house sale equity split - what counts as contributions?

randomlife

Can anyone clarify what can be claimed for under property contributions when deciding share of equity amount when a property is sold? (Joint tenancy - one co-owner is claiming more than 50% and forcing other co-owner to agree to an agreed sum that is purely contribution based).

Which of these can be legally claimed for as contributions?
Mortgage payments
Deposit
Rates
Electricity
Heating
TV license
Phone - line rental
House Insurance
Furniture/appliances

Would paying for all food bills and giving the co-owner a car count as contribution under the argument that it was support of co-owner but at an economic disadvantage to you?

Any advice/comments appreciated.

poppysarah

Were they as a couple?

getmore4less

What did the initial agreement say?


To do this properly you have to convert money into equity at thetime of input which is hard if you start to try and count running costs because these should not count.

The starting point is purchase this is relatively easy.

You add up the total costs of purchase and split into 3

2 inputs(deposits costs etc) and the loan.

you then look at how you service the loan and split based on that.

that gives you your starting equity.

eg £100k house with 6k costs
one puts in £5k the other 10k you split the costs and the mortgage 50:50

ownership is in the ratio 50.5:55.5


Selling you do the reverse net proceeds after costs is split at the same ratio.

THEN you pay of the mortgage from you shares in the mortgage % in this case 50:50.

THis is the important bit split the procceeds BEFORE the mortgage is paid off.

It gets complicated if there have been any capital investment to the asset, so things like new/replacemnt fixtures decorating etc need to be done on equity split at the time they are costed in.

Most people make the mistake of money in == money out then split the proceeds.


Most of the other things are not relevent to the capital asset so need to be considered seperately as if you had rented, otherwise you need to include all spending so food holidays pub etc.

randomlife

Not couple - parent and child.

randomlife

Agreement was simply joint tenancy with verbal agreement of 50/50 split regardless of input. Goalposts have now changed as parent is forcing a sale and using right to buy discount as bargaining tool to gain higher than 50%. I have outlined the circumstances under Mortgages section for further input. Nightmare complicated disheartening familial situation....

GDB2222

That's easy, then, if it's a family dispute there's no reasoning with them. They each get lawyers, then pay any equity in the property to them.

Or they act like adults and sort something reasonable out. When they start to get petty about who paid the TV licence, it's just plain daft, and they deserve the purgatory that they put themselves through.

sonastin

In terms of property ownership, I'd say anything that you'd pay if you were renting, e.g. utilities, TV licence, contents insurance, don't form part of the contribution to owning the house. Costs that you wouldn't incur in renting, e.g. mortgage, buildings insurance, significant renovation and decoration, etc count as contributions to the cost of owning the property.