Partner contributing more when putting a deposit down on a house ?

getmore4less

The beneficial interest is what you effectively own and would get if you liquidate the asset .

It can't be 50% and some other value at the same time.

The deed would override the beneficial 50% by specifying something else. 

If the person with the bigger deposits want the bigger share they should carry the costs proportional to that share as they also get the increased reward when there is surplus fund.

All costs should be included in determining what those beneficial shares would be

By not including the costs that just benefits the bigger deposit even more

Using your example above let's use Person 1 with 50% deposit and Person 2 with 0% deposit.

So the house is sold for £140K which means person 1 gets £70k back (50%)
Person 2 get's 0% back as they put in no deposit
Then there is 20K left to split so there is 10K each
This means person 1 ends up with 60K and person 2 ends up with 10K. which is the exact amounts that they put into the house so it's fair.
.

Person 1 gets £80k 

using the same example costs(£10k to buy £10k to sell)

person 2 actually put in £5k up front to cover costs with a total of £20k all together but ends up £10k down

Where as person 1 puts in £55k up front and comes out £10k up on the deal


All because the costs are based on one beneficial interest where the returns are on the real beneficial interest.

 

Tokmon

getmore4less said:

The beneficial interest is what you effectively own and would get if you liquidate the asset .

It can't be 50% and some other value at the same time.

The deed would override the beneficial 50% by specifying something else. 

If that's how it works legally then fair enough the ownership will not have a set percentage each and it will change over time as the mortgage is paid off using my formula. But that doesn't change what the formula set's out to achieve.

If the person with the bigger deposits want the bigger share they should carry the costs proportional to that share as they also get the increased reward when there is surplus fund.

All costs should be included in determining what those beneficial shares would be

By not including the costs that just benefits the bigger deposit even more

Using your example above let's use Person 1 with 50% deposit and Person 2 with 0% deposit.

So the house is sold for £140K which means person 1 gets £70k back (50%)
Person 2 get's 0% back as they put in no deposit
Then there is 20K left to split so there is 10K each
This means person 1 ends up with 60K and person 2 ends up with 10K. which is the exact amounts that they put into the house so it's fair.
.

Person 1 gets £80k 

using the same example costs(£10k to buy £10k to sell)

person 2 actually put in £5k up front to cover costs with a total of £20k all together but ends up £10k down

Where as person 1 puts in £55k up front and comes out £10k up on the deal


All because the costs are based on one beneficial interest where the returns are on the real beneficial interest.

 

So like i said this is just a difference in opinion about what each of think is fair. If someone was buying with a friend then your points make sense. But when buying with a partner at the start of a relationship with the aim to merge finances completely in the future like most relationships due by marriage then i still maintain my way works best in this situation.

But my advice to you is to never get married if your so set against sharing assets with a partner.

19DENBO48

My partner and i are splitting up after only 18 months, we bought a house for £220k, she paid £103k towards the deposit i paid £35k the house Mortgage and deeds are both in my name only because her credit rating was and is bad, so im paying 100% of the mortgage + bills, we had a valuation done recently and its valued at £205k a drop of £15k, my ex says i will have to take 100% of the loss, i thought 50/50 would have been correct.  thanks...

Exodi

19DENBO48 said:

My partner and i are splitting up after only 18 months, we bought a house for £220k, she paid £103k towards the deposit i paid £35k the house Mortgage and deeds are both in my name only because her credit rating was and is bad, so im paying 100% of the mortgage + bills, we had a valuation done recently and its valued at £205k a drop of £15k, my ex says i will have to take 100% of the loss, i thought 50/50 would have been correct.  thanks...

(to be honest, you should have made a new thread instead of revive an old one)

I find it incredulous that the mortgage and deeds are in your sole name? So are you saying your partner filled out a gifted deposit declaration for £103k? That's absolutely bonkers. If that really is the case, she's probably not in the strongest position to make demands as you technically own everything.

Sorry, just typing this out for my use:

Original House Value: £220,000
Partner Deposit: £103,000
OP 2 Deposit: £35,000
Original Mortgage: £82,000

New House Value: £205,000.
Current Mortgage: £80,000*
*You didn't say what the mortgage balance is now, but after 18 months of payments I just guessed.

Unfortunately, this situation is not clear cut and subjective (as you can see from this thread).

Some may argue that at the point of purchase, your partner bought 46.8%-ish percent and you bought 53.2%-ish percent (including the mortgage). As you are the only one paying the mortgage, in my opinion this seems like a logical position. If we apply these percentages to the new house value, we get:

Partner Equity: £95,977.27 (-£7,022.73)
OP Equity: £109,022.73, or £29,022.73 after you pay off the mortgage. (-£5,977.27)

Some argue that regardless of equity, costs should be shouldered fairly, so might say that the loss of equity should be shared evenly.

Partner Equity: £96,500 (-£6,500)
OP Equity: £28,500 (-£6,500)

With all that said, I think there are very few people that will agree with your ex that you should shoulder 100% of the loss (especially without a Deed of Trust in place dictating such a thing).