Shared ownership woes

Morbocrush

Hi Moneysavers

So stupidly I find myself in the situation where I own a property in shared ownership with a married couple that are divorcing. The problem is this, the property is not paid off and although we can afford the repayments from rental the mortgage ends and it is now defaulted to the horrendous %rate. I have the cash (or can raise it from my own home) to pay my part off or even buy their half but instead neither of them wants to do anything as they are "dealing with it" it has been a year already with no progress, and with tax breaks gone on BTL I am basically throwing money away. While I realise this sounds like a good problem to have I purchased this flat as part of my long term pension plans (it has been established I am not smart....) and am trying to pay the capital with free money not the interest.

They won't sell, they won't sign a new mortgage (I don't want a BTL mortgage but would to resolve)

Am I just stuck? I know this is my own fault

AnotherJoe

I see two solutions.
1. Stop paying your share of teh mortgage. That will get their attention.
2. Solictors letter noting your intention to take them to court to force a sale.


I'm gonna take a WAG and suppose there's no agreement you all signed stating what would happen if one party wanted to sell?

jonnygee2

Just stop paying the mortgage, tell them you have decided the best way forward for you is just to wait for repossession to try and recover what you can from the initial investment.

Then wait for them to consider their options.

Morbocrush

There was a written agreement stating no one could force a sale without more than 50% agreeing.

Shoukd I contact the mortgage company ahead of doing this? Another concern is it is long term tennented with really good tennents (agreement specifying a 2 month notice or there abouts)

Though just the threat might get them to pull their fingers out.

AnotherJoe

Morbocrush wrote: »

There was a written agreement stating no one could force a sale without more than 50% agreeing. .

Well, that is literally one of the dumbest things I've ever read in here. What on earth were you all thinking?

I guess the agreement doesn't say anything about stopping paying the mortgage so drop to that, tell them you simply are unable to continue paying so you'll have to accept repossession if they dont wish to sell and cannot buy you out.

No, do not contact the mortgage co, let the others pick up the slack !!! Where's your leverage otherwise? And what would you tell them? "Hi, i propose not to pay you because I'm in a spat with my co-owners"

And I'd start gentle, "sorry guys I'm running out of money, next months payment is the last I can afford, you'll have make up the slack and I'll accept the difference in my missed payments being deducted from my eventual payout" And then, stop paying just like you said you would.

Whats the relevance of the tenants? You arent their mum. You three will have to decide whether to sell with tenants or evict them and sell empty. Unless they might buy?

StumpyPumpy

AnotherJoe wrote: »

Well, that is literally one of the dumbest things I've ever read in here. What on earth were you all thinking?

Got to agree with the sentiment here, at least as far as the OP is concerned. It basically says (assuming equal shares) that the formerly happy couple could force a sale any time they wanted but the OP never could. It would always be two to one in their favour so the OP would never win. They must have loved that clause when it was written in.


SP

Morbocrush

Thanks for the replies, this is what I expected really.

AnotherJoe

StumpyPumpy wrote: »

Got to agree with the sentiment here, at least as far as the OP is concerned. It basically says (assuming equal shares) that the formerly happy couple could force a sale any time they wanted but the OP never could. It would always be two to one in their favour so the OP would never win. They must have loved that clause when it was written in.
SP

Not only that.

One person gets into financial straits, they are stuck
One person wants to change their situation, say use the equity for any of a dozen reasons, including needing it for a purchase with a new partner, they are stuck
The single person gets stuck in a dispute between the couple.
Any dispute between the parties, this can be used vindictively to tie up equity of one of them
And here's a real doozy, the OP hooks up with one of the couple, the estranged other now is stuck if the other two wish to be awkward

And then add to this, the impracticality that if someone not only doesnt want to pay but cannot pay, they still are stuck.
Bottom line, you have handed over a substantial amount of equity, lets say, what, £50k-£100k and tied it up in the control of others.
There is no reason whatsoever for such an agreement, it should be the opposite, if anyone wants to sell, the others must sell or buy out.



No help to OP but possibly of use to someone else setting up a similar agreement

AdrianC

Morbocrush wrote: »

So stupidly I find myself in the situation where I own a property in shared ownership with a married couple that are divorcing. The problem is this, the property is not paid off and although we can afford the repayments from rental the mortgage ends and it is now defaulted to the horrendous %rate. I have the cash (or can raise it from my own home) to pay my part off or even buy their half but instead neither of them wants to do anything as they are "dealing with it" it has been a year already with no progress, and with tax breaks gone on BTL I am basically throwing money away. While I realise this sounds like a good problem to have I purchased this flat as part of my long term pension plans (it has been established I am not smart....) and am trying to pay the capital with free money not the interest.

They won't sell, they won't sign a new mortgage (I don't want a BTL mortgage but would to resolve)

Am I just stuck? I know this is my own fault

I don't really understand the problem, tbh.

Property is owned A+B+C (You are A) - but you don't say what proportions. 50/50 A+(B+C)? 33/33/33 A+B+C? Something else?
All are joint and several borrowers on the mortgage.
B+C are currently married, but divorcing.
The share(s) owned by B+C will be part of the financial settlement of their divorce.

I presume the property is still tenanted? This doesn't affect the operation of the letting business in any way, except (perhaps, if they're being idiots) making unanimity over decisions harder.

If you want to buy B+C out, then so long as they agree and you can afford it, no problem. I presume just one of B or C would be required to agree to reach your "more than 50%" threshold?

Whether you need to mortgage the let property on a BtL or could raise the money from remortgaging your home is a completely separate question. Remortgaging while they are in the current situation seems short-sighted.