Relationship breakdown

Groundhog22

Hi all
My daughters relationship with her long term partner has ended. No children. They bought a house together 7 years ago which has been bit of a money pit. She paid the deposit out of her savings, we paid for kitchen carpets new windows etc. He has left the property by choice but now wants to buy his own property. There is about £20k equity in house based on estate agent valuation less mortgage which is simplistic terms she should pay him £10k. It is all amicable ATM but I suspect his family are now pushing for everything despite the fact they did not help them at all. In working out a settlement figure can she factor in the fact she paid the deposit. She could not afford to pay him£10k - we will help her obviously but are hoping we can reduce this amount a bit to reflect the fact we have contributed several thousand to the house plus of course as I said she paid the deposit.
Anyone been here please?

Funky_Bold_Ribena

Groundhog22 wrote: »

Hi all
My daughters relationship with her long term partner has ended. No children. They bought a house together 7 years ago which has been bit of a money pit. She paid the deposit out of her savings, we paid for kitchen carpets new windows etc. He has left the property by choice but now wants to buy his own property. There is about £20k equity in house based on estate agent valuation less mortgage which is simplistic terms she should pay him £10k. It is all amicable ATM but I suspect his family are now pushing for everything despite the fact they did not help them at all. In working out a settlement figure can she factor in the fact she paid the deposit. She could not afford to pay him£10k - we will help her obviously but are hoping we can reduce this amount a bit to reflect the fact we have contributed several thousand to the house plus of course as I said she paid the deposit.
Anyone been here please?

Hmm....
What was the deposit; what is the house worth, how much have you spent on it?

Gigglepig

I would suggest

Current value

Minus any deposit paid

Minus what you paid to improve it [and if he paid for improvements, he should get the money back as well]

= figure to be divided in two

Groundhog22

Funky bold Ribera - deposit was £6k - she paid £4500 he paid £1500.
Over £15k has been spent on it - as stated my husband and I have spent at least £10k but her partner also did a lot of the renovation with the help of his brother but they did pay him for the work. It would probably be difficult to quantify exact figures - if she could take the deposit off I think we would be happy. The property has been valued at £125k by estate agent.
Thanks

Gigglepig

So as long as e house has gained enough value since they bout it, you could suggest for example

current value
Minus any transaction costs (solicitor, for getting his name off the property?)
Minus 4500 to her and 1500 to him for deposit
Minus 10k to you and 5k to him for paying for and carrying out renovations
= sum to be split in half


Eta - don't forget you will need to also take into account the cost of transferrring anypaperwork into your daughter's name only, if he was on the deeds/mortgage.

Funky_Bold_Ribena

What I would do is to add up all the moneies paid in by her, him and you and work out the percentages 'invested' into the property. Plus don't forget to include his hours spent on the work he has done.

Then divide the 'profit' by this; so the 20K becomes like shares in the property. She can offer that to him along with the calcs and see if that will suffice.

Dunroamin

I don't think you should try to split the renovation costs at all, partly because they don't necessarily increase a property's value and also because your contribution was, presumably, a gift to both of them.

If there's £20k equity in the property then I think that she should buy him out for atound £8,500 (taking her greater deposit into account), depending also on who paid the initial purchase costs and who will pay for the current changes.

Funky_Bold_Ribena

Dunroamin wrote: »

I don't think you should try to split the renovation costs at all, partly because they don't necessarily increase a property's value and also because your contribution was, presumably, a gift to both of them.

If there's £20k equity in the property then I think that she should buy him out for atound £8,500 (taking her greater deposit into account), depending also on who paid the initial purchase costs and who will pay for the current changes.

If you are doing it that way and she paid 3 times the deposit than him, I'd suggest 7k to him.

pmlindyloo

Good suggestions above but your daughter may be on a sticky wicket if none of this was written down and her ex wants to play funny bu**ers.

He could say that you gave them the money (as a gift) and therefore he is entitled to 50% of the increase in value of the property.

Your daughter may be luckier with the deposit as presumably she can prove what she paid by a bank statement.

If he is a decent human being he will accept your suggestions but I suspect it will not be easy as all that. Relationship breakdowns are like that and when his family get involved then.................!

To be honest, unless your daughter wants to get solicitors involved then it may be easier to reach some sort of compromise. Annoying but less stressful in the long run. Move on and (dare I say it) never lend money without making sure that it is all tied up legally. I'm sure you know that now.

Funky_Bold_Ribena

If it goes to legal arguments, then most of the profits will end up in the solicitor's bank accounts. Much better to offer a fair settlement as quickly as possible and waft a cheque in front of their eyes in exchange for getting names taken off the mortgage etc...OP make sure before you do anything that this involves a settlement after his name has been taken off any mortgage documentation. Obviously!

Dunroamin

Funky_Bold_Ribena wrote: »

If you are doing it that way and she paid 3 times the deposit than him, I'd suggest 7k to him.

I knocked £3k off the equity and split the rest, which seems fairer.