Family loan gone wrong!

gregsnears

We borrowed money from a family member to buy a house that was a cash sale.

There was a verbal agreement that the money would be repaid - partly by a cash amount and the balance by transfer of another property owned mortgaged property by ourselves to the family member.


The family member has now had a change of mind and no longer wants to take the property in part payment and wants the full cash amount. We are obviously left with the difficult prospect of being forced into selling the house now in the current difficult market and whilst also still having to raise the cash to repay the loan by obtaining a re mortgage on our new property to raise the capital.

Its all gone horribly wrong but we fear we have no idea what the family member may be capable of doing next. Would they be able to some how re claim their money owed by taking our new house from us by stating they bought it with their funds, although the house deeds are owned and in our name ? The agreed house purchase price will now be much lower because we are being forced to sell up fast, will we have to take that loss or should they or at least take part of it ? :(:(:(:(:(:(

stephane_2

In my own opinion it was a verbal agreement...there isn't much he could do. But again it does prove that no binding written agreement between family members always end up in misery....

gregsnears

The verbal agreement re the house being part of the exchange was verbal although we do have a written agreement in relation to the amount borrowed and when it would be repayed although they have changed the goal posts of this repayment time frame now for us by saying they dont want the house as part of this repayment owed anymore now just the cash, we cant raise all this money though because we havent sold the house now!

bargainbetty

If you have a written agreement, then you can stick to it. If they try anything legal, present the agreement.

Be ready to lose friendships or close relationships with family members over this, or don't be afraid to point out that it was the other person who changed the agreement, not you.

Offer them a variation on the plan, but explain that to meet the terms they are now requesting would cause you financial hardship. Ultimately, you can pay it back in accordance with your agreement, bearing in mind that they would have very little chance of taking any legal redress against you.

geoffky

I really do not blame them for taking the house as a part payment as house prices are falling month on month and how long would it take them to sell..I think they are being sensible..