Occupational rent

richy4

A friend of mine has been contacted by solicitors representing her ex.

Ex moved out of jointly owned property, voluntarily after relationship broke down.

My friend put in all deposit money, ex did not put anything in apart from purchase fees.

The ex's solicitor has sent a letter asking for occupational rent.

Tried to Google this, but nothing meaningful comes up.

Is occupational rent a one-off payment only for the amount of time that the ex has been absent

My friend just wants this over and done with, if occupational rent means a one off payment and then she can get him off the mortgage then she is happy, subject to negotiation over the occupational rent amount.

My friend doesn't want to sell.

00ec25

richy4 wrote: »

A friend of mine has been contacted by solicitors representing her ex.

Ex moved out of jointly owned property 4 years ago, voluntarily after relationship broke down.

My friend put in all deposit money, ex did not put anything in apart from purchase fees. so ex contributed something.Did ex also pay towards the mortgage whilst living there?

The ex's solicitor has sent a letter asking for occupational rent.

Tried to Google this, but nothing meaningful comes up.

Is occupational rent a one-off payment only for the amount of time that the ex has been absent, so the last 4 years in this case?

My friend just wants this over and done with, if occupational rent means a one off payment and then she can get him off the mortgage then she is happy, subject to negotiation over the occupational rent amount.

My friend doesn't want to sell.

occupational rent is what you think it is. Given it is a joint mortgage then ex must be regarded as a legal owner as it would be highly unusual to be party to the mortgage without being an owner

ex therefore has, quite rightly if the situation was reversed, taken umbridge at the fact he has money tied up in a property where he cannot use the property himself nor is it producing any form of income from his share of it.

"occupational rent" is the ex's claim for the fact that your friend occupies ex's share of the property. It will be whatever he wants: an ongoing rent payable every month, or a one off lump sum. What has the solicitor's letter asked for? It is of course a heavy lever intended to force your friend to sort out the position and allow ex to move on with his life. That probably means by paying off ex for his share of the property's equity value and release from the mortgage.

presumably the fact ex is using a solicitor shows that both sides are unable to reach amicable agreement, so your friend has a fight on her hands over who paid what and who can prove who paid what.

G_M

* A & B own a property jointly.
* A lives in the property and benefits from his ownership
* B lives elsewhere and gets no benefit from ownership. Indeed, B has to pay rent elsewhere
* B therefore claims 'occupational rent' from A, since A is 'occupying' B's half of the property.

The added complexity comes when you consider
* who paid the original deposit
* who paid the mortgage if/when A & B both lived there
* who paid the mortgage after B moved out
* who has paid the running costs (council tax, utilities etc) and more importantly the maintenance and repairs

You don't say whether A & B are married. If they are, then it's time they got divorced (!) and this matter would be part of the divorce settlement. If they aren't, i's time they sorted out the property and separated their lives financially (as well as physicaly & emotionally). A should buy B's share of the property or the property should be sold and the proceeds divided, having consideration for the elements outlined above.

richy4

Thanks for the replies.

Just to clarify the overall definition of the occupational rent term then, it is a sum either ongoing or a lump sum calculated only from the time of the ex's exclusion from the property.

They were not married. The ex left voluntarily, my friend never told him to leave and he has always had the option to return and my friend has never said he could not return.

saajan_12

richy4 wrote: »

My friend:
-Paid initial deposit- rough number?
-Paid half mortgage for the time ex was living in property- fair, half mortgage for half occupation.

-Has continued to pay mortgage and all bills on time ever since (no contribution from ex) - fair, friend had full occupation.
-Wants to offer ex a sum equivalent to the return of all his half of the mortgage payments for the time he lived in the property only, she has already paid him back furniture costs-
Time value of money: ex's contribution 4-7 years ago is worth more now than the sum of the dollar values due to inflation / lost interest. Also, ex was liable for a mortgage, reducing his ability to get credit elsewhere.

Ex:
-Did not pay initial deposit- you say he did pay purchasing fees thought.. how much was this?
-Paid half mortgage only for time living in property
- fair
-Refused my friend's cash lump sum offers of his mortgage payments back for time lived in property.

Can my friend not make the case that the ex has not provided his share of the mortgage for the last 4 years and counter claim this against him?- but then friend would have stayed in ex's share so should pay half rent

I think there are three ways of resolving this fairly, but at the end of the day it's a negotiation

1) Friend buys out ex's contributions as if they were loans. Friend pays current value of ex's contributions (purchasing fees + mortgage payments x 7 years of inflation). Friend remortgages in their sole name and pays half fees for this

2) Friend buys out ex's share Work out ex's share = purchasing fees + half of capital repaid (not interest portion) in first 3 years. Say this is A%, so friend pays ex A% of the current house value, so ex gets teh benefit of any house price increase. Their mortgage interest / bills contributions for 3 years paid for their living expenses in lieu of rent.

3) Friend pays occupational rent for 4 years Friend pays half the market rent for 4 years + half the purchasing fees. Ex pays half the mortgage payments for 4 years + half the initial deposit. Then friend pays 50% of current equity (current value - mortgage balance) to ex. The net of these figures is the total payment.

In any version, one party needs to raise a mortgage in their sole name make one of the above payments and remove the property from the other's name, so the ongoing link is broken between the two. If they can't afford it, the property needs to be sold.