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Marital separation - How to deal with jointly owned property in negative equity?

jools002
jools002 Posts: 54 Forumite
edited 17 December 2014 at 12:12PM in House buying, renting & selling
Hi, just after some advice please. My husband and I have separated and jointly own a property. Due to my husband being in the Armed Forces, we have been living in MoD accommodation so the property is on a Buy to Let mortgage with a tenant in-situ. I am not able to go and live there as it is too far away from my family and is in an area where I have no desire to bring up my children. I have no income of my own and my husband and I had previously discussed that the best option was for him to take it all on in his sole name, a move which the mortgage company have said is just a case of a bit of paperwork - easy peasy. However, the house is around £12k in negative equity. My husband has now changed his mind and has decided that he doesn't want to take on a property in negative equity by himself (which to be honest he is already doing as I have no income anyway) but he doesn't want to sell it either because we would have to pay back the £12k shortfall on the mortgage. I just want out of the property but I feel trapped. Do I have a right to sell just my share somehow? Can I market the property without his consent? Also, if it sold and we had to owe the mortgage company the £12k, would they demand this back immediately or could they put a payment plan in place because of my circumstances (single mother, low income etc)? I'm really don't know what to do.

Comments

  • kingstreet
    kingstreet Posts: 39,107 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    No. You can't.

    You would need an order of sale from court and a means of satisfying the lender the shortfall would be repaid, on or before completion of the sale.

    Otherwise, the lender can refuse to remove the charge, preventing completion.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • bris
    bris Posts: 10,548 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    As above, the lender will not give permission with the shortfall a risk to them, this would need to be arranged first.


    Your best option keeping it rented out and paying for itself until the market in your area picks up, 12k isn't a huge shortfall so maybe next year.
  • TBagpuss
    TBagpuss Posts: 11,236 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    No you can't sell your share (and even if you could, why would anyone 'buy' £K of debt?)
    To sell the property would need the agreement of your husband and of the lender.
    As the property is let, presumably payments are being made on the mortgage, so the lender is unlikely to look to repossess.

    You can have an order as part of your divorce which sets out what your respective entitlements / liabilities will be *as between yourself and your husband* - that would not change the liabilities you have jointly to the bank, but would mean that you and he could have an arrangments that (for instance) he would be responsible for paying any shortfall on the monthly payments and that you would agree to transfer the house into his sole name once it is out of negative equity.
    All posts are my personal opinion, not formal advice Always get proper, professional advice (particularly about anything legal!)
  • silvercar
    silvercar Posts: 48,626 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    edited 17 December 2014 at 1:27PM
    Does the rent cover the mortgage and costs? If so there is no disadvantage in keeping the property until its value increases.
    I'm a Forum Ambassador on the housing, mortgages, student & coronavirus Boards, money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • Yes the rent covers mortgage with a little left over which covers expenses so it is self-sufficient at the moment. This is all causing problems because I have tried to register for Local Authority housing as I can't afford a private rental at the moment but the Council have said that because I have a financial 'interest' in the property (regardless of the negative equity), I'm not eligible for a property through them.
  • silvercar
    silvercar Posts: 48,626 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    In that case you have an interest in getting off this property. Also your ex will presumable benefit by knowing that his children are housed in a secure tenancy and the rent is affordable.

    You both need to deal with the negative equity - loans from families or banks?
    I'm a Forum Ambassador on the housing, mortgages, student & coronavirus Boards, money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • PasturesNew
    PasturesNew Posts: 70,698 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Your best bet is to rent privately for now - others who also can't afford it have to do this so not being able to afford it is irrelevant to the answer.

    Then, wait 2-3 years and sell it when it's not in negative equity.

    Even if you could "sell" your half (which you can't), you'd effectively have to pay the negative equity to somebody to make the numbers balance (nobody would buy into your debt).
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