Declaration of Trust

Trebormint

You paid money into an account? Savings account? Was this money in this account then used to pay the improvement costs?

No i did not pay money into an account, why would you think that? It is an overdraft facility and yes it was used to pay for the improvements. So the interest being charged at the time was the amount being paid in. The interest is being paid in by the legal owner, and they are paying it into the 'improvement monies' account

Is the interest paid by the legal owner on the mortgage an 'outgoing'? And therefore one of the deductions from the gross rent before you get 50%

I would guess so yes.

My questions however still stand

Re the 'improvements monies' as I have paid a lot of this off already from my own personal money i.e. I paid in over £40,000 about 1 month ago, will I still be able to get back what is owed from the balance at the time the improvements finished, or as it is not dated within the DOT, does the legal owner have to pay of the balance at the time of sale regardless?

Tom99

Trebormint wrote: »

You paid money into an account? Savings account? Was this money in this account then used to pay the improvement costs?

No I did not pay money into an account, why would you think that?('[FONT=Verdana, sans-serif]improvement monies are in a defined account ....... that I paid')[/FONT] It is an overdraft facility and yes it was used to pay for the improvements. So the interest being charged at the time was the amount being paid in. The interest is being paid in by the legal owner, and they are paying it into the 'improvement monies' account

Is the interest paid by the legal owner on the mortgage an 'outgoing'? And therefore one of the deductions from the gross rent before you get 50%

I would guess so yes.

My questions however still stand

Re the 'improvements monies' as I have paid a lot of this off already from my own personal money i.e. I paid in over £40,000 about 1 month ago, will I still be able to get back what is owed from the balance at the time the improvements finished, or as it is not dated within the DOT, does the legal owner have to pay of the balance at the time of sale regardless?

[FONT=Verdana, sans-serif]Your document seems woefully lacking in detail about the financing of this transaction.[/FONT]
[FONT=Verdana, sans-serif]It looks like the 'Improvement Monies' (whatever they are) must be paid to the Account (the over-draft account?) on a sale of the property and before you split the sale proceeds 50/50.[/FONT]

[FONT=Verdana, sans-serif]Since there in no definition of 'Improvement Monies' then take you pick as to what it means, you would think that it ought to mean the original sum you contributed.[/FONT]

[FONT=Verdana, sans-serif]If the legal owners mortgage is an allowable outgoing that that may be why you are only getting £325 out of £1,350. [/FONT]

ThePants999

Did a solicitor draft this? A document that uses capitalised terms like Improvement Monies without defining them? Seems inconceivable to me...

Trebormint

Yes this was drawn up by a solicitor

Trebormint

The only wording in association to the 'Improvement Monies' are as follows which I don't think helps at all.

The Legal Owner and the Contributor intend to improve the Property and the cost of such improvements (“the Improvement Monies”) shall be paid out of an account X (“the Account”) held by the Contributor at Bank Account Number Y

So my understanding is as I thought;

At the time of sale, the balance (whatever that is) on this account i.e the 'improvement monies' must be paid off and any proceeds/profits left after clearing the mortgage must be split 50/50?

Thrugelmir

Trebormint wrote: »

Yes this was drawn up by a solicitor

Did one of you seek independent advice before signing the DOT.

Tom99

Trebormint wrote: »

The only wording in association to the 'Improvement Monies' are as follows which I don't think helps at all.

The Legal Owner and the Contributor intend to improve the Property and the cost of such improvements (“the Improvement Monies”) shall be paid out of an account X (“the Account”) held by the Contributor at Bank Account Number Y

So my understanding is as I thought;

At the time of sale, the balance (whatever that is) on this account i.e the 'improvement monies' must be paid off and any proceeds/profits left after clearing the mortgage must be split 50/50?

No, not the balance, the amount to be repaid is the cost of the improvements (Improvement Monies - as defined) as taken from the Account. Since you say you have paid off some of this loan the balance is presumably less than the cost of the improvements.

Trebormint

Indeed it is the cost of improvements, but at no point does it state where/when any money leaving or being paid into this account are not attributable towards improvements, so unless otherwise specified any money effectively leaving or being paid into this account could be deemed as 'improvements monies', so I am still struggling to see how it can't be the end balance at property sale.

Trebormint

Hi,

Found another page of the document that might help some more, sorry this was hidden in another envelope so I didn't have it.

The wording is as below;

(a) By a Transfer of even date the property (“the Property”) details of which are contained in the schedule hereto was transferred to the Legal Owner
(b) By a Mortgage (“the Mortgage”) of even date and made between the Legal Owner (1) and X (2) the property was charged to X to secure the sum of the sum of Y
(c) The balance purchase money was provided by the Legal Owner
(d) The Legal Owner and the Contributor intend to improve the Property and the cost of such improvements (“the Improvement Monies”) shall be paid out of an account (“the Account”) held by the Contributor at Bank Account Number

Still not clear about this as it does not state when monies should stop being paid out of this account so that a freeze was made on a balance which represents the final repayment amount due to be repaid against this account. As additional maintenance and other costs were run over the years these will also need to be repaid i.e new roof, new drive etc etc

(e) The Legal Owner and the Contributor make this declaration to set out their respective interests in the Property and its proceeds of sale and net rents and profits thereof until sale.

Trebormint

Hi, I think it's all clear now and it will be the balance at the date when the tenant moved in and any other bits that needed to be done during the rental period.

Thanks for everyones help