Am I entitled to money back when house is sold

getmore4less

moneyistooshorttomention wrote: »

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The fact that you seem to be the only one paying the mortgage (from what you say) should give you a higher percentage than what you have put in.
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Your possible "bargaining chip" (if you are being rather generous towards her) is you might be prepared to let her off an extra share of the house equity over and above the 37% you put in (ie the amount you are due because of having been the one paying the mortgage etc).

You don't understand how equitable shares and debt servicing work.

The debt you service "buys" you that share not more.

The OP bough £50k worth of the house from mum and they(OP) are responsible for that debt if they want that share paying out(less whats left of the debt)

They also secured £20k for themselves, that is separate and plays no part in the house equity/share deal
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There is the issue of the other costs being covered but on the equity/mortgage it is clear where the OP stands and what they are due

itchyfeet123

3mph wrote: »

It's only money, and not that much, but its your only Mum.

As someone with a toxic mother -- and I acknowledge we have no reason to assume anything bad about the OP's mum -- I have to roll my eyes at this sentiment. If it's only money and the relationship is so important, then we could just as easily say the mum should just let it go.

moneyistooshorttomention

GDB2222 wrote: »

She should walk away empty handed simply because, more or less, that's how the maths works out.

The property has gained only a maximum of £10k in value since she bought in (at £140k). And that's ignoring any selling costs and the likelihood that any offers will be below the £150k asking price.

So, yes, the OP is theoretically entitled to 35% of any increase in the value over £140k, but in practice after costs that may not be more than the price of an ice cream.

OP put in 37% of the house value. Therefore, even if the house was the exact same value, then OP is due to take back 37% of the value. 37% of even original house value is worth rather (a lot) more than an icecream.

That's before we go into the self-respect issue - ie how much self-respect will OP have if she lets someone else walk off with some of HER money?

rosyw

OP OWNS (according to mum) a 1/3rd share of the house. When the house is sold OP is entitled to 1/3rd share of the proceeds after the mortgage and other expenses are paid, mum has SOLD that 1/3rd share in order to clear her debts & start a business. We don't know the circumstances behind OP taking out the mortgage, possibly mum had got into such a financial mess that she would have had to sell the house to clear her debts if OP hadn't stepped in? The £50K handed over to mum wasn't a gift!

A few of you think that OP should walk away with nothing, however, if YOU owned a 1/3rd share in a property - would you? I doubt it!!

iammumtoone

I think you are viewing this the wrong way possibly that you gave your Mum 50K in cash (as she physically had the money) therefore you are thinking you should get that back (or at least some of it).

This is not what happened, what you did was invested the money into property (her house), she sold you a part share. Unfortunately that investment didn't pay off, as the house valve hasn't increased you wont see a return by the time selling fees have been paid (which you will be liable for your share).

Its not all bad you have benefited from your investment as others have pointed out you have lived cheaply for this time.

If I brought a house for £150K and sold it for £150K I wouldn't get any money back but would have still been paying out all the time I had it for the interest.

It might be an idea to find a solicitor for the free half hour to get them to double check the figures although it seems your Mum might be right. I do think your Mum could/should have explained this to you better than just saying "you wont get anything".

csgohan4

sadly another thread on why money and family shouldn't mix, especially when buying a house with your mother.


Unless your not expecting it back, don't 'lend' money to family/friends

itchyfeet123

GDB2222 wrote: »

She should walk away empty handed simply because, more or less, that's how the maths works out.

The property has gained only a maximum of £10k in value since she bought in (at £140k). And that's ignoring any selling costs and the likelihood that any offers will be below the £150k asking price.

So, yes, the OP is theoretically entitled to 35% of any increase in the value over £140k, but in practice after costs that may not be more than the price of an ice cream.

It could be that's what the mum meant when she told OP she wasn't getting anything, i.e. that there was nothing left to get after taking account of the costs.

I think it would be worth formalising how the proceeds of the sale will be distributed. If the house sells for between 139k and 150k, the end result will be the same regardless. But the house could sell for a lot more or less than 150k. If the OP wants a return based on having contributed 3X% of the value, then in the even the house sells for less than 139k (or even it sells for slightly more but the net after sales costs is less) she should face a proportion of the loss. If the OP wants to guarantee her 50k back, regardless of the selling price, then she has to forego the potential for a share of the house's appreciation. Obviously it's fairer to make these decisions under the "veil of ignorance", i.e. before knowing how much the house sells for.

iammumtoone

Nobody is saying that the OP own doesn't own a third of the house. If she had paid her Mother 50K cash then yes she would get 50K cash back. What everyone seems to be missing (including the OP) is that she didn't give 50K cash she took out a mortgage to borrow that money form the bank. When the house is sold the OP will get the 50k but they wont be able to keep it as they owe it back to the bank.

If the house had increased in value and a 1/3 share was now worth 80K then the OP would pay the 50K back to bank and walk away with the extra. Its due to the house not increasing in value why the OP is in this situation, that's the risk of putting money into property.

itchyfeet123

rosyw wrote: »

A few of you think that OP should walk away with nothing, however, if YOU owned a 1/3rd share in a property - would you? I doubt it!!

It wasn't clear in the OP, but I'm assuming the "nothing" here refers to an amount over the original 50k, not that the mum is planning to keep OP's 50k.

silvercar

rosyw wrote: »

OP OWNS (according to mum) a 1/3rd share of the house. When the house is sold OP is entitled to 1/3rd share of the proceeds after the mortgage and other expenses are paid, mum has SOLD that 1/3rd share in order to clear her debts & start a business. We don't know the circumstances behind OP taking out the mortgage, possibly mum had got into such a financial mess that she would have had to sell the house to clear her debts if OP hadn't stepped in? The £50K handed over to mum wasn't a gift!

A few of you think that OP should walk away with nothing, however, if YOU owned a 1/3rd share in a property - would you? I doubt it!!

This isn't right. OP financed the purchase of 1/3 share by way of the mortgage. So the mortgage repayment comes out of the 1/3 share.