Divorced: Does my equity 'freeze' once I stop paying the mortgage?

MartinW6

Hi all,


I divorced from my partner in 2012 and stopped paying the mortgage around 2013. At the time, we came to the agreement that I would receive 40% of any equity in the house when it sold in the future. However, did my equity 'freeze' at the house value as it was in 2013, once I stopped paying the mortgage (i.e. I receive 40% of say 275k, as opposed to the house value in the future, say 40% of 375k)? I can't see how this would be the case (how do you retrospectively place a value on a property at any given time, e.g. 2013?).


Thanks for any advice.

HappyMJ

MartinW6 wrote: »

Hi all,


I divorced from my partner in 2012 and stopped paying the mortgage around 2013. At the time, we came to the agreement that I would receive 40% of any equity in the house when it sold in the future. However, did my equity 'freeze' at the house value as it was in 2013, once I stopped paying the mortgage (i.e. I receive 40% of say 275k, as opposed to the house value in the future, say 40% of 375k)? I can't see how this would be the case (how do you retrospectively place a value on a property at any given time, e.g. 2013?).


Thanks for any advice.

What did you agree to exactly?

What I would do is when the house is finally sold I would calculate how many months you owned the property for and divide that over the months your partner owned the property for to figure out a fair percentage.

i.e you purchased it together in let's say 2005 stopped accruing equity in 2013 and the property sells in 2021. You would then get 50% of 40% of the money realized from the sale subject to a few conditions.

Keep_pedalling

The equity you held in 2013 should have been set at whatever percentage of the property it represented at the time, so if the value has risen, or fallen when the time comes to sell then your share should be adjusted accordingly.

Was this a legally drawn up agreement or some dodgy DIY thing?

As for propersy values a RICS qualified surveyer can do that for you for a fee.

AnotherJoe

If you agreed 40% of the equity when it was sold you should get 40% of the equity when it is sold because if it was 40% at the time of agreement, in 2013, you would have had it valued then and a monetary figure agreed at that time, no point saying 40%.

But if you made some dodgy verbal agreement all bets are off if the ex wishes to go legal especially since you seem to have no clue !

davidmcn

MartinW6 wrote: »

we came to the agreement that I would receive 40% of any equity in the house when it sold in the future

Agreed in writing? What exactly does it say?

(how do you retrospectively place a value on a property at any given time, e.g. 2013?)

Same way you value a property now - get a professional to look at it and tell you what it was worth based on comparable open market transactions around the same time.

ACG

House is valued at £100k in 2013. Equity in the house is £10k meaning you get £4k.
House is still valued at £100k. Equity in the house is now £15k due to mortgage payments and you are entitled to £6.5k?

Im not sure how that is fair on your ex. You have paid nothing for 3 years and yet your equity value goes up even if the house price does nothing.

You need to get this resolved sooner rather than later, the longer you leave it the longer your ex could argue that they have been making all of the payments and maintaining the property etc. Get it resolved and draw a line under it. Its not healthy to keep this holding you both together.