Tenants in Common advice please!

goodwithsaving

Speak to a solicitor. You'll find that the advice re. TiC varies widely on this forum because people have differing views. You also need to consider what if things aren't always split down the middle etc. Some think shares is fairer as a %, some (me) think get out what you put in and then split equity 50:50. It depends on circumstances, whether she'll pay anything or you'll always pay for improvements etc.
Would it be worth buying solely in your name?

class2ldn

Thing is il be paying all the mortgage and she will be paying the bills as I earn over twice what she does but that doesn't bother me too much, without her paying the bills the mortgage would mean nothing anyway so as far as I'm concerned she contributing to vital parts of the house. My issue is that if i die and my daughter and partner fall out she won't pass the house onto her as agreed which means my daughter gets nowt. On the flip side my partner isn't sure how it works if I die and my daughter then gets half of the property.
If they agree to sell it I assume my partner just gets half instead of the full amount . I think she feels she's going to be short changed as she believes it's her house and she should own it. To me that s not right as she could give my daughter nothing.
Going to call solicitor tomorrow for advice

Danny1892

DandelionPatrol wrote: »

By going for option 1 on the basis of what happens if the value has fallen, you are transferring half of any rise in value on that £50000 to your partner.

Although it is harder to get your head around it, option 2 is definitely fairer.

It is hard to get my head around to be fair, I am not clued up as like I say it's my first house.

Say I go with option 2, percentage of ownership, what happens if the relationship breaks down early on? Say 6 months down the line, we break up, she's only put 6 months of half the mortgage repayments whereas I've put 50k + 6 months half the mortgage repayments. Does that mean she would received 31.5% any equity from the sale of the house? Let's say for aguments sake, house bought at 115k, I put 30k down mortgage is 85k, I do the 20k work on the house and then the house is valued at £135k. Would she receive 31.5% of the 50k from the sale of the house, even though she's put only 6 month of half mortgage repayments into it? Surely I've got that wrong? Or am I not understanding?

booksurr

Danny1892 wrote: »

It is hard to get my head around to be fair, I am not clued up as like I say it's my first house.

Say I go with option 2, percentage of ownership, what happens if the relationship breaks down early on? Say 6 months down the line, we break up, she's only put 6 months of half the mortgage repayments whereas I've put 50k + 6 months half the mortgage repayments. Does that mean she would received 31.5% any equity from the sale of the house? Let's say for aguments sake, house bought at 115k, I put 30k down mortgage is 85k, I do the 20k work on the house and then the house is valued at £135k. Would she receive 31.5% of the 50k from the sale of the house, even though she's put only 6 month of half mortgage repayments into it? Surely I've got that wrong? Or am I not understanding?

your understanding is correct, she would get 31.5% of whatever is left after the mortgage has been paid off

after 6 months the capital element of the mortgage would hardly have been touched as nearly all the payments you and she had made would be interest and only a few £ would be capital, so let us say the o/s mortgage after 6 months is £84,500

so your distributable equity would obviously be 50,500, you would get £34,592.50 and she would get £15,907.50. If you expect your relationship to fail then keep with a 50k declaration of trust

Suppose the relationship breaks after say 5 years when the property has risen in value to say 150k the comparisons would be:

option 1) 150k - o/s mortgage (say 70k) = 80k. You get your 50k leaving 30k to be split 50/50 so you get in total 65k and she gets 15k

option 2) you get 80 x 68.5% = 54,800 she gets 80 x 31.5% = 25,200

but the real question you should be asking is what if the value falls! Say you sell for 120 having done your 20k of work. Mortgage is 85. There is only 35K of equity! You will not get back your 50K, now what are you going to do????
option 1 you would get 35k, she would get nothing and be very unhappy having paid half the mortgage for the whole time she lived there
option 2: you would get 35 x 68.5 = £23,975, she would get 11,025. You would be unhappy because she gets some of "your" money.
That's life and money for you!

Danny1892

booksurr wrote: »

your understanding is correct, she would get 31.5% of whatever is left after the mortgage has been paid off

after 6 months the capital element of the mortgage would hardly have been touched as nearly all the payments you and she had made would be interest and only a few £ would be capital, so let us say the o/s mortgage after 6 months is £84,500

so your distributable equity would obviously be 50,500, you would get £34,592.50 and she would get £15,907.50. If you expect your relationship to fail then keep with a 50k declaration of trust

Suppose the relationship breaks after say 5 years when the property has risen in value to say 150k the comparisons would be:

option 1) 150k - o/s mortgage (say 70k) = 80k. You get your 50k leaving 30k to be split 50/50 so you get in total 65k and she gets 15k

option 2) you get 80 x 68.5% = 54,800 she gets 80 x 31.5% = 25,200

but the real question you should be asking is what if the value falls! Say you sell for 120 having done your 20k of work. Mortgage is 85. There is only 35K of equity! You will not get back your 50K, now what are you going to do????
option 1 you would get 35k, she would get nothing and be very unhappy having paid half the mortgage for the whole time she lived there
option 2: you would get 35 x 68.5 = £23,975, she would get 11,025. You would be unhappy because she gets some of "your" money.
That's life and money for you!

Cheers mate that helps a lot. :beer:

getmore4less

The get back what you put in is the same as lending the other party 1/2 the money interest free.

If not comfortable with putting all the money down and sharing the increase/decease then don't do it for part of the money.

class2ldn

How does a share of the house get passed onto a child if the other person is living there.
My understanding was the house would have to be sold but just reading that its not the case, i take it then that half the equity just gets released and the person left in the house gets the other half?If they sell then do they only get 50% as the other half has already been released to the child?
Edit.
Just seen you can give a life interest so if i die, my spouse can continue to live in the property wihtout being forced to sell by my trustee ie my daughter

Nessa56

I was wondering about a similar situation I will be in if we ever complete on a house

We thought it would all be very simple. I have 2 fifths and he has 3 fifths as We have 5 children between and it seemed the fairest way for when we die. Don't know now though.

Very confused :eek:

V
x

booksurr

Nessa56 wrote: »

I was wondering about a similar situation I will be in if we ever complete on a house

We thought it would all be very simple. I have 2 fifths and he has 3 fifths as We have 5 children between and it seemed the fairest way for when we die. Don't know now though.

Very confused :eek:

Joint Tenancy: on death the survivor automatically gets the whole house. Neither person owns "half", they both own the whole lot together. so when one dies the other person already owns the whole lot anyway. Therefore it is impossible to leave a "share" to another person in a will if owned as Joint Tenants

Tenants in Common: each person owns a defined % of the property., on death of one person
a) where the deceased had made a will: their share passes to whoever they nominated in their will, eg: their wife, their children or a dogs home charity. The surviving owner continues to live in the property and the new co-owner cannot force them out or sell the property from under them unless the co-owner gets a court order. It would be very unlikely for a court to grant such an order if it remained the survivors ongoing main home and impossible if the will specially ensures that the survivor is given a "life interest" in the deceased's share of the property

b) if there is no will: the deceased's share forms part of their total estate and is simply split as an amount of money (not a share of a property) under the laws of intestacy whereby the £ in the estate is divided up according to the law of who gets what in which country of the UK: https://www.gov.uk/inherits-someone-dies-without-will
the surviving husband/wife could therefore face having to sell if the other party wants to get "their" money out of the estate and the property accounts for most of the £value. Again however a court order would be required although obviously there is no life interest protection in this case as there was no will.

matttye

class2ldn wrote: »

How does a share of the house get passed onto a child if the other person is living there.
My understanding was the house would have to be sold but just reading that its not the case, i take it then that half the equity just gets released and the person left in the house gets the other half?If they sell then do they only get 50% as the other half has already been released to the child?
Edit.
Just seen you can give a life interest so if i die, my spouse can continue to live in the property wihtout being forced to sell by my trustee ie my daughter

You should seek legal advice on this. Not only will a solicitor be able to accurately answer all of these questions, but they will also be able to draft the trust deed. Note that your partner and you may need to seek separate advice due to the risk of a conflict if the same solicitor advised both of you.