Boyfriend and family asking for renovation costs on property (mortgage not under my name)

taunton_girl

Hi everyone, looking for some pragmatic advice here. Please let me know if there's a more appropriate forum for this issue.

My boyfriend's father recently put the deposit down for a house being renovated with the view to myself and my boyfriend living there and paying the mortgage. His father claims that he wants to transfer the mortgage to myself and my boyfriend’s names if and when the time is appropriate i.e. we’re both in stable jobs with a good income, or we get married. However, I have recently been asked to pay between £2000-3000 from my personal savings in renovation costs (painting, flooring etc) before we move in, which my boyfriend’s family see as reasonable due to their verbal agreement of the house as a ‘gift’ and eventually becoming mine. My boyfriend keeps quoting all the money he has personally spent on it so far. I feel very uneasy about being asked to pay these renovation costs, because I currently have no legal ownership of the property and there's no security if the relationship ends. To my mind, and despite their good intentions, I am effectively renting the house from my boyfriend’s father without a contract until/if he transfers the mortgage.

Asides from the emotional difficulty of the situation (it's being implied that I'm devaluing the relationship and the generosity of his parents), it is causing me a great deal of financial concern, as £2000-3000 is a substantial amount of money. If the relationship between my boyfriend were to came to an end, or any other circumstances prevented me from co-habiting in that property, I have no guarantee that they would refund the renovation costs I paid, despite verbal promises. Because I have no legal rights over the property, I see this money as closer to a loan.

Is there any way that I can request for my boyfriend and/or his father to sign a contract or other document guaranteeing the reimbursement of my payment if the relationship does come to an end, to cover any liabilities? I've been researching into co-habitation agreements and promissory notes. Promissory notes seem like the closest example of what I had in mind, although they seem specific to commercial loans to be repaid at a certain date. What I need is a document with a clause stating that repayment would be conditionally due in the case of the relationship ending before I have any legal ownership and my co-habitation in the property ending. Is there any way to receive help or advice with this?

Or should I out rightly refuse to pay these renovation costs on a house that I may never own? I know this could just be something entirely at my own risk.

Thanks for any advice here. I don't know enough about mortgages, legal contracts and terminology to find the right solution.

Caz3121

taunton_girl said:

My boyfriend's father recently put the deposit down for a house being renovated with the view to myself and my boyfriend living there and paying the mortgage. His father claims that he wants to transfer the mortgage to myself and my boyfriend’s names if and when the time is appropriate.

how will the cost of 'paying the mortgage' compare to market rent for similar property?....if the mortgage is cheaper would it be an option to pay market rent instead (higher cost but will help your landlord/boyfriends father cover his costs/tax etc and keeps the relationship business)

He will not be able to 'transfer the mortgage' I am assuming this is not a residential mortgage if he is not going to be living in the property but may be a regulated buy to let mortgage as it will be rented to family. In either case, when/if the time is right, you and your boyfriend would be looking to get your own mortgage and purchase the house from him and his mortgage will be paid off.

Mojisola

taunton_girl said:

Or should I out rightly refuse to pay these renovation costs on a house that I may never own?

I'd go with this line.

If you really want to share the costs of the renovation, get it documented as a loan which will be written off if you ever take on ownership of the property.

Redwino222

The fact that he talking about transferring a mortgage suggests he hasn’t looked into this at all.  

It all seems very strange.  He has bought a house, is renovating it and then at some Vaguely defined point in the future he will sell this house to you and your boyfriend?  You will become equal legal owners and will have to take about a joint mortgage to pay him?  What happens if you split up?

Will you buy the house from him at market value?  Will you have contributed to increasing that market value by funding the redecoration?

Did you have any say over the choice of house, or the renovations and redecoration?

How long have you been in this relationship?  It speaks volumes that your boyfriend doesn’t understand why this makes you uncomfortable.

you need a cleaner per understanding of what is being proposed and you need to be content that your interested are being protected, and that you actually want this.

MovingForwards

This bit is unsettling and enough to say nope, I will do it alone:
His father claims that he wants to transfer the mortgage to myself and my boyfriend’s names if and when the time is appropriate i.e. we’re both in stable jobs with a good income, or we get married.

you only have to read the posts on the relationship board to see where these situations go wrong, more reasons get added as to why it's not being transferred (sold / gifted) to the couple and numerous other things.

Owleyes00

I agree with previous posters, it doesn’t sound like your boyfriend’s dad knows very much about these things and he is not doing you a favour.

He cannot transfer a mortgage to you, you would have to get your own mortgage with a deposit of your own and buy the house off of his dad. He is therefore gifting you nothing. This seems like an investment opportunity for him and he wants to take advantage of having tenants that he knows because he thinks it will be less drama (very unlikely to be the case as demonstrated form your post.

Also, you and he will need to consider the legal implications of you living there and “paying the mortgage” (renting). You will still be his tenants and entitled to the rights of any other tenant, and he will be expected to carry out the obligations of a landlord.

taunton_girl

Thanks for the responses and insights here... lots of implications to consider. I'll be asking him and his dad more questions about the mortgage terms for a start.

If I do decide to contribute, I'll definitely be looking into having this documented as a loan and/or promissory note before parting with any money. Would it be recommended to consult a solicitor about this, or would online legal templates be adequate to draft a workable document?

It's a shame that money and assets sour so many relationships, but I'm not prepared to take a leap of faith and risk losing savings without some protection. Unfortunately, I think his dad believes he's doing us a good deed, but doesn't really understand how transferring a mortgage actually works or the strange position he's putting me in. I don't think he has any intentions like ripping me off for an investment project, but better to have the money protected.

Thanks for the help, this is all quite new to me. My boyfriend and I are in our late 20s and have been together 3.5 yrs.

Redwino222

I would recommend you speak to a solicitor.  

It really sounds very confused.  The focus seems to be on the mortgage but not on ownership of the house.  What is the gift, the deposit? 

Mortgages just aren’t transferred that easily, and I don’t think any of you really understand what is being proposed.  

Can you and your boyfriend get a mortgage now and buy the house yourself?  Do you know what salary level you would have to achieve to get a mortgage to buy the house in the future?

Who decides when you buy him out?

They may be being vague for a reason, this gift isn’t for you, it’s for your boyfriend.  You just happen to be there so will live in it and pay some rent.

getmore4less

as has been said


His father claims that he wants to transfer the mortgage to myself and my boyfriend’s names if and when the time is appropriate


Start with asking what he means by that and how it will happen because  they cannot just transfer a mortgage.

then you can bring up the CGT situation and who will be paying that when you do eventually take over the property from the father