quck question about buying someone out - order of events

earlycomputers

My ex partner is buying me out of our house which we own as tenants in common 50-50. My ex spent a chunk of his own money on house renovations for which I agreed he could have back from the profits of the house before we split the remainder half and half.
Should the maths of this work thus: From the profit of the house > split in two so we get half each > then I give my ex the chunk of money (he has spent on renovations) from my half straight to him? Or should it work this way: From the profit of the house > my ex takes from this profit what he is owed from his renovation costs > then we split the remainder 50-50 each?
The second method means I get more money but I am confused as to how this is! We are arguing on which of these methods we should choose - does anyone know what the correct order of events should be? (house profit in the above sense, means the difference between the mortgage value and the current house price which has increased since we bought it). Many thanks

G_M

You can do it either way as long as you agree!

But I would take the renovation costs as a loan and remove them from the property cost. So split the property equity 50/50 and then repay the loan amount seperately.

It's a matter of opinion though.

silvercar

If you do the first method, you are paying all the renovation costs out of your share and he is paying none. He then gets in his share all the uplift value that the renovations have made to the value of the property.

Consider in extreme, if renovations had cost £10k and the 'profit' was £20k. Method 1 you split the 20k as 10k-10k, you then pay him the renovation costs of 10k out of your share, leaving you with zero and him with 20k. Method 2 you take the renovations off the profit and then split the 10k left, so he gets 15k and you 5k.