Joint mortgage, renting a room

greatcrested

With each of your posts I have read Tessa I become increasingly convinced that

* you have serious gaps in the legal implications of your plan

* worse, you have inaccurate understanding of the legal implications

* you are determined to re-iterate and substantiate your inacurate understanding at any cost, in order to justify yoyr initial plan, rather than seriously learn from the many posters here trying to help and advise you

If you and your sister tried unsuccessfully to sell for a year, the solution is not to bring in a tenant/potential tenant with all that that entails, the solution is to price the property to attract a buyer.

SELL!

The question of shared equity then is resolved - you simply take 50% each with no complications about who paid how much mortgage.

Tessa37

greatcrested said:

With each of your posts I have read Tessa I become increasingly convinced that

* you have serious gaps in the legal implications of your plan

* worse, you have inaccurate understanding of the legal implications

* you are determined to re-iterate and substantiate your inacurate understanding at any cost, in order to justify yoyr initial plan, rather than seriously learn from the many posters here trying to help and advise you

If you and your sister tried unsuccessfully to sell for a year, the solution is not to bring in a tenant/potential tenant with all that that entails, the solution is to price the property to attract a buyer.

SELL!

The question of shared equity then is resolved - you simply take 50% each with no complications about who paid how much mortgage.

I am willing to drop the price but not my sister. 
My sister agreed to rent out the room but changed her mind when I already made my commitments somewhere else. 
She is happy to pay full mortgage to bank, but she would like to get money back out from the sale. That's where the problem with equity comes from... 
I wanted to move out last year and lodger was supposed to move in. The person who would rent the room out- would still live with the owner of the flat; my sister therefore lodger. 
My sister refused that last minute, suggesting that we should rather sell (Spring last year) If my sister will not drop the price, it can takes ages as it already did... She agreed to rent out the room this Summer, however now she doesn't. 
If she decides not to pay the full mortgage, I will have to pay... and she will end up living in two bedroom flat towards I put almost double deposit compare to hers. 
I've already moved out and I sign the contract somewhere else. Selling would be ideal option but it might not happened soon... If our verbal agreement  (about renting out the empty room) what happens if one of us move out was done in writing through solicitors in declaration of trust we wouldn't be in this situation. 

oldbikebloke

Tessa37 said:
I am willing to drop the price but not my sister. 

My sister agreed to rent out the room but changed her mind when I already made my commitments somewhere else. 
She is happy to pay full mortgage to bank, but she would like to get money back out from the sale. That's where the problem with equity comes from... 
.....
I've already moved out and I sign the contract somewhere else. Selling would be ideal option but it might not happened soon... If our verbal agreement  (about renting out the empty room) what happens if one of us move out was done in writing through solicitors in declaration of trust we wouldn't be in this situation. 

that is fair, she WILL have paid more off the loan than you will if you do not pay towards the mortgage and she therefore pays your bit on top of her bit.
Why do you have such a problem with that?

Yes you are correct that the law says where someone contributes towards a mortgage and the other person does not, then the person making the contribution is, in the yes of the law, "buying" more of the equity as it is their money which is paying off the loan and therefore increasing the equity.

It appears it is your greed which is making you blind. If you think you should still get 50% of the money from the sale, but you have not paid the mortgage, then you are mistaken. That said, such disputes can only be settled in court, so you will end up taking your sister to court, which is why people posting on here are telling you to find a better solution - unless of course you have no wish to ever speak to your sister again? I assume your parents are dead so they can't intervene?

Tessa37

This is reason why I wrote here.
Before we agreed to buy property together we verbally agreed, one moves out: someone else moves in... 
I surely would not tell my sister, I don't want to rent out the room last minute  and put her in the position where she would pay over £2000 per month because I changed my mind and as you can see I already said a few times we discussed this between each other countless times. 
If she can have two bedroom flat for herself I think it's fair she pays some part without asking money from the sale. She would pay much more anywhere else in our area for two bedroom flat. I would not make money on renting out the room... It was logical to me and to my sister before we purchase the flat, tenant/lodger would pay for an empty room. That's not being greedy. Also, if own the part of the flat I do have rights to rent it out. Which I found out today. Therefore no, I do not see reason returning money to my sister who would stay in two bedroom flat for less than market price as I would be still paying additional cost!
Written agreement will clarify everything. 
I am going to pay for solicitor advice as with all the respect your comments are not saying much. 

hazyjo

Just forget the lodger. She doesn't want one and she's entitled to have changed her mind. By keep repeating it, won't make it any more likely to happen!

Mrcsmrs

I’ve been in a similar position to you, except that I was the joint tenant who remained in the property and paid the full mortgage whilst my then partner decided to move out and contribute nothing. He also refused to allow the sale of the property unless he was given 50% of the equity. I’d paid the mortgage completely and maintained all the other aspects of the property for almost 2 years at the point he agreed to the sale and the property had increased significantly in value. Because of our joint tenant status and the fact that I didn’t have an unlimited budget for legal costs I had to accept that he got 50% of the equity. Therefore I’d say that you’re unlikely to lose equity in the property unless your sister starts legal action to try to claim what she’s paid back. I couldn’t the costs were prohibitive. 

In fact I’d suggest that you find a solicitor to sort you out a written agreement that you own 50% of the equity at the point that you stop paying the mortgage and that she takes over the mortgage and then benefits from any increase in value, especially if she doesn’t want to reduce the price. If you can get her to agree to that then great you can both go your separate ways, though in the current climate I think in her place I’d be asking for the money I’d paid in full to be taken from the equity before it’s split. Realistically you can’t afford to pay for both, legally you can’t take a lodger and because of the situation with tenancies and the delays in enforcing eviction at the moment a tenant is an even worse idea. If your sister is willing to take on the full mortgage any increase rightfully belongs to her. 

Tessa37

Mrcsmrs said:

I’ve been in a similar position to you, except that I was the joint tenant who remained in the property and paid the full mortgage whilst my then partner decided to move out and contribute nothing. He also refused to allow the sale of the property unless he was given 50% of the equity. I’d paid the mortgage completely and maintained all the other aspects of the property for almost 2 years at the point he agreed to the sale and the property had increased significantly in value. Because of our joint tenant status and the fact that I didn’t have an unlimited budget for legal costs I had to accept that he got 50% of the equity. Therefore I’d say that you’re unlikely to lose equity in the property unless your sister starts legal action to try to claim what she’s paid back. I couldn’t the costs were prohibitive. 

In fact I’d suggest that you find a solicitor to sort you out a written agreement that you own 50% of the equity at the point that you stop paying the mortgage and that she takes over the mortgage and then benefits from any increase in value, especially if she doesn’t want to reduce the price. If you can get her to agree to that then great you can both go your separate ways, though in the current climate I think in her place I’d be asking for the money I’d paid in full to be taken from the equity before it’s split. Realistically you can’t afford to pay for both, legally you can’t take a lodger and because of the situation with tenancies and the delays in enforcing eviction at the moment a tenant is an even worse idea. If your sister is willing to take on the full mortgage any increase rightfully belongs to her. 

Thank you. You probably know it's not a nice situation to be in... I really think that solicitor in this situation is the best way forward. 

[Deleted User]

oldbikebloke said:

Tessa37 said:
I am willing to drop the price but not my sister. 

My sister agreed to rent out the room but changed her mind when I already made my commitments somewhere else. 
She is happy to pay full mortgage to bank, but she would like to get money back out from the sale. That's where the problem with equity comes from... 
.....
I've already moved out and I sign the contract somewhere else. Selling would be ideal option but it might not happened soon... If our verbal agreement  (about renting out the empty room) what happens if one of us move out was done in writing through solicitors in declaration of trust we wouldn't be in this situation. 

that is fair, she WILL have paid more off the loan than you will if you do not pay towards the mortgage and she therefore pays your bit on top of her bit.
Why do you have such a problem with that?

Yes you are correct that the law says where someone contributes towards a mortgage and the other person does not, then the person making the contribution is, in the yes of the law, "buying" more of the equity as it is their money which is paying off the loan and therefore increasing the equity.

It appears it is your greed which is making you blind. If you think you should still get 50% of the money from the sale, but you have not paid the mortgage, then you are mistaken. That said, such disputes can only be settled in court, so you will end up taking your sister to court, which is why people posting on here are telling you to find a better solution - unless of course you have no wish to ever speak to your sister again? I assume your parents are dead so they can't intervene?

Which law says that the person who paid more of the mortgage is entitled to a greater equity share? 

Comms69

Lover_of_Lycra said:

oldbikebloke said:

Tessa37 said:
I am willing to drop the price but not my sister. 

My sister agreed to rent out the room but changed her mind when I already made my commitments somewhere else. 
She is happy to pay full mortgage to bank, but she would like to get money back out from the sale. That's where the problem with equity comes from... 
.....
I've already moved out and I sign the contract somewhere else. Selling would be ideal option but it might not happened soon... If our verbal agreement  (about renting out the empty room) what happens if one of us move out was done in writing through solicitors in declaration of trust we wouldn't be in this situation. 

that is fair, she WILL have paid more off the loan than you will if you do not pay towards the mortgage and she therefore pays your bit on top of her bit.
Why do you have such a problem with that?

Yes you are correct that the law says where someone contributes towards a mortgage and the other person does not, then the person making the contribution is, in the yes of the law, "buying" more of the equity as it is their money which is paying off the loan and therefore increasing the equity.

It appears it is your greed which is making you blind. If you think you should still get 50% of the money from the sale, but you have not paid the mortgage, then you are mistaken. That said, such disputes can only be settled in court, so you will end up taking your sister to court, which is why people posting on here are telling you to find a better solution - unless of course you have no wish to ever speak to your sister again? I assume your parents are dead so they can't intervene?

Which law says that the person who paid more of the mortgage is entitled to a greater equity share? 

I've asked this too, so far no-one has linked anything beyond an opinion of what 'may' happen

oldbikebloke

Tessa37 said:
You are missing the point! She would have to take me to the court! 

I am not, that is exactly the point I made: a court would have to decide.
The rest of your comments are hard to understand due to your poor English and anyway you have made it clear you have no interest in anyone's opinion but your own so it is pointless responding to your comments regarding the "unfairness" you think is going to happen.