Fair way to calculate share of flat

seriousDFW

So assuming a £150,000 sale price;
Original price £ 140,000.00 Sale price £ 150,000.00 Deposit to OP £ 21,428.57 Remainder £ 128,571.43 OP £ 66,502.46 Flatmate £ 62,068.97

Total for OP £ 87,931.03 Total for Flatmate £ 62,068.97
£ 150,000.00

pinkshoes

What did you pay for it?
What is it worth now?
How much is the remaining mortgage?

Can your flatmate AFFORD to take it on his own i.e. is the remaining mortgage plus the extension to buy you out less than 4.5x his salary?

JamesCurt

pinkshoes wrote: »

What did you pay for it?
What is it worth now?
How much is the remaining mortgage?

Can your flatmate AFFORD to take it on his own i.e. is the remaining mortgage plus the extension to buy you out less than 4.5x his salary?

We paid 140,000, now worth 150,000. If he cant afford to take on the mortgage himself, we will have to sell that flat and he will have to find a smaller place or rent a property.

JamesCurt

Just an update. As I thought, flatmate cant afford to buy my share so the next option is to put the flat up for sale. However he will only agree to sell if he gets back the £28,000 he has paid towards the mortgage. Do you think this is reasonable?

I can sort of understand his point as it is me who is leaving, he doesnt want to leave and if he has to sell he doesnt want to make a loss.

beecher2

JamesCurt wrote: »

Just an update. As I thought, flatmate cant afford to buy my share so the next option is to put the flat up for sale. However he will only agree to sell if he gets back the £28,000 he has paid towards the mortgage. Do you think this is reasonable?

I can sort of understand his point as it is me who is leaving, he doesnt want to leave and if he has to sell he doesnt want to make a loss.

Why should he get back all of his mortgage payments - that would mean he'd lived rent free for the last 7 years!

Explain to him that there isn't enough equity to pay back both sets of mortgage payments plus the deposit - hopefully someone neutral can explain to him that this isn't the way it works. Explain how much money will be left, that you're taking your original £20k and that you'll split the rest 52% 48%./

nobblyned

JamesCurt wrote: »

Just an update. As I thought, flatmate cant afford to buy my share so the next option is to put the flat up for sale. However he will only agree to sell if he gets back the £28,000 he has paid towards the mortgage. Do you think this is reasonable?

I can sort of understand his point as it is me who is leaving, he doesnt want to leave and if he has to sell he doesnt want to make a loss.

No, nowhere near fair. The splits previously outlined are fair, however as you are the one wanting to leave it may be the magnanimous thing to pay all sol and ea costs for the sale, and maybe offering him something in lieu of his cost for his next purchase/rental. His request for £28k shows a serious lack of understanding of the way the world works.

Annisele

The problem you have is that if you can't agree between yourselves, you'll have to get lawyers involved. That will not be cheap. Paying your flatmate a few thousand more than you think he's due might end up leaving you better off than litigating this.

Without a declaration of trust, the starting position will be that you're each entitled to half the equity. A judge can move a long way from that starting position in some circumstances - but since you're the one who wants to move, your friend might well hold out for that half.

fart

You don't take back what you've already paid on it in terms of actual monetary value, you take back the percentage. In a world where he's paid £28k towards a house which is only now worth £40k, does he think he gets all his original £28k back too in that (made up) scenario??!

Take your £20k, split the rest based on what percentage you've both put towards it so far.

As you're the one 'forcing' the sell, it's up to you to pay costs pertaining to the sale, and also would be nice to offer him costs associated with his search for a new place - it might be easier therefore to simply give up the extra 2% of your equity and split it right down the middle after the deposit is taken.