House renovation being carried out without a co-owners consent/knowledge

RAS

doodling said:

As a result we can't infer how much equity is in the property.  Having said that, it might be helpful to understand the sums involved - spending £10k to force a sale so as to receive £5k back may be a difficult pill to swallow (but still might be worth it if she gets released from the mortgage).

I presume that freedo and his partner do know the value of the CMS charging order, although I understand that this might be subject to challenge?

freedo25

Section62 said:

doodling said:

I don't think this chain of thought has lead to the right conclusion.

It actually led to a question, two in fact, not a conclusion.

doodling said:

The simple fact is that (to my admittedly imperfect knowledge) it is extremely rare for a mortgage company to remove anyone from a mortgage (i.e. vary an existing mortgage deed).

I generally agree with this.  But the point wasn't about whether or not the mortgage company might remove someone from a mortgage, the question is about the reason given why they hadn't agreed - in the circumstances having someone "to chase" doesn't make a great deal of sense, unless there is very little equity.

doodling said:

What normally happens is that the person who wants to be the sole mortgagor obtains their own mortgage and pays off the existing mortgage.  In this case, that person has recently been in an IVA and I can imagine that they would find difficulty in finding someone to give them a mortgage.

I agree, but the ex has a new partner and children also living in this property as their home.  There could be options around the new partner being the sole mortgagor, or a joint mortgage involving them - rather than sticking with an existing joint mortgagor who has no interest in the property other than a share of the equity.

In which case the amount of equity is of crucial importance - why would the OP's partner bother paying for someone else's home if the equity they have is small and it will cost most of that to force a sale and realise that value?

doodling said:

Lenders do not work solely on the basis that they can always get the money back by repossessing and selling the property - doing so is expensive and makes them look bad.  Their first question will always be "will this person pay me back?", only if the answer to that is yes will they ask the second question "if they didn't pay me back, could I sell the house and get the money that way?".

So there's a third question - number two in that order - which is "Is this other person who doesn't live in the house more likely to pay me back than the one(s) living there?"

doodling said:

As a result we can't infer how much equity is in the property.  Having said that, it might be helpful to understand the sums involved - spending £10k to force a sale so as to receive £5k back may be a difficult pill to swallow (but still might be worth it if she gets released from the mortgage).

I agree.

The guys new partner was named as taking over the mortgage when negotiations occurred early last year. They lasted about 7 months and when negotiations were close to being finalised (we even engaged a solicitor) they simply stopped communicating - coinciding with the time he lost his family court battle. 

The partner is named as the MD of his new Ltd company. This is because he cannot act as a director any more and it's useful for hiding your true earnings from the HMRC and the CMS. She doesn't actually run the company needless to say - in name alone. No doubt the money being ploughed into the house is in her name, not his. 

A few months back, we estimated there to be approx £80k in equity in the property. Looking at planning applications and recent photos, we estimate there's probably about 100k being spent on 2 big  extensions currently. He does well earning £140 a week gross as an electrical contractor running a fleet of vehicles and employing several others. His father is a convicted fraudster and this person is very much cut from the same cloth. 

There is every level of narcissism at play here and has been for many years. I apologise that certain 'simple' things like forcing sales haven't occurred but to describe this situation as a living nightmare, would only do a disservice to living nightmares...

pinkshoes

I would go with a good old fashioned letter!

Dear <ex's name>

I am delighted to see that renovations are taking place to our property to increase the value. As a 50% owner of this property, may I point out that I will also be entitled to 50% of the increase that these renovations are adding.

Should you wish this not to be the case, then I will agree for you to buy me out of my 50% share at the pre-renovation valuation of £X. As the current mortgage stands at £Y, then this would equate to £Z.

I look forward to hearing from you within 28 days regarding how you wish to proceed. If you do not wish to buy me out at £Z (less half the legal fees) then I will be taking the matter to court and forcing a sale where I will be asking for 50% of the increased price along with ALL legal fees to be paid by you due to your refusal to sell the property which I have not lived at for over 10 years.

Kind regards,

<you>

doodling

Hi,

Section62 said:

[...]

doodling said:

The simple fact is that (to my admittedly imperfect knowledge) it is extremely rare for a mortgage company to remove anyone from a mortgage (i.e. vary an existing mortgage deed).

I generally agree with this.  But the point wasn't about whether or not the mortgage company might remove someone from a mortgage, the question is about the reason given why they hadn't agreed - in the circumstances having someone "to chase" doesn't make a great deal of sense, unless there is very little equity.

I agree that the phraseology is poor, but it is still valid.  A lender will not remove people from a mortgage because, bluntly it is not in their interest to do so.  Why only have one person to pursue for money when they can have two?  This is not a decision driven by the amount of equity but simply by the choice between doing nothing (two people on the hook) or increasing their risk (one person on the hook) - why would anyone take the second option?

doodling said:

What normally happens is that the person who wants to be the sole mortgagor obtains their own mortgage and pays off the existing mortgage.  In this case, that person has recently been in an IVA and I can imagine that they would find difficulty in finding someone to give them a mortgage.

I agree, but the ex has a new partner and children also living in this property as their home.  There could be options around the new partner being the sole mortgagor, or a joint mortgage involving them - rather than sticking with an existing joint mortgagor who has no interest in the property other than a share of the equity.

In which case the amount of equity is of crucial importance - why would the OP's partner bother paying for someone else's home if the equity they have is small and it will cost most of that to force a sale and realise that value?

I think your argument is that the OP's partner should be considered as someone who if pressed would simply walk away from their legal responsibilities and not care about the consequent effects on their credit rating.  Most people at least attempt to meet their financial responsibilities and a good proportion of those who are not driven by conscience are driven by the potential effects on their own financial standing.

doodling said:

Lenders do not work solely on the basis that they can always get the money back by repossessing and selling the property - doing so is expensive and makes them look bad.  Their first question will always be "will this person pay me back?", only if the answer to that is yes will they ask the second question "if they didn't pay me back, could I sell the house and get the money that way?".

So there's a third question - number two in that order - which is "Is this other person who doesn't live in the house more likely to pay me back than the one(s) living there?"

No, that question never gets asked because the default position is the existing mortgage and a new mortgage stands or falls on its own merits, not by comparison to the status quo.

To some extent I suspect the whole issue is moot.  The ex doesn't seem to want this settled (except perhaps on terms unacceptable to the OP's partner) so is unlikely to be pushing his current partner to take out a mortgage.  The only thing that will resolve this is either a change of heart by the ex or legal action by the OP's partner.  The fact that the ex has been subject to an IVA might mean that they themselves have little or no equity in the property at all - you can see why they wouldn't want to sell.

canaldumidi

pinkshoes said:

I would go with a good old fashioned letter!

Dear <ex's name>

I am delighted to see that renovations are taking place to our property to increase the value. As a 50% owner of this property, may I point out that I will also be entitled to 50% of the increase that these renovations are adding.

Should you wish this not to be the case, then I will agree for you to buy me out of my 50% share at the pre-renovation valuation of £X. As the current mortgage stands at £Y, then this would equate to £Z.

I look forward to hearing from you within 28 days regarding how you wish to proceed. If you do not wish to buy me out at £Z (less half the legal fees) then I will be taking the matter to court and forcing a sale where I will be asking for 50% of the increased price along with ALL legal fees to be paid by you due to your refusal to sell the property which I have not lived at for over 10 years.

Kind regards,

<you>

Might backfire - ex might request 50% of the renovation costs........

There's really only one way forward: forcing a sale. Yes, difficult. Yes, time-consuming. Yes, costly. But 10 years of failed negotiations leave no alternative.

Bite the bullet and break the deadloc.

Ex is laughing his head off: he has a nice house to live in with his new partner; he has an ex the mortgage lender can chase for arrears; he's not paying rent to his ex for 'her share'; he'snot paying maintenance, and as long as he doesn't sell the Charging Order is of no concern.

Time to get tough!

theoretica

canaldumidi said:

Ex is laughing his head off: he has a nice house to live in with his new partner; he has an ex the mortgage lender can chase for arrears; he's not paying rent to his ex for 'her share'; he'snot paying maintenance, and as long as he doesn't sell the Charging Order is of no concern.

Time to get tough!

In other words, he continues to abuse her.  I wonder if any of the charities that are abuse experts can help?

london21

If the ex is not willing to co-operate you will have to get a lawyer/court involved. 

AdrianC

london21 said:

If the ex is not willing to corporate, you will have to get a lawyer/court involved. 

co-operate is a different word from corporate.

Section62

doodling said:

I agree that the phraseology is poor, but it is still valid.  A lender will not remove people from a mortgage because, bluntly it is not in their interest to do so.  Why only have one person to pursue for money when they can have two?  This is not a decision driven by the amount of equity but simply by the choice between doing nothing (two people on the hook) or increasing their risk (one person on the hook) - why would anyone take the second option?

I think you've overlooked the point that potentially two people could still be 'on the hook'. Just a different two people.  Was that an option explored?

The point remains though, that chasing someone to pay/having someone 'on the hook', only really matters to the lender if there is little equity in the property and there is a risk the debt won't be fully cleared (including costs and fees) at the end of a repossession process.

doodling said:

I think your argument is that the OP's partner should be considered as someone who if pressed would simply walk away from their legal responsibilities and not care about the consequent effects on their credit rating.  Most people at least attempt to meet their financial responsibilities and a good proportion of those who are not driven by conscience are driven by the potential effects on their own financial standing.

I don't "consider" the OP's partner in any particular way. That would be rather judgemental and there's no reason or sense in making assumptions about someone in the way you've implied I have.

What I am saying is that if you are in a position where you are financially stretched, paying the mortgage on someone else's home doesn't make much sense if that results in you becoming homeless or in serious financial difficulty yourself. Most people would protect the most important things first, then worry about an investment second.

Worrying about 'conscience' or your credit rating isn't always a great idea if the end result is penury.  Being financially linked to an ex in financial difficulties also isn't great in terms of credit rating, so removing that link (by fair means or foul) is likely to be highlighted as a priority by a legal advisor.

If/when the OP's partner gets legal advice there was a possibility they will be advised to consider/prepare for the need to enter into an IVA/Bankruptcy.  It is a 'standard' legal approach used to force the issue where one party is unwilling to agree to a settlement or to split assets and where there are debts and not much equity.  The fact the ex is already in an IVA and has further debts could bring the need for a strategy of that kind much closer.

However, the OP has now confirmed there is likely to be a reasonable amount of equity in the property, so other strategies are likely to be more appropriate.

(INAL)

doodling said:

No, that question never gets asked because the default position is the existing mortgage and a new mortgage stands or falls on its own merits, not by comparison to the status quo.

I have to disagree there.  I know of at least one case where a bank was persuaded to agree a remortgage in less than ideal circumstances, with a change of one individual on the mortgage, because they appreciated the person being removed was never going to contribute a penny towards the outstanding balance and the alternative arrangement offered a better prospect.

I can't comment on whether this was a unique thing, and I doubt mortgage companies make public the details of their lending decisions in individual cases of this nature so finding out wouldn't be easy.

I would guess though that the arguments used in the case I know of would be persuasive in a similar situation, and the kind of situation involved is not that rare.

doodling said:

To some extent I suspect the whole issue is moot.  The ex doesn't seem to want this settled (except perhaps on terms unacceptable to the OP's partner) so is unlikely to be pushing his current partner to take out a mortgage.  The only thing that will resolve this is either a change of heart by the ex or legal action by the OP's partner.  The fact that the ex has been subject to an IVA might mean that they themselves have little or no equity in the property at all - you can see why they wouldn't want to sell.

I agree.

The IVA is a serious complication to the situation.

Section62

freedo25 said:

...coinciding with the time he lost his family court battle. 

Was this relating to arrangements for the children they have together?

Did the property ownership issue not come up as part of that?

freedo25 said:

The partner is named as the MD of his new Ltd company. This is because he cannot act as a director any more and it's useful for hiding your true earnings from the HMRC and the CMS.

I'm not sure I understand this point - having a limited company doesn't really help hide true earnings from any organisation. Have I missed something?