45% 55% split on house ownership

MandyMc

I own a house with a relative, split as above. When times were good the house was worth £150k but now has a bid of £124k on it. The mortgage is for £144k. Am I right in that if there'd been a profit I'd have got 45% of it and now that a loss is likely I am liable for only 45% of the loss? Am I lookly at this too simply. I can call my solicitor in the morning but wanted any advice if possible this evening.

00ec25

if that is the only condition attached to the ownership (ie there is nothing covering one of you getting back theeir deposit before the equity is divided 45/55) then yes, you are liable for 45% of the shortfall needed to clear the mortgage (plus any other costs in selling it such as legal fees, EA fees etc)

MandyMc

So if we accepted the offer of 124k against the debt does that have to be split too ( 55/45) before we divide the loss or does the full 124k come off the debt of 144k and then we split the loss?

00ec25

assuming you do not have any written agreements which state how to handle this between yourselves then no, any cash received goes against the mortgage, as this is not enough to clear the mortgage in full then you split the extra needed 45/55

the full 124 goes against the 144, leaving 20k still to pay .
that 20 is split 45/55 so (if you are the 45) you have to pay 9k - where you get that money from is your problem, the same as your relative has to find the 11K that is theor share
either you get it from your own savings or, if you have no savings, then you will have to borrow it from elsewhere

MandyMc

Thanks. This was exactly my way of thinking - just not what the other party calculated. Thankfully there are documents at the solicitors & we plan to settle from savings as you outlined.