Tenants in Common agreement. One partner is living abroad for 2 years....

Hemel_Saint

Hope someone can offer some advice here.

My daughter bought a 2-bed flat with her boyfriend 2 years ago. They took out a “Tenants in Common” agreement.

Unfortunately their relationship has broken down (although they are still 'friends').

My daughter is now moving abroad for 2 years, to work.
She has decided not to force the sale of the flat, but is going to continue paying her element of the mortgage whilst hoping to rent out her bedroom, whilst she is away.

This is all with the verbal approval of her partner...

Are there any legal papers / agreements she should be looking into to ensure she is fully covered whilst she is out of the UK?
Are there any other things she needs to consider?

Nb. Someone told me that as my daughter will be living away from the flat for a large proportion of the year; that she loses some elements of rights over the property. Is this correct?

A loaded question, but hope someone can advise.
Need anymore info, please ask.

Many thanks.

Richard_Webster

If the house is jointly owned he can't sell without her agreement, but without going to court, she can't force a sale without his agreement..

If he wants to sell she says that she will only sign if she gets £X out of the sale proceeds. If the difference between what she asks for and what she is entitled to under any agreement that she has signed is a lot more than the likely costs of going to court he would go to court so she wouldn't get away with it.

Of course he doesn't have to sell and if she wants out then he may try to dictate the terms, and if they are really unreasonable she may have to take him to court.

People have to realise that in these situations having an agreement of some kind is better than not having one, but it is not a universal cure all and doesn't necessarily mean that the parties end up with what they "really" would be entitled to under any agreement. It depends on their negotiating strength at the time and the likely costs of going to court over the point at issue.

Hopefully none of the worst case scenarios will occur and they will behave fairly and reasonably towards each other.

Whether they need another agreement will depend on the wording of the existing one. Sadly some of these agreements are drawn up quickly and they don't always deal with all possible situations - e.g. in times of property boom they deal with sharing profits if the house increases in value but do not deal with losses or negative equity situations.

One cause of disagreement is where they haven't thought through all the implications and one says "I thought that if X happened then I would be entitled to £y or ZZ% and the other says that isn't what the agreement says.

If both are sensible it is fair enough for them to revise the agreement to clarify the position if it isn't clear already. However the nasty truth is that if things go really wrong then, as mentioned above, agreements only go so far - they reduce the scope for argument in court and the time and costs involved, if it really comes to it.

Hemel_Saint

Thanks for taking the time to respond Richard.

I will get the original agreements from my daughter and see if they can be 'revised', if appropriate.

Does anyone have any comments regarding the point around moving abroad and not living in their property.
Will my daughter lose any rights or ownership if she is not living in the property for a large percentage of the year?

Thanks all.

HAMISH_MCTAVISH

Hemel_Saint wrote: »

Will my daughter lose any rights or ownership if she is not living in the property for a large percentage of the year?

Unlikely... as long as she continues to pay her share of the mortgage and any associated bills, and makes clear an intention to return.

If she wants to rent her room out to a lodger then it should be clear that she has found the lodger, that she collects their rent, and that she continues to pay the mortgage and a share of bills.

What you want to avoid is a situation that drifts into this lodger or any future lodgers paying the remaining tenant directly, who then pays the whole mortgage payment. As it could then be argued that your daughter has abandoned her tenancy and failed to pay her share of the mortgage. This wouldn't let her off the hook for liabilities for the mortgage, but may decrease her share of any future sale proceeds if it were to be contested.

Richard_Webster

Will my daughter lose any rights or ownership if she is not living in the property for a large percentage of the year?

The deed of trust or other agreement that they signed regulates how their shares are calculated. Unless that document mentions the possibility of one not living in the property it shouldn't make any difference.

It is only if there is no agreement at all that living abroad might be afactor the courts would look at in deciding what shares each should have if it ended up in court.

Hemel_Saint

Folks really helpful advice. Thanks so much...

any other 'watch outs' keep em coming. Thanks everyone

00ec25

HAMISH_MCTAVISH wrote: »

If she wants to rent her room out to a lodger then it should be clear that she has found the lodger, that she collects their rent, and that she continues to pay the mortgage and a share of bills.

What you want to avoid is a situation that drifts into this lodger or any future lodgers paying the remaining tenant directly, who then pays the whole mortgage payment. As it could then be argued that your daughter has abandoned her tenancy and failed to pay her share of the mortgage. This wouldn't let her off the hook for liabilities for the mortgage, but may decrease her share of any future sale proceeds if it were to be contested.

nothwithstanding any intention to return, the OP's daugher will not be physically resident at the property, therefore the new person cannot possibly be their lodger, any new person would be a tenant

A full blown tenancy agreement would need to be in place which, given it is then a shared housing situation between an absent LL and an uninvolved resident owner occupier, would have to be carefully drafted to ensure that a tenancy is granted over the specific demise not the whole property.

Not only will she have to meet all the unsual obligations and costs of being a LL herself as her ex is not the LL, but in addition, as the daughter is abroad, she would also have to:

a) have a UK address and contact person/representative for the service of notices; and
b) register with HMRC on the non resident landlord scheme for tax purposes
http://www.hmrc.gov.uk/international/nr-landlords.htm

xylophone

She needs to consult the mortgagee (bank? building society?) and the flat's insurers.