Buying out a partner

Noneforit999

NicolaEv said:

We are joint tenants, I initially worked out our contribution and applied that percentage to the new equity figure which would mean he would have the capital he has put in to the property and an extra £2k. 

I realise I should have obtained a deed of trust but we spoke about this and he made it clear we would do whatever was best for me and the children as it was our money that meant he was able to own property in the first place. 

We have seen an unprecedented rise in house prices, normally if a relationship broke down after a year I think most partners would just leave, if they insisted on being bought out a house would generally increase by a few thousand in 12 months not £35k so it just seems like an abnormal situation to me that perhaps shouldn’t be treated the same as other buy outs. 

What he told you and what he is entitled to financially are not the same thing as you are finding out now. 

The reality is you didn't get a deed of trust so your statements about unprecedented times are irrelevant.

I am not trying to sound harsh here but as an impartial party, he is entitled legally to at least 50% of the equity in the house. You could go back and forth about this but he will just refuse to sell until its agreed he gets what he is legally entitled to. If you try to force the sale via a court process, he is going to get the money anyway. Just offer him 50% of the equity and move on. 

Can you afford to buy him out in terms of paying the mortgage on your own? Affordability wise your lender will need to ensure you can pay the mortgage on your own without his income. 

Section62

Noneforit999 said:

Just offer him 50% of the equity and move on. 

The OP needs to speak to a professional solicitor before doing anything else.

Just agreeing a sum of money and paying it to him won't necessarily be enough.  What if he refuses to move out after that?

If he's unwilling to go now - despite the tensions two children are being exposed to - then there is no guarantee he will go when he's got the money.

The OP should seek advice firstly on how to get him out of the house, secondly how to ensure a fair division of the assets.  Above all, the children need to be protected from a damaging situation.

Schwarzwald

NicolaEv said:

I bought a house with my partner in March 21, he’s a lot younger than me so didn’t have a deposit. I have 2 children and owned my own property so when I sold my house I paid the deposit on our new house. We agreed that we would have 50/50 ownership after my deposit was taken out(though nothing in writing). 

The relationship broke down a while ago and he’s become unbearable to live with. I’ve worked out his ownership with the capital he has put into the house from mortgage payments and offered him his actual ownership at the new value based on this percentage (around £6k). As house prices have sky rocketed our property has increased in value by £35k since we bought it. My ex partner is saying he won’t leave the house unless I give him 50% of the equity in the house after I’ve taken my deposit out so around £18k. This seems ridiculous when he’s only contributed £4k of capital. I know I can refuse to give him that and we would have to go to court but is it worth that or would I end up paying the same in court fees that I would to buy him out and is it likely I would win? 

He’s now saying he might not even accept the £18k and if we go down the court route he will come after my deposit as well as he shouldn’t be expected to pay any fees as he doesn’t want to leave. I’ve been told unless he can prove he has contributed to that he won’t be able to get hold of my deposit. 

You seem to have agreed to a ridiculous good deal for him at the time which has now resulted in a ridiculous bad outcome for you as you didnt seek proper protection of your interests in writing.
did you at least agree treating the deposit as yours in writing? Or could he claim seriously his share in the property is a straight 50/50 after deducting solely the mortgage?

overall sounds like the right time to get a solicitor/lawyer involved to work it out.

markin

He's made 17K I'm sure he wants another year to get a big deposit or a BMW.

If he moves out can he afford the mortgage +Rent, +Child support, presuming their his.

RogerBareford

NicolaEv said:

We are joint tenants, I initially worked out our contribution and applied that percentage to the new equity figure which would mean he would have the capital he has put in to the property and an extra £2k. 

I realise I should have obtained a deed of trust but we spoke about this and he made it clear we would do whatever was best for me and the children as it was our money that meant he was able to own property in the first place. 

We have seen an unprecedented rise in house prices, normally if a relationship broke down after a year I think most partners would just leave, if they insisted on being bought out a house would generally increase by a few thousand in 12 months not £35k so it just seems like an abnormal situation to me that perhaps shouldn’t be treated the same as other buy outs. 

The best thing you both could have done for you and the children at the time was to have a proper legal agreement written up detailing exactly what will happen in this situation so you are both protected.

Anyone who really cares about being fair would have insisted on this being done properly at the time.

Also i don't think most people would just walk away from a house they own after a year if a relationship broken down as it would be pretty silly to continue to own a property with an ex partner.

TBagpuss

diystarter7 said:

RogerBareford said:

diystarter7 said:

tightauldgit said:

From what you've written it seems like you are saying you will give him back what he has put in and he is saying he wants his share of the actual equity? 

If so I have to say I agree with him. If the value of his investment has grown over time then he's entitled to benefit from that growth, not just to receive back what he put in.

Maybe I'm misunderstanding your OP though

So sad to read so many threads like this, sorry about your situ OP

I agree with the above post and that's how I've read your post.

Sadly, I have to agree with the above post but if I was a judge and it went to court, I'd agree with you.

Don't feel sorry for the OP they could have got a deed of trust to document exactly what would happen in the event of a sale, they could have even owned different percentages of the property.

They have chosen not to do this so they are both entitled to 50% of the property.

Thanks. To be clear, I've read o various site that agreements of that and similar are worthless if you've been together for more than a couple of years.

Not really. It can get quite complicated but :
- If you are NOT married, then a propertly drawn up declaration of trust is extrmely strong evidenceand very hard to sucessfully argue against.
- A court has to look at what your joint intentions were. A written agreement is strong evidece f joint agrement but a court CAN hear and take into account other evidence, such as subequent agreements even if they were made verbally, or evidence of an agreement where there was no wrotten agreement, such as in OPs case. However, in the basned f anything on paper it is typically one persn's word against the other, lthoguh other evidnce, such as bank statements can be relvant. 

IF you are married (or get married after buying the hosue) then any prior agreement has a lot less weight and the Judge has much more discretirion, as they get to decide what they considerwould be a fair outcome, rather than simply determining what was agreed or intended between the two of you.

Broadly speaking, a written agreement (IF property drawn up) is not 100% cast iron but is very dignificantly better tha having nothhing or having just a verbakl agreement. 

OP - you said that you had nothing in writing but agreed that you'd get your deposit back and would then split that balnce. It sounds as though that is exactly what your ex is saying he will settle for. SInce there's nothing in writing, if you can't agree then you would risk his claiming 50% of the equity so while I'd sugges tthart you talk to a solicitor with experience of ToLATA cases, it soundsas though your best bet is likely to be to agree to pay him 50% of the equity after your deposit is deducted. It would however be normal to take off the notional costs of sale when working out the equity - e.g. what it would cost in solicitros and estate agents fees, if you were selling the house, and to include any ERC in the mortgage redemption figure , as that ensures that the amunt he is paid is what he would get, ifthe house were to be sold. While you won't be paying all of those fees up front, you will have to pay them eventually whenyou sell.

NicolaEv

We are not married and they are not his children. when I said after a year most people would just leave, I mean they would either sign the house over to the other party because a years worth of mortgage payments would be around what they would pay in rent for having lived in a property for that period. Or they would be happy to leave with what they put in. When relationships break down usually both people want to move on with their life but he would live unhappily in this house for the money he’d get at the end of it. 

He had no savings and wouldn’t have been able to buy a property. 

He has also said that if I want to sell the house and we divvy up the proceeds that way I have to pay to have the house painted, wood floor restored and any solicitor and estate agent fees because it’s me that wants to sell not him. 

At the moment I feel like the only option I have is to continue to live with him. I chose this house because it was close to my childrens  school and that helps me with work so if I could stick it out another 5 years I could then think about selling and moving elsewhere. 

I think I can afford to buy him out at £17k and pay the mortgage myself with a friend who is interested in investing for a percentage (which would be well documented). I was just looking for someone who may have been in this situation to say whether the fight is or isn’t worth it. As I’ve said I’ve had some legal advice and what they’ve said was promising but it would be a long and costly process that I’m not sure is worth it. 

Thanks everyone for your comments.

secla

If hes on the mortgage he cant just sign it over to you, You will need to get a mortgage on your own as the one you have is taking into account both your incomes, Will your income alone pass affordability on the total value ?

If you wait 5 years a value of house could increase which means your would owe him even more equity

Noneforit999

NicolaEv said:

We are not married and they are not his children. when I said after a year most people would just leave, I mean they would either sign the house over to the other party because a years worth of mortgage payments would be around what they would pay in rent for having lived in a property for that period. Or they would be happy to leave with what they put in. When relationships break down usually both people want to move on with their life but he would live unhappily in this house for the money he’d get at the end of it. 

He had no savings and wouldn’t have been able to buy a property. 

He has also said that if I want to sell the house and we divvy up the proceeds that way I have to pay to have the house painted, wood floor restored and any solicitor and estate agent fees because it’s me that wants to sell not him. 

At the moment I feel like the only option I have is to continue to live with him. I chose this house because it was close to my childrens  school and that helps me with work so if I could stick it out another 5 years I could then think about selling and moving elsewhere. 

I think I can afford to buy him out at £17k and pay the mortgage myself with a friend who is interested in investing for a percentage (which would be well documented). I was just looking for someone who may have been in this situation to say whether the fight is or isn’t worth it. As I’ve said I’ve had some legal advice and what they’ve said was promising but it would be a long and costly process that I’m not sure is worth it. 

Thanks everyone for your comments.

I'm sorry but I think you are being unfair here.

You put the full deposit in and he put none which I understand but you then took a mortgage out together so he is liable for the mortgage payments just as much as you and he then owns 50% of that house. 

What you are suggesting is that because he didn't actually put any deposit in, he should not benefit from the increase in value of the house? I disagree, I don't know the full situation but from what you have said, he is entitled (quite rightly) to 50% of the increase in value.

You seem to want your cake and to eat it too. Could you have afforded the full mortgage on your own? Would a lender have lent you enough back then? 

You are suggesting that he was just a convenient way of helping you make half the mortgage payments but he should have no actual stake in the house, which is ludicrous. 

My Wife and I own our house together and I put in 80% of the deposit, simply because I had more savings at the time. We were not married and only together for 18 months so it was a risk on my part. If our marriage broke down, she would get 50% of the value of the house, I don't even care about the fact I put in at the start. I also earn 4x what she does so technically I am paying more of the mortgage than her each month but again, that is irrelevant in terms of what she is entitled to.

Section62

Noneforit999 said:

NicolaEv said:

We are not married and they are not his children. when I said after a year most people would just leave, I mean they would either sign the house over to the other party because a years worth of mortgage payments would be around what they would pay in rent for having lived in a property for that period. Or they would be happy to leave with what they put in. When relationships break down usually both people want to move on with their life but he would live unhappily in this house for the money he’d get at the end of it. 

He had no savings and wouldn’t have been able to buy a property. 

He has also said that if I want to sell the house and we divvy up the proceeds that way I have to pay to have the house painted, wood floor restored and any solicitor and estate agent fees because it’s me that wants to sell not him. 

At the moment I feel like the only option I have is to continue to live with him. I chose this house because it was close to my childrens  school and that helps me with work so if I could stick it out another 5 years I could then think about selling and moving elsewhere. 

I think I can afford to buy him out at £17k and pay the mortgage myself with a friend who is interested in investing for a percentage (which would be well documented). I was just looking for someone who may have been in this situation to say whether the fight is or isn’t worth it. As I’ve said I’ve had some legal advice and what they’ve said was promising but it would be a long and costly process that I’m not sure is worth it. 

Thanks everyone for your comments.

I'm sorry but I think you are being unfair here.

You put the full deposit in and he put none which I understand but you then took a mortgage out together so he is liable for the mortgage payments just as much as you and he then owns 50% of that house. 

What you are suggesting is that because he didn't actually put any deposit in, he should not benefit from the increase in value of the house? I disagree, I don't know the full situation but from what you have said, he is entitled (quite rightly) to 50% of the increase in value.

You seem to want your cake and to eat it too. Could you have afforded the full mortgage on your own? Would a lender have lent you enough back then? 

You are suggesting that he was just a convenient way of helping you make half the mortgage payments but he should have no actual stake in the house, which is ludicrous. 

My Wife and I own our house together and I put in 80% of the deposit, simply because I had more savings at the time. We were not married and only together for 18 months so it was a risk on my part. If our marriage broke down, she would get 50% of the value of the house, I don't even care about the fact I put in at the start. I also earn 4x what she does so technically I am paying more of the mortgage than her each month but again, that is irrelevant in terms of what she is entitled to.

I feel you aren't being fair either, and approaching the OP's problem from the ex's position, not with a balanced view.

What you and your wife chose to do isn't relevant, that was a personal view you both took.  It also isn't true that she would (automatically) get 50% of the value of the house if you divorce, unless that is what you agree between you.

In terms of the ex's entitlement, you've glossed over the point that the ex is saying he should get half the equity without having to pay for any of the work needing to be done to the hosue, nor paying any of the sale fees. That isn't a legally tenable position.

You've also determined that the ex should get 50% of the equity increase, effectively because he's 'invested' in the mortgage in terms of a 'liability' to pay it.  That ignores the arguable financial position that the equity increase should be divided between the deposit element and the mortgage element - in other words that the OP should receive 100% of the gain on their deposit investment, and 50% of the gain on the total mortgage investment, assuming of course there has been some equality in terms of who paid the mortgage.

This is a complicated situation, and above all the OP needs to protect their children's home.  They need advice from a good solicitor specialising in cases of this type, not opinions of laypeople approaching the issue from a moral perspective.  What matters is how a court would approach this question if the OP went down a legal route - from that starting point the best strategy will flow.