Equity entitlement query

stevenbmkiv

The property was bought through the "Right to Buy" scheme. We were both tenants at the property and I needed my Dad to be on the mortgage application to be able to get the ball rolling and buy the property with him. Likewise he agreed to buy the mortgage with me.
All our family have said we did the right thing in buying it together and that my Dad can walk away with a nice sum of money.
I've asked to meet him tomorrow or Friday for a chat in person. I feel this is a much better approach and I want to get my point across better. I won't see my Dad short of money and I am sure he will come to some agreement.

getmore4less

what are the numbers.

Total buying cost, including all fees

how much cash did each of you put up front.
you say you paid all the mortgage how big was that at the start how much is left.

What is the estimated selling value after costs(don't include the mortgage)

The harder bit will be estimating the "improvements"
How much did you spend?

From those numbers can do an equitable calculations.

stevenbmkiv

I'm not really comfy posting actual figures on a public forum.
However I can say that as we bought the property through the scheme and the percentage discount we both benefited from acted as our deposit. Neither of us had to put in any further money up front.

Jenniefour

So when you say he hasn't funded a single penny what you mean is he didn't put any cash into it. The RTB discount was used for the deposit. So half this amount may be a useful and fair starting point for negotiations since, effectively, half of RTB discount was his from the joint tenancy.

getmore4less

If you don't put something up then it is hard for people to help.

If the only equity element is the discount then 1/2 of that may be a starting point but was there any rent on that?

How does that get paid back?

Lack of agreement up front could make negotiations fraught.

Jhoney_2

He invested his 50% discount, you have the property. Why shouldn't he get 50% equity? He was still personally liable for your mortgage and thus undertook a lot of risk on your behalf.

He could also force you to sell and he would get half whether you like it or not, so treat him with the respect and thanks he deserves.

If it's a large enough sum, perhaps deduct half of the true renovation costs. That's fair to all.

Mojisola

Jhoney wrote: »

He invested his 50% discount, you have the property. Why shouldn't he get 50% equity? He was still personally liable for your mortgage and thus undertook a lot of risk on your behalf.

He could also force you to sell and he would get half whether you like it or not, so treat him with the respect and thanks he deserves.

stevenbmkiv wrote: »

My father and I jointly applied to purchase the maisonette that my wife and I live in.

It was bought jointly and the mortgage application was created in mine and my fathers name. However, my wife and I have paid for everything right from the start including all the solicitors fees, valuations fees and all 5 years worth of mortgage payments. We have also funded the home improvements which have helped to obtain the market value that it now is.

As Jhoney says, your father is legally entitled to half the value of the house.

You have paid the mortgage but, if he hadn't helped you buy the property you would have been paying rent somewhere.

He had a secured tenancy home before you bought it so he is in a much worse position now regarding housing.

getmore4less

You could go down the full calculation route.

You both bought the place but only you lived in it.

You pay 1/2 the market rent which paid(all/part) of dads 1/2 of the mortgage.

Split the proceed adjust for the "improvements" every one happy(or not).