A fair solution when selling the house

Donna_Tello

What would people suggest would be a fair way to handle the following situation, being as fair as possible to both parties.

A un married couple with no kids buy a house together and go down as 50/50 partners on the mortgage. One partner puts in the deposit but contributes nothing more and the other pays no deposit but pays the mortgage and maintenance. The partner who put down the deposit works away and has rent free accommodation else where whilst the partner who pays the mortgage lives in the property full time.

Assuming the house hasn't increased in value, how would you divide it?

ViolaLass

Would depend on a lot of factors - how much the deposit had been and how long they had held the property for, for a start.

Donna_Tello

Ok so assuming they owned it 5 years and the purchase price was £150k deposit £45k

[Deleted User]

Personally I'd work out the percentage of the house price the deposit was. The person who paid the deposit would get/pay that percentage of the profit/loss when the house sells.

Or Get the house valued, person living in the house gets a new mortgage for the new value, less costs and pays the person who provided the deposit the same value as above.

But if the person who paid the deposit really wanted out of the deal, and wanted their money back, perhaps they'd be prepared to negotiate for the benefit of getting out of the deal.

stator

Add up all the mortgage payments, say it's £20,000. Compare it to the deposit, say £10,000. Person who made the mortgage payments should get 2/3 of the value of the equity in the house house. Person who paid the deposit should get 1/3 of the value of the equity.

freezspirit

Would you also need to factor in the current value of the property when working out who get what?


Are you buying the other persons share or selling the property? If you were buying out the other persons share then I would see the deposit as a loan, 45k plus 5yrs interest plus £5-£10k to keep them happy and to get their name off the mortgage etc


If its to completely sell, do you have records of how much of the mortgage was paid off plus records of how much was spent on maintenance etc If the total is the same as the deposit then it will be 50/50 on the same.


I've noticed this happening a lot lately so a lot of solicitors will write up a contract between the couple to say what percentage of the deposit was put down by which person or persons parent and on the sale of the property the deposit will be returned to that person before any profits from the sale of the property are divided if they split.