Advise Needed tenants in common mortgage

wazzbean

A friend of mine currently has a tenants in common mortgage where they owned 2/3s and the other person owns 1/3 however they recently died and are not getting any commutation with the next of kin.

Has anyone dealt with a similar event before who knows what could happen. Will they have the right to take over the other persons 1/3 or could the other persons next of kin have force a sale even though its currently in negative balance due to only been approved for around 2years.

any advice appreciated in this tough time

foxy-stoat

The other owners shares will go into their Estate. I would get the property valued now in writing and a settlement figure from the lender in writing so you can prove there is no equity at the time of death.

Your friend should take legal advice as to what happens next, the lender will need to be informed.

getmore4less

If the property is in negative equity ie. the mortgage is more than house is worth then the usual outcome is the survivor(s) owns the house unless the estate pays of the share of the mortgage to secure the beneficial interest.

was a deed of trust done at the time outlining the ownership and what happens in the event of death.

Mortgages are not tenants in common they are joint.

Without equity there is no real beneficial ownership.

if they can get hold of a death certificate they can get the deceased removed from the legal title.


BUT it is unusual to be in negative equity unless the price has crashed as there would have been deposits.

foxy-stoat

You can be joint tenants or tenants in common - the main difference is "joint tenants" the ownership auto transfers to the other joint owner on death - "tenants in common" their part equal or unequal with percentage split it would form part of the Estate.

Both would remain jointly and severally liable for the debt though.

getmore4less

Technically the house or a share does not form part of the estate if there is a mortgage, only the free equity(can be the beneficial interest) as the secured debt owns its bit first.

The details will be critical to what happens next to any equity available to the beneficial owners.