Forcing my ex to sell the house

mrjack

Hi all,

I have a situation... Back in 2010 me and my then partner bought a house and a 70/30 split in equity should we split up. The equity figure was based on the fact that her father put up with a deposit, however, all costs beyond that were split on a 50/50 basis.

A year later, we split up, and, as we couldn't sell the house due to being tied to a minimum mortgage contract period, we obtained consent to let from Northern Rock (now Virgin Money) and rented the house out.

As we are now going into 2015 and way past out minimum contract period, I want to sell the house. I am getting married next year and want to buy another house without having this one on my credit file and to sever the last remaining tie with the ex. However, she's very reluctant to sell it as she's afraid that she will lose her dad's deposit money. The house is worth around £180k with £60k equity in it. The deposit paid was £35k so we will both gain...

I can see it from her point of view but there's very little compromise on her part. I have suggested various options over the years, such as buying me out and get a BTL mortgage in her name or selling it "next year" (every year is "next year"). And with the house market stronger than it has been in years, I simply do not see any reason for keeping it.

Our current tenants have shown an interest in buying the house from us but it might not happen for a few years - I simply do not want to wait that long. They are also very high maintenance (and, frankly, idiots).

So my question is: do I have any legal grounds to force her to sell the house? I will seek legal advice but wanted to get other people's opinions. Maybe someone has been in the same situation?

Thanks

bris

Yes you do, with no ties and no dependants to worry about it should be a straight forward case of tying up the lose ends.


A court should have no problem granting the request to sell if the other party can't buy you out.


Word of warning though, you should threaten legal action, however if you can't get her to agree then legal costs on both sides can get very high, solicitors make a very good living over this kind of dispute.

mrjack

Thanks - good to know. Hopefully, simply a threat of legal action will get her moving...

Another question, if I wanted to sign over the house to her, is it simply a matter of her getting her own mortgage and changing the name on the deeds? Or would this incur the same costs as selling the house (conveyancing etc.)?

TBagpuss

If you simply sign the house over to her then yes, there will be conveyuancing costs (effectively you and she would be 'selling' to her, albeit at an undervalue)

If she doesn't want to sell, but can can a mortgage in sole name another option would be for the house to be transferred to her with a charge (private mortgage) in your favour, providing for her to pay you a lump sum (based on a fixed % of the house value at the time it is paid) at a set date in the future.

If you want to sell the house then you will, in the absence of any agreement, need to apply for an Order for Sale under ToLaTA (trust of Land and Appointment of Trustees Act) Provided that you do it correctly, then you would probaly be entitled to a costs order as well, if the case goes to a final hearing, but it is very important to tick all the right boxes on the way, so get proper legal advice.

I'd suggest you see a solicitor and get them to do a formal offer, perhaps offering her the option to buy you out and giving her a deadline.

Obviously if you decide to sell then you may need to end the tenancy first, as it will be much more dificult to sell a property with sitting tenants. Do you know when the tenancy is due to end and when you would have to serve notice by?

mrjack

Thank you very much - very useful advice here!

The new tenants have just moved in, so are bound to a 6 month contract, ending on 1st April. So we could serve section 21 notice 2 months beforehand for them to be out.

booksurr

mrjack wrote: »

Another question, if I wanted to sign over the house to her, is it simply a matter of her getting her own mortgage and changing the name on the deeds? Or would this incur the same costs as selling the house (conveyancing etc.)?

have you factored in Capital Gains tax to your calculations???

as it was once the main residence of both of you this will probably be very low or zero but simply signing it over to her counts as a disposal and would trigger a CGT calculation. Given she is now your ex there is no exemption available on that transfer so your exposure to CGT depends on the numbers - you need to work them out!

mrjack

booksurr wrote: »

have you factored in Capital Gains tax to your calculations???

I have already sought advice on this and it doesn't look like I'll be liable for CGT due to quite a low equity.

TrickyDicky101

mrjack wrote: »

I have already sought advice on this and it doesn't look like I'll be liable for CGT due to quite a low equity.

The only thing that matters is if the house has increased in value since the time you bought it.

'Equity' refers to the residual value of the house once any mortgage secured on it has been repaid. It has no impact on CGT.

booksurr

mrjack wrote: »

I have already sought advice on this and it doesn't look like I'll be liable for CGT due to quite a low equity.

that does not answer my question - equity has nothing to do with the capital gain
how much did you pay to buy it ?

mrjack

Surely CGT is governed by how much profit I would make on the house - hence equity matters.

Anyway, that's a separate matter - I have my answer for what I wanted to know Thanks all!

Edit: actually - you're right. Equity has no bearing on CGT. Only profit.

booksurr

mrjack wrote: »

Surely CGT is governed by how much profit I would make on the house - hence equity matters.

Anyway, that's a separate matter - I have my answer for what I wanted to know Thanks all!

Edit: actually - you're right. Equity has no bearing on CGT. Only profit.

let us hope your CGT advisor understood the difference as i know I'm right !

For the record you have owned the property for approx 60 months (5 years) of which only 30 months is exempt. Half your gain is therefore liable to CGT and unless covered by your letting relief claim and personal allowance may or may not net off to zero liability depending on the numbers.

If you have done that calculation and arrived at zero liability then fair enough