortgage paid off.

In-order for me to buy this house I would need to find at least £28k, which is tied up in two property's that are also not selling.

I suggested transferring his mortgage to me but he said his mortgage company will not do this. He then mentioned a declaration of trust between us which means if I was to pay his mortgage of £1,400 a month, the declaration would guarantee me the house once I can raise the money, however the mortgage would stay in his name.

A little research seems to confirm this is something that maybe an options but I am keen to understand if anyone else has had experience with this?

If I agree to this and lets for arguments sake say I stay there for another 3 years as I cant sell my property's, will the money be going to pay off the mortgage? How do I know he isn't pocketing the cash and defaulting? Would I agree on a price now and stick to that?

What if I cant raise the cash, is it just tough?

Any advice or experience anyone has had would be greatly received.

Thanks

hazyjo

It's unlikely the property's worth more than it was a year or so ago! Prices have generally fallen, not risen. The stamp duty threshold at £250k probably stopped it selling at £270k as nobody would have wanted to pay over that. Sounds like he's upped the price to get it away from that £250k mark. If it didn't sell for £270k last time in over 12 months, I can't see it being worth more than that now.

Think very carefully about that before considering the rest of what you mention in your email.

Jx

Danjames90

I completely agree and if I was on my own and didn't have kids I would call his bluff and just stay until he sells it, which at £286k is going to be never. You know what people are like when it comes to houses, it just takes that one person to walk in and view it, fall in love with it and make an offer, probably not going to happen but I don't want that hanging over me and my family, hence me even considering this route.

I know I am paying over the odds for it but we are extremely happy there and can think of nothing worse than moving again. This way we would essentially be paying over the odds for it but we wouldn't have to come up with a deposit.

poppysarah

Danjames90 wrote: »

I currently rent a property that the landlord is desperate to sell. Just to give you a bit of background...

This property was for sale for £270k for over a year and didn't sell.

We have been there 12 months and the landlord is again looking to sell, this time for £286k as this will clear his mortgage.

Don't buy this one!

he is asking too much else it would have sold!

Danjames90

poppysarah wrote: »

Don't buy this one!

he is asking too much else it would have sold!

I know he is asking to much but not to have to up root my family is worth the extra in my eyes.

Richard_Webster

At best a declaration of trust would place an obligation on him to transfer the property if certain conditions were fulfilled. Having an obligation to do something is not the same as actually doing it.

Trouble with this is that if he decides he doesn't want to comply with the agreement you may have to got to court to enforce it. You may win the case in the end, but only after a lot of cost and stress.

Solicitors are always wary of advising people to enter into this kind of agreement because some folk have a touching faith in legal agreements and assume that having an agreement is all that's required. Is there going to be an easy way to enforce it? If there isn't don't go there.

Danjames90

Richard_Webster wrote: »

At best a declaration of trust would place an obligation on him to transfer the property if certain conditions were fulfilled. Having an obligation to do something is not the same as actually doing it.

Trouble with this is that if he decides he doesn't want to comply with the agreement you may have to got to court to enforce it. You may win the case in the end, but only after a lot of cost and stress.

Solicitors are always wary of advising people to enter into this kind of agreement because some folk have a touching faith in legal agreements and assume that having an agreement is all that's required. Is there going to be an easy way to enforce it? If there isn't don't go there.

Thanks for that Richard.

poppysarah

Danjames90 wrote: »

I know he is asking to much but not to have to up root my family is worth the extra in my eyes.

Is it worth 50k?
Cos that's almost certainly what he wants over the price it should sell for.

slyracoon

Danjames90 wrote: »

In-order for me to buy this house I would need to find at least £28k, which is tied up in two property's that are also not selling.

Offer him £250k. That way you don't need to raise the 28k and you avoid the stamp duty. If he declines then he is obviously not that desperate to sell so just sit tight. He will never sell at £286k if it failed to sell in 12 months at £270k.

He is losing money every month, don't let him shift that burden onto you just so he can clear his mortgage. Offer what you can afford and what the property is worth.

Danjames90

slyracoon wrote: »

Offer him £250k. That way you don't need to raise the 28k and you avoid the stamp duty. If he declines then he is obviously not that desperate to sell so just sit tight. He will never sell at £286k if it failed to sell in 12 months at £270k.

He is losing money every month, don't let him shift that burden onto you just so he can clear his mortgage. Offer what you can afford and what the property is worth.

I have tried this. I would still need to raise £25k so its not much different.

slyracoon

Danjames90 wrote: »

I have tried this. I would still need to raise £25k so its not much different.

That dosen't make much sense.

At £286k you need to raise £28k.

At £250k (£36k less) you still need to raise £25k?