Hoping for some clarity on settlement of property in a separation

HopingForClarity

I have a difficult situation with my home and am hoping for some clarity of where I stand

Background is as follows

I moved in in late 2014, we lived together for around 6mo, then my partner became ill and had anxiety issues together with heightened insecurity etc. she requested I bought into the property as a sign of commitment.

This wasn’t my preference as our plan had been to move within the next couple of years and we would just lose money from the total we could both muster for a new property in legal fees etc. I had some other investment ideas for my savings that I had I wanted to pursue.

However, it was REALLY important to her and I had absolutely no intention of leaving her, so  I decided to put her feelings first and agreed to buy into the property as tenant in common in mid-2015.  Based on estate agent valuations of £300k my contribution of £150k was a 50% share of the property. This was captured in a Trust Deed.

Things were good for a few years but fast forward to 2021 and my partners mental health issues have deteriorated, which in itself would be manageable. However, where I was once her knight in shining armour and we were a very strong team, she now feels that I am now the source of everything that is wrong in her life and she wants to separate.  

I have tried everything to save the relationship and still care for her deeply. We tried counselling and that helped a lot – right until the counsellor suggested she might have some work to do on herself and she became very reactive and shut that down completely and refused to see him or any other counsellor again.  I have consulted widely on what else I could possibly do but have reached the end of the road.

So now we come to agree financial settlement. What should be straightforward turns out to have a fly in the ointment. The 2015 valuation looks to be around £50k higher than realistic. This only became apparent when some valuations of its 2021 value started coming in at still £300k. whereas all other properties in the same street look to have been increasing steadily by around 45% in that time – so something is clearly off.

We did have a good discussion where we agreed a way forward - she recognised I had paid over the odds in an attempt to make her happy when I bought in and we agreed a fair way to resolve this would be to get a RICS red book valuation of its 2021 value and a retrospective valuation of its 2015 value ( RICS surveyors are quite capable of doing retrospective valuations back to 2002)  we would then pro-rata the returns from the property by the same proportion we put in at. I.e. if it turns out I had put in 60% of its realistic value based on RICS and she the remaining 40% then - we would either sell and split 60/40 or I would move out and she would pay me 60% of the RICS 2021 valuation.

This seems entirely fair and amicable to me.

However, it seems that she has since spoken to her family and her layers and her tack seems to have changed towards going for whatever she can get - or offering me only what she thinks is “fair”. The problem is, with her current state of mind, what seems fair to her, in the context of all the injustices she feels she is suffering , is often alarmingly distorted.

I acknowledge I made an error in not insisting on a RICS valuation in 2015 – but if you appreciate the situation above, you will see that to do so at that time would have undermined the whole purpose of trying to re-assure her. She would have seen any reluctance or even just a focus on the true value as a sign that this was more of a business arrangement for me and therefore render the gesture void.

I am not greedy; I just want what is fair based on the RICS.

But mainly my own situation has changed – I am now suffering from a long-term illness and not currently able to work (although I am working on getting back – it’s not yet clear if that going to be possible) so the difference in the above settlement between what we had agreed and what looks to be legally enforceable based on the trust deed is about £30k in her favour.

With no income or way of getting a mortgage, this is life changing for me in terms of where I can live and what kind of house I can afford. I will likely only be able to afford the be at the bottom end of the market in a remote part of the UK.

I do feel slightly injured in that I tried to do the right thing and put my loved one’s feelings before the financial considerations, when she was down and needed help - and you would hope that sentiment would be returned. But I do recognise hanging on to that frustration will not help.

I am guessing the 2015 valuation is neither here nor their if it goes to court  - and if it went to court I would simply get 50% of the valuation or sale  - less costs / fees etc  - so a case of Caveat Emptor 

Sorry to be so long winded – and thanks for sticking with it if you got this far!

I thought I may as well do my best to put it all down first go rather than drag it out for 3 pages of questions and answers.

Questions

·        Do I have it right that to a court – if it went that way - this is a simple 50/50 split of the current value - no legal recourse to acknowledge the real split in contributions vs realistic value

·        Can I be forced to sell for 50% of current value – if so under what circumstances?

·        What options do I have?

tacpot12

I'm sorry you find yourself in this situation. I agree that it is very unfortunate that your partner is still suffering with her health and that she cannot be fair to you. Personally I think you would be better to settle for £150K. I doubt that the Deed of Trust guarantees that the value of the property you were buying was £300K in 2015 or that you were entitled to any compensation if it wasn't, so I think you will really struggle to obtain more than £150K if you go to court. 
£150K will still by a house in city that I live in, and will buy a very spacious ground floor flat.

You can be forced to sell for 50% of the current value. This article has some information on the circumstances that can be used to do this: Can I force the sale of a jointly owned property (samconveyancing.co.uk)
It also warns of the costs of resorting to the courts. It really is much better to avoid the courts if you can. 

On a final note, I disagree that obtaining a RICS valuation in 2015 would have undermined the purpose of buying the property, which was to reassure her that you were willing to make a long term commitment. It should have been enough for you to buy half the house - you should not have had to overpaid in order to demonstrate your commitment. Requiring you to do so would have implied that you were being manipulated.  I suspect your partner is not adverse to manipulating situations to suit her, and hence my advice to get as much as you can back as quickly as possible without resorting to the courts. 

AdrianC

HopingForClarity said:

I ... agreed to buy into the property as tenant in common in mid-2015.  Based on estate agent valuations of £300k my contribution of £150k was a 50% share of the property. This was captured in a Trust Deed.

You agreed to that £300k valuation six years ago. You cannot look back with the benefit of hindsight and say "But it was wrong", not now.

You are a formal 50% owner of the property. You own 50% of it. If it's sold, you are due 50% of the equity for your 50% share of the ownership.

HopingForClarity

Thank you both very much for the rapid responses. it is appreciated. 

tacpot12 said:

On a final note, I disagree that obtaining a RICS valuation in 2015 would have undermined the purpose of buying the property, which was to reassure her that you were willing to make a long term commitment. It should have been enough for you to buy half the house - you should not have had to overpaid in order to demonstrate your commitment. Requiring you to do so would have implied that you were being manipulated.  I suspect your partner is not adverse to manipulating situations to suit her, and hence my advice to get as much as you can back as quickly as possible without resorting to the courts. 

I agree, if both parties were fully rational and reasonable at that time it should have been possible to get a proper valuation and base our agreement on that.
But as had tried to explain, in the actual circumstances this was not the case. My partner was not processing things rationally at that time. I did not regard it as her fault. it was very clear to me she had an illness that was making her act this way. I wanted to help her feel secure and re-assured. 

thanks a lot for the link - I will have a read  

HopingForClarity

AdrianC said:

HopingForClarity said:

I ... agreed to buy into the property as tenant in common in mid-2015.  Based on estate agent valuations of £300k my contribution of £150k was a 50% share of the property. This was captured in a Trust Deed.

You agreed to that £300k valuation six years ago. You cannot look back with the benefit of hindsight and say "But it was wrong", not now.

You are a formal 50% owner of the property. You own 50% of it. If it's sold, you are due 50% of the equity for your 50% share of the ownership.

Thank you  - yes - I guessed that would be the legal principle. 

But in the circumstances I am sure you can understand why I would want to check if there were any grounds to challenge that norm. 
This seems to be one of those situations where there is quite some distance between what would be fair and what can be legally imposed on one by another. 

HopingForClarity

tacpot12 said:

You can be forced to sell for 50% of the current value. This article has some information on the circumstances that can be used to do this:(link removed as i do not have such mighty privileges yet) 
It also warns of the costs of resorting to the courts. It really is much better to avoid the courts if you can. 

thanks for the link  - was very helpful  - have a much better understanding of the ins and outs of the that process.
the links for the costs involved in court took me to a 20 page document that listed dozens and dozens of actions in family courts  - but oddly none leapt out at me as those that would apply to a Court order to sell a property
at least not one I could determine with any confidence 

to complete the picture, it would be useful to know roughly what is typical court costs for a pretty straightforward case are likely to be  - not married, no children, pre-marital home, tenants in common  - the trust deed will say we each have equal rights to trigger a sale. 
are we talking 5% of the total value of the property  - plus some incidentals?

getmore4less

The 2015 valuation looks to be around £50k higher than realistic. This only became apparent when some valuations of its 2021 value started coming in at still £300k. whereas all other properties in the same street look to have been increasing steadily by around 45% in that time – so something is clearly off

Something is clearly off there is a massive difference between £50 k and 45%

£50k off is 20%

A 45% rise it would have been £207k
that's £93k off

What value did you think was realistic in 2005?

HopingForClarity

thanks for your reply - slight misunderstanding there i think. 

looks like the property was likely worth £250k in 2015
all properties in the same street look to have increased by about 45 % over the same time period based on sold prices  -
so maybe its worth £350k tops now  - but hard to get a clear picture as its the only property of this type on the street and since COVID prices here have gone a bit crazy. Hence the need for a RICS

GDB2222

It is possible, just possible, that you have a case against the estate agents who gave the valuation in 2015. If so, that would be statute barred  after 6 years, so you would need to get your skates on. 

It is unlikely that you have a case against your partner. She was entitled to agree a deal with you, and you signed up to it.  It is possible, just possible, that you could show undue influence on her part, I suppose, but that would be a costly and messy legal case. 

I suspect that you are stuck with the 50%, and any more you can negotiate on moral grounds is a bonus. 

I sincerely hope you both get better.

HopingForClarity

GDB2222 said:

It is possible, just possible, that you have a case against the estate agents who gave the valuation in 2015. If so, that would be statute barred  after 6 years, so you would need to get your skates on. 

It is unlikely that you have a case against your partner. She was entitled to agree a deal with you, and you signed up to it.  It is possible, just possible, that you could show undue influence on her part, I suppose, but that would be a costly and messy legal case. 

I suspect that you are stuck with the 50%, and any more you can negotiate on moral grounds is a bonus. 

I sincerely hope you both get better.

yes - thanks for that  - that is how I see it also. 

negotiating on moral grounds is pretty much the only viable option - and I am in the process of pursuing that direction  - but it is of course proving to be difficult.
From her perspective, instead of the loving partner that has tried to make her happy for years, despite challenging circumstances she actually feels victimised by the world she lives in and what she perceives as a constant stream of insults and injuries she is being unduly subjected to. somehow i am help responsible for everything less than ideal that has happened to her in teh last 7 years  - so she actually feels she is getting the thin end of the wedge no matter what deal she is getting.

i suspect that even if she got 50% she would feel hard done by - and may well even push for more
on the basis that i don't want to go to court - because i will end up with less than half after fees - so i should accept less than half now!! 
sorry for venting here - its just so unnecessary and frustrating i have to get it out.

deannagone

Just wanted to express my sympathies, my son is presently in a situation with a similar make up (but they aren't buying a property thank god).  Including he should, when he was a student,  buy her a 5k engagement ring to show her worth because there should be some sacrifice for love.  Unfortunately a few years on he still loves her and is still trying to deal with the emotional stuff..  There is a long path of her refusing to get help because everyone is against her (and he gets blamed for an awful lot of things that are nothing to do with him).  Unfortunately, people like this find it difficult to move into a healthier mental state because they have things set up to defend the present situation (my son's gf has family to and frankly what they have done and said to him is totally beyond what is acceptable).  Its very painful to watch, and obviously more painful to be involved in. Controlling only begins to describe the hell that comes with a situation like this.

Look at 'The Drama Triangle'., it helps understanding of situations like this.

I realise you feel you have lost money because of this situation, but its better to get out now with that loss.., I'm afraid the losses in mental health and financially will only continue.  I know its involuntary that the relationship is ending for you, which just makes it worse, but in time you will see that the situation was always unsustainable.  No matter how much you try to help her, she has to want to help herself.  She's not there yet and may never be.  

Just walk away and in time, be thankful it wasn't more.  I hope you are able to start a new life for yourself.  I hope you seek further counselling on your own.., this situation is bound to have had an effect on you.  Concentrate on rebuilding your physical and mental health.  You can't control what choices your ex makes, only your own.  You don't want to lose another 10k+ on legal fees, that really is money down the drain.