tenancy in common - buying someone out

pancakes_2

5 years ago I purchased a flat on tenancy in common, 50-50 share, with my brother. He lived there for 3 ½ years then moved out, and I took over paying his share of the mortgage repayments as well as my own, so he has not paid anything into the flat for the last 2 ½ years.
The lock-in period on the current mortgage deal runs out in June next year. I would like to buy him out and take full ownership of the flat, but I’ve no idea how much I would have to pay him.
Is there a straightforward way of calculating what proportion of the flat my brother now owns, considering his payments on the mortgage stopped some time ago? I’ve also made overpayments in the last couple of years, how are these taken into account?
Any advice or experiences appreciated.

carpetbelly

Unfortunately from my understanding of tenancy in common, if you both have a 50/50 share then that still stands.

Personally, either talk to your brother and hope he isn't the type of brother that would screw you (unfortunately mine are so it's something I always have to think about). Or my main advice, go see a solicitor. For the small fee of a consultation you'd get your position legally confirmed. Worth it in the long run me thinks.

nollag2006

Have gone through something similar earlier this year, as a result of a seperation. As carpetbelly says, your brother has the right to enforce his claim for 50% of the property, but you might encourage him to go for less.

Don't forget that stamp duty is payable on this transaction, so keep that in your calculations.

There was a posting on the nortgages and endowments board recently about the levels of stamp duty to be paid in such a transfer of equity transaction

elvis_girl

Yip unfortunately I got stung the same way! He's legally entitled to full market value regardless of whether you have both contributed equal amounts to the mortgage & any home improvements made

pancakes_2

Thanks everyone for your advice (though it's quite hard to swallow - I'm going to need to discuss with a solicitor any way I can get round it). I never got the chance to reply at the time because I promptly fell very ill with flu and had to take time off work- however I wouldn't want to pass on the opportunity to thank you for taking the time to reply.
Regards.

silvercar

As he would be selling within 3 years of moving out, he will not have a CGT liability.

You would only pay stamp duty if the half you are buying off your brother is worth more than 125k.