Just how bad is it?

visidigi

Family member recently bought a new build on HTB with her partner - the partner paid in no money in deposit, paid no mortgage payments, basically paid nothing.

The family member stumped up the deposit, paid for the mortgage payments, all furniture and content (apart from a bed and sofa the partner bought on finance).

They have lived in the house 6 months.

The paperwork has nothing drawn up, no deposit notes, no percentage etc etc.

They have split up, partner has moved out. They were both on the deeds and the mortgage, family member has booked in with solicitor to get her removed from the deeds/mortgage (mortgage has agreed she can afford it on her own).

Question now comes up, partner has gone angry, seeked advice and is now claiming entitlement to 50% of the house (despite being there for only 6 months).

How bad is this? Is she going to really need to buy out 50% too? Ive advised her to seek legal help, but value local opinion on this board.

Thanks

andrewmp

I'd imagine he'd be entitled to half of any equity, I'm guessing there won't be any though so he can whistle.

Callie810

Did they sign as joint tenants or tenants in common with the solicitors?


If they signed as joint tenants then both parties are (as I understand it) entitled to half.
If they signed as tenants in common they would have had to state what percentage each of them was entitled to.


I'm not sure if this only counts towards selling the house (I'm a newbie FTB) but that was the gist of the forms that we signed the other week.

visidigi

They signed neither....

Thrugelmir

visidigi wrote: »

They signed neither....

Was one or the other. As this is lodged with the Land Registry. Solicitor would have asked the question.

mrginge

Well this begs the question, how much are we actually talking about?

How much deposit and can you prove where it came from?
How much is the mortgage and can you prove who was paying it?
how much has been spent on furniture etc (and by who)

JimmyTheWig

visidigi wrote: »

The paperwork has nothing drawn up, no deposit notes, no percentage etc etc.
...
How bad is this? Is she going to really need to buy out 50% too? Ive advised her to seek legal help, but value local opinion on this board.

Yes, they will be entitled to 50% of the house. It's their house. If your family member was happy with the arrangement to pay for everything while they were together, that won't change now they're not.

But it's not as bad as I think you think.
As well as being entitled to 50% of the house, they are liable for 50% of the mortgage.

For example...
Buy house for £200k.
Deposit £10k.
Mortgage £190k.

6 months later they split.
House now worth £220k.
So your family member will need to give the ex £110k.
But his half of the mortgage is £95k.
Which means she owes him £15k, which she can, presumably, add to the mortgage.

Alternatively...
6 months later they split.
House now worth £190k.
So your family member will need to give the ex £95k.
But half of the mortgage is £95k.
So she owes him nothing.

visidigi

Thrugelmir wrote: »

Was one or the other. As this is lodged with the Land Registry. Solicitor would have asked the question.

Will need to check this, thanks

mrginge wrote: »

Well this begs the question, how much are we actually talking about?

How much deposit and can you prove where it came from?
How much is the mortgage and can you prove who was paying it?
how much has been spent on furniture etc (and by who)

House was £220k I think - deposit was minimum 5%, HTB was used, she paid for F&F.

She can provide deposit source, mortgage payments with no equivalent being transferred in to her account from partner.

Majority of furniture was bought by family member, two items bought by partner, both financed, both available to be removed by partner doesn't want to do so.

Family member also paid all fees and solicitor bills (partner said they would pay them back, ever contributed a penny).

JimmyTheWig wrote: »

Yes, they will be entitled to 50% of the house. It's their house. If your family member was happy with the arrangement to pay for everything while they were together, that won't change now they're not.

But it's not as bad as I think you think.
As well as being entitled to 50% of the house, they are liable for 50% of the mortgage.

For example...
Buy house for £200k.
Deposit £10k.
Mortgage £190k.

6 months later they split.
House now worth £220k.
So your family member will need to give the ex £110k.
But his half of the mortgage is £95k.
Which means she owes him £15k, which she can, presumably, add to the mortgage.

Alternatively...
6 months later they split.
House now worth £190k.
So your family member will need to give the ex £95k.
But half of the mortgage is £95k.
So she owes him nothing.

This is what I thought - the first thing I have asked her to do is get 3 valuations done to establish how much house is worth (its that deadly combination of the estate still being built so its not in a good value state versus new).

looknohands

You want valuations to be lower so there would be no equity in the property, 6 months isn't long it's highly unlikely there would be anything, but... before it's valued just put a washing machine in the garden and let the grass grow.

I think the angry partner thinks they are due £110k? not realising they're responsible for half the debt too?

tlc678910

Hi (perhaps this goes without saying) but the ex should be asked when he would like to collect his bed and sofa (on finance).

I would think it's better not to get into ongoing arrangements between the exes for these. They can be found ok on eBay or freecycle if new ones aren't affordable at the moment.

Tlc

I have just spotted that you did say they are available to collect but the person doesn't want to collect. Tricky - especially if there are years left to pay. They will probably decide they do want them sometime down the line with no notice at a very inconvenient time. Better to sort it out if possible.

MataNui

If he gets awkward she can simply suggest they put the house on the market and sell. since they have not been there long i would guess they are looking at a pretty hefty mortgage exit fee, plus associated EA and solicitors costs. Even if it sells for what they paid its likely he wouldnt get much (or may even have his share of the outstanding bills etc to pay). Thats assuming they get the asking price (unlikely). Or he may need to wait several months (some properties around here have been on for 18 months at least, presumably because the vendor wont budge on the asking price).

Obviously she can continue to live there while its being sold and if she wants drag things on for ever. I would work out the costs and offer him something like a grand to foxtrot oscar.

My daughter has just gone through exactly this (although they had lived in the house longer they had just re-mortgaged). This is how she played it. She said she wouldnt let him buy her out at any price. She took the EA valuation, reduced by 5% (to account for realistic sale price) then deducted EA fees at that price, Mortgage, Mortgage exit fee and a nominal value for solicitors fees and offered him half what was left. He moaned of course but she just stood her ground and he eventually caved. I guess he realised he either gets some money soon (which is what he wanted) or waits for ever.

If she is in the house and he isnt then she holds all the cards.