Renting my half of the mortgage to the other owner

jivebunny

I would like to ask for some advice on an ‘offer’ I have received from my ex regarding our house and whether you believe it is fair. Plus is there something I’m overlooking which could lead to me coming out of it badly?

We recently are separated but were not married. We own a house together as tenants in common (50/50 equal deposit paid and equity). Joint mortgage. The house is currently on the market but we both still live in it.

Everything is quite amicable at the moment and I am relatively happy staying in the house until we sell it. It’s a decent size, we have a room each and the house is in a desirable area. Despite the current market, houses are still selling at a reasonable frequency in the area.

My ex is not so happy. She has recently started seeing someone else but he shares a house with several other people. She does not currently bring her new fella round to the house if I’m there. This makes it difficult for them to have time on their own together.

Due to this she has suggested taking on the mortgage herself, if I agree to move out elsewhere (I’d move into a shared house, which would be cheaper and I will eventually end up doing this when the house sells anyway).

I’m cautious though. I’m not against the notion in principle but I don’t want to overlook anything. The plan is to ask a solicitor to draft something which says:

• I move out and she pays me occupation rent (I think that is the correct term) to cover my half of the mortgage*

• I continue to pay my share of ground rent and maintenance (a pretty nominal amount)

• The house must stay on the market and be actively marketed

• The agreement must be reviewed when our fixed rate mortgage ends in a year’s time

• I must be allowed to leave some belongings in the roof/shed etc. She can use any of it if she wants but obviously can’t sell it.

• Irrespective of the additional mortgage paid by her, any profits (or indeed losses) will still be split 50/50 after sale (mortgage is largely interest only. Only about £50 a month is paid off)

I know she’ll look after the house well and will largely end up taking care of the sale (though I can help if required). I’ll get a bit more spare cash as I’ll be in a house share, but ultimately will be living in a far lower standard of accommodation.

We’ve only been in the house for a year and it’s a new build. We’ve both spent several thousands carpeting/tiling/doing the garden, paying stamp duty etc and the mortgage repayments are currently about £250-350 a month cheaper than the rental value for the property. I view this cheaper mortgage a benefit of the initial outlay. If I move out I no longer benefit from this but she will.

My issue is that while I’m happy to charge her occupation rent for only for my half of the mortgage, I feel it’s likely that within a few months her new fella will move in a reap the benefits of the house which I paid for. He’ll use my stuff – bringing the associated wear and tear - and only have to pay half the mortgage, which would be ~£150 a month less than what I would get if the house was rented it out: (Market rental value – mortgage repayment)/2

I’m also concerned that when he inevitably moves in it may all be happy families and they may decide they don’t actually want to sell up anymore, which keeps my tied to the house and leaves me ejected from it. Meanwhile the fixed rate ends and BoE base rate goes up; as does the mortgage.

* Should the occupation rent my cover the mortgage or rental value? If I ask for the latter it may be too much for her to pay for on her own. Or can it change if he moves in (however she may not tell me if he does)?

I don’t yet know how any of this would affect our mortgage or insurance.

Bear in mind I’m not particularly unhappy with the current situation. However I’m wary that this may get very difficult if she starts inviting her fella over every night when I’m there.

Can anyone offer any comments of suggestions? Thanks for reading and apologies for the essay.

jivebunny

RE: the thread title: I mean 'renting my half of the *house* to the other owner', not mortgage.

RAS

Drop the price to get a quicker sale if she is unhappy.

Jeffrey_Shaw

You cannot rent a house (or even half a house) to someone who already owns it (solely or jointly).

jivebunny

Jeffrey_Shaw wrote: »

You cannot rent a house (or even half a house) to someone who already owns it (solely or jointly).

I'm probably explaining it incorrectly. I think this explains what I'm on about:


[world wide web dot] familylawweek.co.uk/site.aspx?i=ed1746

Summary
The right to an occupation rent arises when one party is actually or constructively excluded from his or her property. The party excluded may seek occupation rent from the party remaining in the property. A relationship breakdown will often be regarded as a constructive exclusion. In the domestic context, the right to occupation rent will frequently be cancelled out by a claim against the excluded party for re-imbursement of mortgage interest payments....

Thanks

robpw2

why do you have to be the one to move out ?

jivebunny

robpw2 wrote: »

why do you have to be the one to move out ?

I wouldn’t want to take 100% of the mortgage on myself. It’s too expensive and I wouldn’t pay that price to stay in it. So me staying on my own there is not an option.

I don’t *have* to move though. I could stay put and we both continue as we are.

Benefits of moving out are:
- Shared houses are cheaper than my half of the mortgage and I quite like living in them
- Keeps the peace
- Removes the risk that she might start bringing the new bloke round the house. This could get difficult.

But I’m not desperate. It’s got to be a fair deal.

silvercar

I think you have to assume the minute you move out the new bloke will be round a lot more than now. Quite possibly moving in.

Any reason why he can't buy you out?

jivebunny

silvercar wrote: »

I think you have to assume the minute you move out the new bloke will be round a lot more than now. Quite possibly moving in.

Any reason why he can't buy you out?

They've not been together long enough for that type of commitment. They were mates before so they have known each other for a while but they've only actually been together for a couple of months.

If they had only met recently they'd just be dating and moving in wouldn't be on the cards for some time. But as they know a lot about each other already this will be less of an issue, I'm sure.

But even so, you wouldn't buy a house with someone after a couple of months.

You're right though, I would expect that he'd be round every night for a couple of months before the inevitable happens and he moves in. Then, her mortgage gets reasonable again and he gets to use what I've paid for at a bargain price.

The initial idea was to say that she covers the mortgage but if anyone else moves in it goes up I get my share of the rental market value.

This I'd be OK with. But it's whether the legalities of it all would allow it and whether all holes are patched so I don't get screwed over in some way I haven't thought of.

BitterAndTwisted

She needs to remortgage or you sell up. Nothing else makes any sense long-term.

Jeffrey_Shaw

Either way, what the parties negotiate between themselves is irrelevant from the mortgagee's viewpoint.
They remain jointly and severally liable for 100% of the mortgage payments (i.e. not 50% each).