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Occupation Rent

Can anyone help with this?

I'm living in the matrimonial home after my partner left (we are now divorced). I've been paying the mortgage (interest only) for the past 3 years. He declared himself bankrupt so the trustees now want 50% of the equity.

They say that I am not able to claim any of the mortgage payments I have made against their share of the equity because the payments were interest only. However I have come across 'Occupation Rent' and see that mortgage interest payments can sometimes be offset as Occupation Rent against the other parties equity share.

Can anybody advise if this is likely to apply in my case? The trustees haven't made any mention of this, but I am assuming they wouldn't because it wouldn't be in their best interests.

Thanks in advance!

Comments

  • HappyMJ
    HappyMJ Posts: 21,115 Forumite
    10,000 Posts Combo Breaker
    Wow it's been a long time since you first posted way back in 2007. Welcome back and hope to see a reply from you this time.

    To buy your ex partner equity won't cost you 50% of the equity it will be much less.

    Very basically it's Valuation minus 10% (to account for selling costs) less any outstanding secured debts, the unsecured ones don't count then the equity you are purchasing is valued at a figure which is usually a lot less than 50%. You'll need to find that money but you don't have to find it particularly quickly. The trustees will wait quite a while for you to make a choice as to what to do next.
    :footie:
    :p Regular savers earn 6% interest (HSBC, First Direct, M&S) :p Loans cost 2.9% per year (Nationwide) = FREE money. :p
  • Thanks, appreciate the response but it doesn't refer to occupation rent. I have been arguing with the trustees for 6 months, I know they won't have 50% but they sure as heck want more than they are entitled to based on what I've been paying as a sole contributor to the house. It is specifically the issue of occupation rent I need to find an answer to now.

    Thanks anyway :)
  • antrobus
    antrobus Posts: 17,386 Forumite
    ...They say that I am not able to claim any of the mortgage payments I have made against their share of the equity because the payments were interest only. However I have come across 'Occupation Rent' and see that mortgage interest payments can sometimes be offset as Occupation Rent against the other parties equity share....

    Occupation Rent is from TOLATA. It is a notional rent payable by the occupying party to the non-occupying party. It's true that case law appears to show that you can indeed only offset mortgage interest payments against this occupation rent, but that's only going to help you if the interest paid is greater than the rent. Otherwise you might end up owing more money.

    http://www.newlawjournal.co.uk/nlj/content/cost-occupation
  • Thanks for the reply. The interest payment is over £600 per month. I will have to look into this further.
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