Separating with only partner's name on mortgage.

Robroy79

Hi - first time poster and am interested in perspectives on the below;

I’m in a relationship that sadly looks like it is ending after 14 years, my partner and I are not married and have no children. 

We live in her property, I moved in about 11 years ago. The property is in her name as is the mortgage secured against it and we do not have any cohabitation agreement in place. Approximately 9 years ago she had to stop working (issues that involved a tribunal which resulted in a settlement) and has not returned to work since (or made significant efforts to). For this period I have paid 100% of the utilities and for the past 6 years I have paid 100% of the mortgage alongside all of our living costs. This was because she had run down her savings and also run up some card debts that I've taken on. Prior to this she was slightly reluctant to let me own a share of the property (as she bought it before we met). We have about 500k of equity in the property. I had a previous property that was rented out and I sold this and used about 20k (from 90k equity) to renovate her (our shared home) property.

Not sure what to do with this to be honest – the most straightforward way would be for me to move out, agree that I have X amount of equity in the flat and, when she returns to work, she can re-mortgage and buy me out. However, she suffers from severe anxiety and OCD (part of the reason she’s not got back in to work) and is convinced that a change of scene will help her recover.

My partner's idea is that she moves out, and I stay in the property. She would move in to a rental and I would pay for this, I would also continue paying her mortgage on the property she owns and remain there while I try to sell it (we've been trying for about 18 months now without joy). Of course, while I’m doing this I will  be unable to secure a mortgage of my own on another property (due to my outgoings) and the savings I had would be nearly depleted since I’d have to use this to pay for her rental.

Annisele

I suspect you're going to need a solicitor for this one - your partner's idea that you cover her rent for an indeterminate period suggests she's not going to play fair.

I also suspect that there isn't £500k of equity in the flat. If she's been trying to sell for 18 months, then (pandemic notwithstanding) something pretty major is putting buyers off. That something might just be that she obviously doesn't want to sell, but it might be that the price is too high.

I think the better idea would be for the flat to be sold, the equity split, and you both to go your separate ways. It doesn't look as though she's going to be able to get a mortgage, but her share of the equity is likely to let her buy outright in many areas of the country. Even in central London it'd cover rent for a fair while. But she'll likely need advice about benefits before doing that; she doesn't want to put herself in a position where she's deemed to have deprived herself of capital in order to claim benefits (even if the "deprivation" was simply giving you your share). Although - does she claim benefits? If not, she either needs to start a claim or put effort into finding a job.

rik111

Firstly reduce the price of the flat to something more reasonable, its obviously vastly overpriced  ! At the right price it will sell straight away, forget the 500k of equity, its fictional until you sell it. If desperate stick it in an auction.
Just be aware the property is not yours and you are not married so you are at your ex's mercy and might end ip with didly squat.... Should have married her !

Robroy79

Thanks for replying - the equity would be around 600k if we sold at asking price, so the 500k was on the assumption we're going to have to drop the price a fair whack to shift the place. She is putting a hell of a lot of effort in to selling (managing agents and making it look smart and so on) so I've got no fear on that front. I think and feel that she's not thinking about being unfair but more that she is desperate to not be in that particular property, there are some historic issues with harassment (the impact of which has been a factor in our separation), bad tenants when we rented it out (hence the renovation) and my primary concern is her welfare to make sure she doesn't suffer mental anguish more if forced to stay there.  Even though we're separating I want to try and look after her to make sure she can get back on her feet.

As my name isn't on the mortgage, only she can make changes to it and I've asked her to phone the bank to at least ask to flip it to interest only to help my cash flow but she's reluctant to do so on the basis that the bank will sus that she is out of work (they won't care as there's zero chance of her missing a payment at the moment).

Doesn't claim bens as I earn too much (therefore so does the household) and if we sold tomorrow we would just draw a line through the proceeds of sale and move on. 

Annisele

What would happen if you just moved out, paid for a rental for yourself, and left her to it? I completely appreciate you don't want to do that, but I think you should run the numbers on what would happen if you did. Her household income would then fall, and presumably she'd be able to make a benefits claim. How much would she receive, and could she live on it?

The bank won't care that she's not in work; what the bank cares about is whether the mortgage is being paid or not. So long as she continues to pay, the bank can't repossess during the term of the mortgage. And since its a repayment mortgage, unless there are underfunding issues the bank won't repossess at the end of the term either.

As things stand, either your partner isn't thinking or she's being extraordinarily unfair to you. (Well - she's being unfair either way, but it sounds like that might be the result of panic rather than malice.) You're paying the capital part of her mortgage - not just the interest - with no guarantee that you'll get a single penny back. You're not even lending her the money; you're just paying it.

Thrugelmir

Robroy79 said:

My partner's idea is that she moves out, and I stay in the property. She would move in to a rental and I would pay for this, I would also continue paying her mortgage on the property she owns and remain there while I try to sell it 

Suggest that you move out .  As this proposal is entirely at your expense. You've no entitlement to any of the proceeds from the sale. 

[Deleted User]

Thrugelmir said:

Robroy79 said:

My partner's idea is that she moves out, and I stay in the property. She would move in to a rental and I would pay for this, I would also continue paying her mortgage on the property she owns and remain there while I try to sell it 

Suggest that you move out .  As this proposal is entirely at your expense. You've no entitlement to any of the proceeds from the sale. 

I think the OP has a good shot at claiming a beneficial interest in the property should that be something the OP wants to do. 

SpiderLegs

Tbh it sounds you have financed and therefore enabled this behaviour for too long. 

If your justification for that is that you were in a relationship then that’s fair enough. However you are not any more, so the suggestion that you keep paying for her house whilst also forking out for her to live elsewhere is frankly ridiculous.
Probably time to prioritise your own situation rather than hers.

Robroy79

Thank you for the replies on this.
A further question - without any Cohabitation Agreement or Deed of Trust what are the implications on the completion of a sale. The proceeds from the sale of a property that is entirely in my partner's name would mean that the proceeds would be released to her. She would then have to pass on to me a sum in the region of 150k. Would this potential run the risk of being taxed since this would obviously far exceed any gift allowances?

Would it be wise to have a Deed of Trust signed (that recognises my interest) or a Cohabitation Agreement that would also recognise my contribution? At present the only faith I have in my former partner transferring me proceeds from sale is her word and the only hard evidence I have are my bank statements showing 5-6 years of mortgage payments.

tacticalbanjo

Unless you are successful in a claim for beneficial interest, your partner would have to pass you the grand sum of diddly squat. If your partner can't work then she would quite frankly be daft to give up any equity. Consult independent legal advice at the first opportunity.

GHolmesAdmin

I'm afraid 'not fair' is not a legal term.