Arguments caused by Declaration of Trust when buying a house

Ulfar

It all depends on how everything is being split, after a bit of thought.

If one party puts up the deposit which is 30% of the property cost and they split the mortgage 50/50. The deposit giver should own 65% and the other party 35%. Any purchase costs should be split 65/30.

The 50/50 mortgage costs buys each party 1/2 of the 70% of the property not being paid for by deposit.

When they come to sell the equity should only be split 65/30, after all costs have been settled.

This however relies on costs being split 50/50, if it is a different apportionment I would split the 70% relative to the cost split.

There are other ways to work it out but this seems the simplest to me. This accounts for any increase and decrease in the property value fairly.

RubyHammer

I was in a similar position 8 years ago and I agree with the OP, the proposition put forward is fair. It effectively returns both parties to the position they were in prior to purchasing the property (exc. the purchase fees). She also benefits from cheaper mortgage payments because of the large deposit you are putting down.


As for the purchase expenses, sols fees, removal expenses etc. she should pay 50%, its an expense neither of you can get returned and it is a joint purchase after all.


It sounds to me as if someone elsewhere is yanking her chain without understanding the full situation - including the benefits of the lower overall mortgage payments she would enjoy because of your choice to put in so much deposit.


I think if it were me and she wouldn't sign the deed of trust I'd be selling the property as soon as possible, before she could try and successfully argue she should be entitled to half of the full equity amount.


In addition, should house prices drop presumably he then loses out? Is that possibility covered in the Deed of Trust? Should she also be responsible for 50% of the negative equity too?

System

I do understand where your other half is coming from.

If you turned around the day after completion and said 'OK this is no longer a viable relationahip' then she is significantly out of pocket. If she thinks the same then she must consider whether she tells you that as she will have significany financial consequences to deal with.

This only works in the long term. You must consider why she has doubts.

mrginge

I'm not getting involved in the 'whats fair or isn't fair' debate.

All you need to know is that anyone who gets you this far down the road only to start kicking off three days before completion is either mugging you or is a total loon.
Start planning your tactical withdrawal from this personal & business relationship ASAP.

Pixie5740

Walcott wrote: »

I do understand where your other half is coming from.

If you turned around the day after completion and said 'OK this is no longer a viable relationahip' then she is significantly out of pocket. If she thinks the same then she must consider whether she tells you that as she will have significany financial consequences to deal with.

This only works in the long term. You must consider why she has doubts.

Not as out of pocket as the OP who is providing the deposit of £225k whilst the GF puts zero towards the deposit and he would lose the cost of fees etc just the same as she would.

Alarm bells are definitely ringing.

kidmugsy

mrginge wrote: »

I'm not getting involved in the 'whats fair or isn't fair' debate.

All you need to know is that anyone who gets you this far down the road only to start kicking off three days before completion is either mugging you or is a total loon.
Start planning your tactical withdrawal from this personal & business relationship ASAP.

Yep, it's an ambush. Run for the hills.

System

Pixie5740 wrote: »

Not as out of pocket as the OP who is providing the deposit of £225k whilst the GF puts zero towards the deposit and he would lose the cost of fees etc just the same as she would.

Alarm bells are definitely ringing.

I get that and I also get that she has left it to late to query this and that is suspicious.

However the OP isn't out of pocket for £225k. That is kind of the point. The deed would protect this and alter the % of ownership between the two. Given that, I don't see how 50/50 on the SDLT is fair. Legal fees I can see a point for splitting equally as it is a sunk cost regardless of the outcome.

Her craziness aside, I don't see the logic of a paying 50% SDLT when ownership is less than 50%.