Resolving share of 50/50 owned home

00ec25

please be aware that you are NOT getting a lodger - you do not live there so they would be a tenant of yours not a lodger.

however, strictly speaking , you own the house 50/50 with brother therefore half of the rent is actually his - this is how HMRC will see it for tax purpsoes unless you draw up a very clealr tenancy agareement that you and your tenant sign as LL and T

PasturesNew

Maybe you're asking your brother for money that wouldn't be due if you sold up and split the proceeds between you.

e.g. If you bought it for £100k and your deposit was £10k, mortgage £90k - and if the place were now worth £90k, and you sold it, how much of your deposit would you get back?

The mortgage payments you've made I feel are a red herring. Your brother has not gained from these; you were meeting your financial obligations. The room was there if you'd wanted to live in it.

It might be that, given the actual facts/figures, there is nothing for your brother to "buy out".

To "buy out" your half - he'd have to get it valued, then raise a mortgage - and come up with his own deposit.

Without actual figures, this isn't something that's easily discussed in a forum.

poppysarah

Did you not discuss this before you bought it? Is there anything written down?

ticktack_2

carohf wrote: »

I own a 50/50 share in a mortgaged house with my brother. I no longer live in the house and have asked if my brother would like to buy me out. He has declined as he can't afford it.

As buying my share is not possible, is it fair for me to ask for repayment of the deposit and extra mortgage payments I paid? This could be done by renting my room out to a lodger until the money is paid back.

My brother is happy to take on the full mortgage himself but does not want to to have a lodger, and can not afford to pay me back my share of deposit etc without rental income.

What is the fairest option for both of us in this situation?

Always a mistake to do business with family without having a clear legal agreement in black and white. The fact that it's family doesn't make it easier when circumstances change, it makes it harder.

If he can't or won't buy out your share, he's effectively living in a shared-ownership property. He should be paying rent on the 50% he doesn't own.

He can pay you rent, or you can move back in. Seem to be the only available options.

BitterAndTwisted

00ec25 wrote: »

please be aware that you are NOT getting a lodger - you do not live there so they would be a tenant of yours not a lodger.

however, strictly speaking , you own the house 50/50 with brother therefore half of the rent is actually his - this is how HMRC will see it for tax purposes unless you draw up a very clear tenancy agreement that you and your tenant sign as LL and T

That is not correct: please do not forget that the brother continues to live in the property, so anyone who moves in with him will be a lodger whether the OP lives there full-time or not. Drawing up a tenancy agreement for a lodger would be completely pointless and a huge red-herring.

But that won't be an issue, the brother can afford all of the mortgage-payments alone and does not want to share his home with anyone. I don't blame him. I can see a family feud on the horizon and that is most definitely not an attractive prospect.

carohf

Many thanks for all your thoughts on my predicament and yes I do regret not having made a contract with my brother prior to purchase on what to do should circumstances change!

We each paid £10,000 towards deposit and I added an extra £16,000 to help reduce the mortgage as well as my share of the monthly repayments. I've asked for repayment of my extra payment and deposit = £26,000.

My brother doesn't have any savings and can't remortage as his income isn't high enough.

I don't want a family rift and will just walk away from it to keep the peace if it comes to that. Put it down to a very expensive lesson, but have to admit I definitely feel I got the short straw (no-one but myself to blame!)

I'm starting to think negotiating a pay back agreement might be the way forward - £100 pm for 22 years. Something like that?

ticktack_2

carohf wrote: »

Many thanks for all your thoughts on my predicament and yes I do regret not having made a contract with my brother prior to purchase on what to do should circumstances change!

We each paid £10,000 towards deposit and I added an extra £16,000 to help reduce the mortgage as well as my share of the monthly repayments. I've asked for repayment of my extra payment and deposit = £26,000.

My brother doesn't have any savings and can't remortage as his income isn't high enough.

I don't want a family rift and will just walk away from it to keep the peace if it comes to that. Put it down to a very expensive lesson, but have to admit I definitely feel I got the short straw (no-one but myself to blame!)

I'm starting to think negotiating a pay back agreement might be the way forward - £100 pm for 22 years. Something like that?

Do you and your brother own the property as "joint tenants" or as "tenants in common"? There's a couple of webpages at http://www.netlawman.co.uk/info/co-ownership-property.php and http://www.netlawman.co.uk/bizdoc/tenants-in-common.php?docid=PRre02 explaining the difference and why it's important, and how you can easily change from being "joint tenants" to "tenants in common".

I take your point about not wanting a family rift. I would feel the same way. But you might be able to show your brother this kind of information and explain that this is the kind of thing that should have been considered before you bought the property, and ask him for suggestions on how to resolve the issues. Unless he's a particularly hardhearted brother, surely he would not feel justified in taking all the benefit of the ownership and leaving you with nothing.

Emmzi

get the place valued. see if there is any equity. then work out a split of it.

ticktack_2

carohf wrote: »

I'm starting to think negotiating a pay back agreement might be the way forward - £100 pm for 22 years. Something like that?

I think you need to consult a solicitor before making any further agreements with your brother.

00ec25

BitterAndTwisted wrote: »

That is not correct: please do not forget that the brother continues to live in the property, so anyone who moves in with him will be a lodger whether the OP lives there full-time or not. Drawing up a tenancy agreement for a lodger would be completely pointless and a huge red-herring.

But that won't be an issue, the brother can afford all of the mortgage-payments alone and does not want to share his home with anyone. I don't blame him. I can see a family feud on the horizon and that is most definitely not an attractive prospect.

OK - the new occupant is a lodger of the brother, with carohf being an absentee co-owner

nonethelesss my original point remains - the occupant is not a lodger of carohf and so a portion (as i read it the 50/50 ownership is unaltered) of any rent the occupant pays will be taxable against Carohf outside the lodger rent a room scheme