Advice Needed - buying out a reluctant ex

Red1708

Hi

After some advice.

My partner left his ex well over a year ago. They have a house with a joint morgage that they own 50:50, they weren't married. She is still living in the property, he's managed to persuade her to put the house up for sale but it isn't selling and we are now contemplating buying her out.

They originally got a mortgage for £35k, there are 17 years left on the mortgage, he thinks there is about £20k left owing on the mortgage and the property is now up for sale for £70k. She never paid anything towards the mortgage, bills or home improvement, which can be proven. He doesn't want any hassle or quarrels and simply wants to figure out the best way forward with as little hassle as possible.

How would he got about buying her out? any advice on how much it would cost? Also, its possible that she won't agree to it, what would be his options then? I've even considered just going to the estate agents and putting an offer in on the property.

Any advice would be greatly appreciated.

alisoncar

Hi there,

you need to give us more info:

1) is the mortgage in both of their names
2) do they own the house jointly or as a tennants in common (restrictions would show up in the land registry - get your copy if unsure)
3)who paid for the deposit + mortgage (you already said it was your partner, however clarification is needed as to whether he is still paying it now? If not, when precisely he started to pay and when did he stop paying?) + house insurance + any repairs/maintanance/upgrade of the property
4) if there is no trust deed (which it appears is the case), throughout the course of the relationship (when precisely this started/ended again?)
a) did the two parties keep their finances completely separate from one another or not
b) has any discussion taken place with regards to what would happen should your partner and his ex split up when they still were together and are there any witnesses/proofs

5) just to clarify once again, you appear to think there would be an equity in the house at the moment? From the above it would appear that there should be about £50k, is that correct? If unsure please submit precise figures and dates - house price when bought, deposit put down, estimates sales price at the moment (ideally you'd get at least 3 EA estimates and then take an average, or try to find local SOLD prices on land registry). Why is the house not selling and therefore how have you come up with the sale price of £70k?

6) lastly, you say your partner ex still lives in the house. Are there any kids involved? If not, why don't you and your partner live in the house (and again, who is paying for the mortgage and other relevant expenses at the moment?)

In short, depending on your answers to above, it would appear that if your partner was to buy his ex out he would have to give her half of the equity (i.e. £25k). If she agreed to be bought out then provided you can get the mortgage trasfered into your partner's name only on both his and your name there wouldn't be much legal work involved and costs could be fairly low as most likely you'd not have to pay the EA's commission (this however depend on the contract that you signed with them so you need to double check).

If, however, there are disagreements then the process will be more costly as the only way how to get your partner's ex to sell the house (provided she is on the mortgage/land registry) is through a court order for sale. This should be granted if there are no kids involved but it will not be cheap to go down that route.

kingstreet

Steps to follow;-

- they need to agree on a value for the property (A)
- they need to establish the exact mortgage amount outstanding (B)
- now they know the equity (C) = (A) - (B)
- next they need to work out how much equity she should get and this can be upto half of (C) depending on how they agree.

So, we've agreed on a settlement.

Next, how to pay for it.

There are two ways to approach this. Your partner asks his existing lender for additional borrowing to buy her out. During this process, you can be added to the mortgage and deeds as she is being removed. This is called a transfer of equity and is handled by a solicitor, once the lender agrees to the mortgage side.

Alternatively, you can both apply for a joint mortgage with a new lender for enough money to repay the existing mortgage and buy her out. You may get a better deal by taking this route. The transfer of equity will be the same and this is done by the solicitor at the same time as the remortgage is being processed.

There are remortgage products with no fees involved, so you'd only pay the difference in the cost of the transfer of equity, perhaps £200. Doing the transfer of equity with his current lender will probably cost between £400 and £600.

To be able to borrow together, you'll need a good credit history, enough income and affordability to justify the amount needed and the lender may wish to have a valuation of the property carried out to ensure it's worth what you think it is. If the valuation is less than expected, it would enable you to use this to reduce her settlement as she would be entitled to a lower amount.

Agreement between themselves has to be a more sensible option than a legal route where the equity they are fighting over simply erodes with the legal fees involved.

BitterAndTwisted

The property may be up for sale but the occupant could be declining viewings or finding ways to discourage potential buyers.

That the ex may not have contributed to the mortgage-payments directly might not be pertinent: presumably her not making a financial contribution must have been a joint-decision so it could be seen as being unreasonably unpleasant to use this against her now. She's could have lost her partner and now she's about to lose her home of X years.

The only sensible way forward is to negotiate on the way forward. Put a reasonable price on freedom, even if this means offering her more than 50% of the equity. Either sell the property and share the proceeds after agent's and solicitor's fees have been deducted or your partner remorgages it in his name only.

If the ex is unwilling to reach an agreement your partner will need to go to court to force a sale. If there are children in the picture who need to be housed this may be unlikely to succeed.

Advice for a new partner? Stay right out of it. Nothing good has ever happened by getting involved in trying to fix other people's problems.

Red1708

Thanks for the replies, I'll try to answer your questions as best as possible.

Mortgage is in both names, unsure as to whether they own the house jointly or as a tennants in common, I'll check that out.
Its an ex council house, no deposit was needed.
My partner had his ex put onto his bank account, all of his wages were paid into it, he then transferred money into another joint account to pay the bils. Her wages never went into the 'pot' she had her own account that her wages went into, she never paid anything directly into either the current account or the bills account.
He's still paying the morgage and insurance, although technically she is now contributing approx 35% of these payments by a bank transfer into the bills account, however she's withdrawing just as much over the courrse of the month and in fact has only contributed £40 over the last two months towards these bills.
With regarding finances my partner felt it was his duty as the man, working full time to pay all of the bills and to keep her etc, which is why he put her on his bank account. Although like I said earlier she had her own account that her wages were paid into and these were never part of the 'joint finances'.
No discussions have ever taken place with regards to what would happen if they split up, they were together 25 years and really didnt think that it would be necessary to talk about such things.
The house was originally bought for £35k, there is about £20k left on the mortgage. The selling price of £70k is based on the current asking price of the property with the two estate agents its trying to be sold through.
It took over 6 months to get her to agree to put it on the market, she seems to think that he should still pay the bills as he earns more money than her and she says she doesnt have anywhere else to go, although it would appear that shes made no attempts to find somewhere either.
There are no kids involved, he left the house when they split up and she has continued to live there, for the first six months or so he continued to pay all of the bills. I did not meet him until they'd been split up for a while, I doubt that she will like the idea of him moving another woman into the house which is another reason why we expect to receive hostility towards the prospect of us buying her out.
I have to admit I am tempted just to apply for a new mortgage and put an offer in through the estate agents but I would prefer to save costs if at all possible

jamesd

Was or is the ex married to him? That will make a huge difference to the result if it applies and if it does you should ignore the rest of this post.

It seems clear from the facts that she made no contribution of any sort to the mortgage so it seems that he will be either clearly the owner (only one at the Land Registry) or can establish that in fact he is the sole owner on the basis of the payments made. If she's not on the deeds there's no reason for you two to buy her out because there's no ownership interest of hers to buy.

If she is on the deeds, ignore the rest because it only applies to the not on the deeds case.

Aside from that it appears that he can evict her because he's the property owner and she isn't. Give her one month's notice to leave before a specified date, then if she hasn't left, move her belongings moved into storage or anywhere else that they will be safe and change the locks one day when she's out. Perhaps be kind and arrange a week in a local motel for her at his expense so she has her immediate housing needs taken care of. Her rights are very close to nil. You two can move in just before evicting her if you like.

He should discuss it with a solicitor just to get things cleanly and fully legally done. The solicitor will also be able to put together a plan to deal with any ownership issues related to the property. It's a lot cheaper to do this now than later and it'll save a good deal of trouble.

Don't try to avoid getting legal advice to save money. It won't. He's already unnecessarily let her live in the house for a long time. Time to get a professional looking after things and moving them along. And do what that professional says instead of what I've written, I'm just trying to illustrate just how poor her position is and how strong his is.

Don't accept any rent money from her and don't agree to her having exclusive use of any part of the property until after discussing this with a solicitor.

Red1708

Thanks for that.

We don't want to be unreasonable with her and are happy to give her a share of the equity if it means she'll agree to us buying her out. I've checked the title deeds with the land registry and that has the house registered in both names.

We are happy for her to have all of the possessions in the house, even though he paid for them all. We literally dont want anything except the right to be able to buy her out and to get on with our lives.

No they were never married.

I know its possibly illeagal but she has already changed the locks to stop him from entering the house, so he doesnt have a key and has to make an appointment with her if he needs to go around for anything.

I think I need to persuade him to go and get some proper legal advice, he's a very laid back person but think it's time for him to start fighting his corner

Thanks for all the help

jamesd

Get a solicitor. You'll need professional assistance to proceed properly and discuss the extent of any interest she may have in the property.

There's a conflict between her name being on the deeds and use of a joint account but him doing all of the funding of the joint account from his income while hers was never part of that "joint" pot. The joint Land Registry and joint account would suggest that she has an even split, while her keeping her income independent and him doing all of the paying suggests that she doesn't have an even split. That means that you'll really need a solicitor to work out what to offer and why.

You might start by taking the purchase price and splitting it as follows:

£70,000 sale price.
15/35 of that to him for the equity he's purchased with the mortgage payments. £30k.
10/35 as his half of the rest - £20k, £50k total.
10/35 as her half of the rest - £20k total.

Whether this is fair because it ignores all of the interest he's paid over the years and all of the bills and home improvements is arguable. If they truly were having joint finances she would have been using some of that income, so it rather implies a one-sided relationship in which she had the power and exploited him financially. But here's more to a relationship than solely money so maybe he'll like to consider other factors.

RAS

If his names are on the deeds, by law he is entitled both to a key and to enter the house as and when he chooses.

BitterAndTwisted

She's not a lodger and never was one: she co-owns the property and cannot be forced out of her home unless and until she agrees to either sell the property, let the ex remortgage in his sole name, or he goes to court to force a sale. The latter will be the most expensive option.

It doesn't matter whether they were married or not. Or whether she contributed provably half of the mortgage and bills either. They were a couple and whatever the financial arrangements were, they were agreed by both of them, and presumably both were happy with that arrangement.

jamesd

BitterAndTwisted, thanks, after re-reading I note "I've checked the title deeds with the land registry and that has the house registered in both names" as well as the earlier "She never paid anything towards the mortgage, bills or home improvement, which can be proven".

The name on the deeds means that she can't simply be evicted as a lodger but that he still has a right to entry and use of the home, including with his new partner, unless an occupation order is obtained by her to prevent this, which doesn't really seem like something that would be likely to succeed unless there's a risk of violence.

It's still necessary to get specific legal advice on the matter to be sure that nothing has been missed which could change the situation to one less favourable to Red1708.