Splitting from partner: joint deeds - no mortgage (freehold)

Billy056

Hi guys,

My wife and I have recently split and although we havnt gone through the divorce proceedings yet I need advice re property.

The house is a free hold and was bought cash by my father for us. The deeds are in both wife and my name. She understands that no money for the property was passd between either of us and that funds was direct from father to solicitor for the purchase. The money is in fact a LOAN from my father and both have signed an agreement to pay back.

She thinks she shoud be entitled to somthing as the property is valued more than when first bought.

Is this just pure cheek??

Is she really entitled to something?

Opinions please.


cheers.

DS4215

Do you have any children together?

How long were you married?

Assuming that it is not a short marriage (2 years), then she would normally be able to claim 50% (as a starter) of the equity on the property. So if the purchase price was £100k, you have paid back £5k of the loan and the property is now worth £110k (for example). In this example, the equity is £15k, but you would have to pay fees out of that (to take her off the deeds), giving ~£7.5k each.

Billy056

DS4215 wrote: »

Do you have any children together?

How long were you married?

Assuming that it is not a short marriage (2 years), then she would normally be able to claim 50% (as a starter) of the equity on the property. So if the purchase price was £100k, you have paid back £5k of the loan and the property is now worth £110k (for example). In this example, the equity is £15k, but you would have to pay fees out of that (to take her off the deeds), giving ~£7.5k each.

Thanks for the reply DS,

We have been married since Sept 2011 and we have no dependants.

Mojisola

Billy056 wrote: »

The house is a free hold and was bought cash by my father for us. The deeds are in both wife and my name. She understands that no money for the property was passd between either of us and that funds was direct from father to solicitor for the purchase. The money is in fact a LOAN from my father and both have signed an agreement to pay back.

She thinks she shoud be entitled to somthing as the property is valued more than when first bought.

So your father has loaned both of you enough money to buy a house outright and both of your names are on the deeds and the loan agreement?

In that case, once the house has been sold and the associated bills have been paid, I would expect anything left over to be split 50/50 between you.

Billy056

Yes, yes and yes.

however the house isn't going to be sold and she know this.

HappyMJ

Billy056 wrote: »

Yes, yes and yes.

however the house isn't going to be sold and she know this.

Then you are going to have to buy her share out. She could stay on the deeds and when it is eventually sold she will be entitled to half the equity at that point. You won't be able to raise finance against it whilst it's in joint names as I imagine she will not approve the loan against her equity.

Mojisola

Billy056 wrote: »

Yes, yes and yes.

however the house isn't going to be sold and she know this.

How will that work? She will still be an owner and still owe your Dad money.

If you aren't able to come to an agreement whereby you pay her what she would have got if the house was sold and agree that she comes off the deeds and the loan agreement, she could go to court to force a sale.

WillowCat

Have you both been making regular repayments of the loan?

If not, you will have to hope that the court do accept that it is a formal loan - despite a loan agreement being signed loans from family are often seen as 'soft' and not repayable, meaning the equity is the full value of the house.

I've been caught because my family lent me money for renovations and I agreed to only pay back once I'd got my degree and a job. In the meantime divorce has happened and the loan is being disregarded (along with my inheritance but that's another story).

Your best hope is perhaps to rely on this being a 'short' marriage, and each party takes out what they came with? I assume there are no children involved.

silvercar

If you didn't have a generous father able and willing to help you out, chances are that you would have taken a joint mortgage and bought a property. In that circumstance, you both would now be entitled to half the equity. So no different now.

Generali

Billy056 wrote: »

Hi guys,

My wife and I have recently split and although we havnt gone through the divorce proceedings yet I need advice re property.

The house is a free hold and was bought cash by my father for us. The deeds are in both wife and my name. She understands that no money for the property was passd between either of us and that funds was direct from father to solicitor for the purchase. The money is in fact a LOAN from my father and both have signed an agreement to pay back.

She thinks she shoud be entitled to somthing as the property is valued more than when first bought.

Is this just pure cheek??

Is she really entitled to something?

Opinions please.


cheers.

Urgently take proper legal advice. Do not delay. Take advice from a good divorce lawyer today. It will save you a very large amount of money in the end.

Caz3121

the loan would have been for a financial value not a "thing", surely it has not been worded that you have borrowed "the house" and will pay back "the house"

So for example if the house was bought for £200k, you have entered into a loan that says that you owe your father £200k. If the bottom dropped out the market and the house fell to £180k then you would still owe your father £200k, likewise if property increased in value to £230k, you would be paying your father back £200k and would have £30k left between you.
I cannot quite understand why you think it would be a cheek to expect her share of the equity on divorce. If the example given were the correct numbers would you expect her to walk away with nothing and you to keep the full £30k equity?