Selling after break-up

Nemesis201077

Hi all,

Just after some advice really.

I bought my current house in September 2003 for £135,000, putting down £6000 deposit.

I then got together with my partner who lived with me, along with 3 tenants as I was a live-in landlord. We never married, although that was looking on the cards in the future.
We reduced to two tenants in around 2007 so we had a spare room and a bit more personal space.

In April 2008 we took a new mortgage offer. I didn't even think about it at the time, but she was then added to the land register. It doesn't say anything on there about tenants in common etc and we didn't have any agreement in writing between ourselves.

All payments for the mortgage, bills etc went out from my account and, prior to 2009, her contributions to the running costs were minimal.
In 2009 she started to pay half the difference between what the tenants paid and the total cost of running the house. So the house costs £1400 a month including mortgage and bills, the tenants were paying £675 and between the two of us we covered the rest.

In June 2012 she up and left as the grass was greener elsewhere. She then made no contributions at all.

I've been covering the mortgage myself since then and currently owe £128000. I believe I could sell the house now for £180000-185000.

Legally, as we never married what's she entitled to?

A brief conversation with my solicitor seemed to indicate that she would only be entitled to the increase in value since she went on the mortgage. Now, in 2008 the mortgage valuation was £186500. So if I sell for £185000 is she entitled to nothing legally?

My ex had said she wanted 50% of the capital in the house at the time we parted. At the time I owed £137000 on the mortgage and the average valuation was £162500, so less fees etc she could be looking at £10k

I will be seeing my solicitor soon to go through it, but it's £150 an hour and I only earn £500 a month right now, so am struggling. Any advice gratefully received.

I did also run a business with her dad who's been quite keen to shaft me on buying my half of the business for peanuts (oh and to pay by installments? even though he has the funds to pay right out) so I'm now not feeling as charitable as I once was and would be happy to not give the ex a penny.

xylophone

I'm not sure that the fact you never married cuts much ice in this situation - the important fact appears to be that you and your ex partner took out a joint mortgage, own the property as joint tenants and are jointly and severally liable for the mortgage repayments ( although you alone have been paying them for the past couple of years)?

You might ask your solicitor to write her a letter setting out an offer taking account of contributions made etc?

F_Bear

In April 2008 we took a new mortgage offer. I didn't even think about it at the time, but she was then added to the land register.

i bet she thought about it...........hope u get sorted and dont give her a penny

dimbo61

You bought a house for £135,000 in 2003 and put down £6,000 so £129,000 mortgage and NOW you owe £128,000 ?
Paid off £1,000 in 11 years !!!!!!
Mortgage £128,000 and income of £500 a month !
Even at 2.5% over 25 years that works out at £574 a month

TBagpuss

if you are joint tenants then the starting point is that you are each entitled to 50% of the equity.

If you can't agree, then either one of you could apply to the court for a declaration of trust - i.e. for the court to determine what share of the property you should each have.

They could look a the whole of the relationship but it's likely that while you consider her contributions were 'minimal' before 2009, she may not agree.

In the first instance,consider making an offer to her which gives her something, even if it is less than the £10,000 of her initial proposal. If it goes to court and you are successful you might be entitled to recover your costs from her, but that is only any good if she has the money to pay them. It may be worth your while to make a 'nuisance offer' - get your solicitor to set out why they think she has no claim, offer her a small sum - maybe £2,000 or so but make clear it that it is offered on a good will basis, no because you consider she has a valid claim.

Building_Surveyor

Is this an interest only mortgage? As someone else has pointed out the figures show you have only cleared 1k in 11 years... Also, has the house been valued?

Flugelhorn

I wonder if the OP borrowed more money when the mortgage was renewed as they owed 137k when they parted

StuC75

50% of the equity sounds the starting point, past & present valuations count for very little (especially mortgage valuations)..

Lodgers \ tenants count for little either.. Were you declaring this income for tax purposes?

Did the solicitor not advised you of this when you re-mortgaged and added the ex to the mortgage.. as really the ownership and equity provisions could have been stated there.. although that only depends on how much legal work you are willing to fight that out and incur..

A Solicitor may tell you what they think they could fight for, but will be on a 'earner' no matter how its decided should you chose to fight this through the courts..

Nemesis201077

Thanks for the replies.
Yes, we did take some extra borrowing, about £12k IIRC, to clear some debt on both sides. That was prior to 2008 though, as I think this was Northern Rock.
My salary is currently £500 a month, but that's only since last July. I was employed full time and on a reasonable salary prior to setting up the business in 2009, so was able to cover the mortgage on my own, hence her small input.
I currently take £925 a month in rent so with than and my small salary I can just about cover the costs of the house, but need to sell it soon as I can't continue like that forever (plus I don't want to live with tenants anymore).
The mortgage is £800 a month, it could be cheaper if I changed, but what do I tell the mortgage company? I have a small salary, am single and can barely afford it, I don't really want to rock the boat an think it's easiest just to sell the house. The mortgage and bills add up to £1400 a month here, so it's only with tenants that I can afford to remain ( can't buy and food though unless I get extra money form working overtime )

I was considering going to the solicitor with 2 suggestions.
1) If they feel I don't need to give her anything and are very sure she'd fail if it went to court I would get a small offer made, as a gesture of good will.
2) Go through the maths and offer her similar to what she was expecting, breaking down the figures.
Mortgage owed at time we split £137000
Average anticipated sale price at that time £162500
£162500 - £137000 = £25500
Less estate agent commission 2% £3250 Solicitors fees £1000, cost to move £1000, Cost to prepare for sale £1000. Total £6250

£25500 - 6250 = £19250

£19250 / 2 = £9625

So I could offer her £9625, unless there's anything I've forgotten cost wise.

I obviously paid the £6000 myself and she made no investment, so if I also took this out of the capital that would leave her with £6625 and I get my investment back. That sounds fair to me, but I'm sure she'd disagree. Might be a good one to try as the initial offer, or if I went with Option 1).

I believe I could achieve a sale price now of £185000, so less £144325 (including her £9625, costs and £128000 mortgage) that leave me with £40675 to invest in a new property.
I'll need to get myself a full-time role before I then buy somewhere else, but at least the part-time one is allowing me time to prepare the house for sale.

da_rule

Don't forget that she'll have legal costs as well, which she will probably want some contribution towards.

All I can say is that you'll be lucky if she agrees to that offer.

Nemesis201077

Thanks da_rule.
What legal costs would she incur if I'm paying the solicitiors for the conveyancing etc out of that £1000?

Those figures are based on what she'd discussed with me before we parted and she felt that would be fair. I didn't ever agree to anything with her as I wanted to check the legal position first. The only change now is that the house has increased in value over the couple of years I've been paying it all on my tod and the mortgage has reduced. I don't feel she should be entitled to any such increase, but then a solicitor may have a different opinion.