Selling house what’s fair?

Andlam

pinkshoes said:

Andlam said:

But the person still living in the house has essentially lived there rent and mortgage free then for those months? While the other person has had their own housing costs to pay? 

In which case you should move back in!

Let her know that you have been more than generous allowing her to pay only the interest on the mortgage rather than the full rental value for the property, so say that unless ALL arrears are paid off within 28 days, you will be moving back into the property on 01 April 2023 so you can afford to pay the mortgage and will remain in the house until it is sold. 

I think her husband would beat me to a pulp 🤣 also can’t they get a possession order? 

MattMattMattUK

Andlam said:

pinkshoes said:

Andlam said:

But the person still living in the house has essentially lived there rent and mortgage free then for those months? While the other person has had their own housing costs to pay? 

In which case you should move back in!

Let her know that you have been more than generous allowing her to pay only the interest on the mortgage rather than the full rental value for the property, so say that unless ALL arrears are paid off within 28 days, you will be moving back into the property on 01 April 2023 so you can afford to pay the mortgage and will remain in the house until it is sold. 

I think her husband would beat me to a pulp 🤣 

Then he will have somewhere else to stay, at His Majesty's Pleasure.

Andlam said:
also can’t they get a possession order? 

Nope, you own half.

tightauldgit

Scorpio33 said:

Andlam said:

Scorpio33 said:

If you were going to split the house equity 50/50, then you are both 50/50 liable for the arrears in my opinion. 

But the person still living in the house has essentially lived there rent and mortgage free then for those months? While the other person has had their own housing costs to pay? 

Well if you jointly own the house, then you are jointly liable for its costs. Equally, you would jointly benefit from any increase in the price that creates equity.

In theory, if you were splitting things 50/50, then in effect she would pay her "half" of the mortgage, and pay you rent on the other half. She hasn't being paying her half, but you would both suffer as a result, not just her.

Look at it another way. If she was genuinely in financial distress and couldn't afford to pay the mortgage, and you had a large equity in it, it would be in your interests to pay the mortgage whilst it is being sold: that way you can sell it for a decent price (without it being reposessed), maximise your equity out of the house and any excess that you have paid can be taken out of the sale proceeds.

I can see why you feel its not fair, but you have two options as I see it:

1) Pay the mortgage (if you can afford to) whilst its being sold and take your costs out of the final sale price.
2) Write off the house in its entirety, allow it to be reposessed effecting your credit file.


Unfortunately, you can't control what your ex does, you can only react to what the situation is.

Also, try and ignore the fact that she is your ex. Think of it as a business deal: you both own the house, they are not going to pay their share, what are you going to do?

If you do decide to pay the mortgage as per 1) then I don't think you can recoup your costs out of the final sale price. I don't think that's how it works. Just as they wouldn't be able to recoup their mortgage payments that they have made before the sale. Your agreement with the mortgage company to pay the bills and the ownership of the equity in the property are two separate things. 

It might still make sense to do it, but you won't get your money back. 

tightauldgit

Andlam said:

getmore4less said:

Don't forget to work out your CGT liability.

I have been thinking about this, I’m so shocked that this is a thing because I’ve not been able to buy. I wish I’d never let her stay there. Once it’s sold we are both in the same position and could both put a deposit down but I get penalised even though I’ve been forced to rent a room in a shared house all these years! I did read that the rules are Changing in April  and that may affect my situation but I don’t understand it all 

I'm not sure I understand your point here - in what way are you being penalised? 

You had an investment in a property that has gained value. If tax is due then tax is due. It will be the same for both of you.

Andlam

tightauldgit said:

Andlam said:

getmore4less said:

Don't forget to work out your CGT liability.

I have been thinking about this, I’m so shocked that this is a thing because I’ve not been able to buy. I wish I’d never let her stay there. Once it’s sold we are both in the same position and could both put a deposit down but I get penalised even though I’ve been forced to rent a room in a shared house all these years! I did read that the rules are Changing in April  and that may affect my situation but I don’t understand it all 

I'm not sure I understand your point here - in what way are you being penalised? 

You had an investment in a property that has gained value. If tax is due then tax is due. It will be the same for both of you.

She won’t pay CGT as she’s been living in the house so when it’s sold she won’t be liable? 

JReacher1

Andlam said:

Scorpio33 said:

Andlam said:

Scorpio33 said:

If you were going to split the house equity 50/50, then you are both 50/50 liable for the arrears in my opinion. 

But the person still living in the house has essentially lived there rent and mortgage free then for those months? While the other person has had their own housing costs to pay? 

Well if you jointly own the house, then you are jointly liable for its costs. Equally, you would jointly benefit from any increase in the price that creates equity.

In theory, if you were splitting things 50/50, then in effect she would pay her "half" of the mortgage, and pay you rent on the other half. She hasn't being paying her half, but you would both suffer as a result, not just her.

Look at it another way. If she was genuinely in financial distress and couldn't afford to pay the mortgage, and you had a large equity in it, it would be in your interests to pay the mortgage whilst it is being sold: that way you can sell it for a decent price (without it being reposessed), maximise your equity out of the house and any excess that you have paid can be taken out of the sale proceeds.

I can see why you feel its not fair, but you have two options as I see it:

1) Pay the mortgage (if you can afford to) whilst its being sold and take your costs out of the final sale price.
2) Write off the house in its entirety, allow it to be reposessed effecting your credit file.


Unfortunately, you can't control what your ex does, you can only react to what the situation is.

Also, try and ignore the fact that she is your ex. Think of it as a business deal: you both own the house, they are not going to pay their share, what are you going to do?

Thanks, some good points to ponder over. I wouldn’t mind paying if I can re coup it, she can afford it but wants to
save as much as she can for a deposit on a new place so I’ll see what we can work out! 

She’s not going to be accepted for a mortgage on a new place if her credit history is trashed from not paying her current mortgage. 

Andlam

JReacher1 said:

Andlam said:

Scorpio33 said:

Andlam said:

Scorpio33 said:

If you were going to split the house equity 50/50, then you are both 50/50 liable for the arrears in my opinion. 

But the person still living in the house has essentially lived there rent and mortgage free then for those months? While the other person has had their own housing costs to pay? 

Well if you jointly own the house, then you are jointly liable for its costs. Equally, you would jointly benefit from any increase in the price that creates equity.

In theory, if you were splitting things 50/50, then in effect she would pay her "half" of the mortgage, and pay you rent on the other half. She hasn't being paying her half, but you would both suffer as a result, not just her.

Look at it another way. If she was genuinely in financial distress and couldn't afford to pay the mortgage, and you had a large equity in it, it would be in your interests to pay the mortgage whilst it is being sold: that way you can sell it for a decent price (without it being reposessed), maximise your equity out of the house and any excess that you have paid can be taken out of the sale proceeds.

I can see why you feel its not fair, but you have two options as I see it:

1) Pay the mortgage (if you can afford to) whilst its being sold and take your costs out of the final sale price.
2) Write off the house in its entirety, allow it to be reposessed effecting your credit file.


Unfortunately, you can't control what your ex does, you can only react to what the situation is.

Also, try and ignore the fact that she is your ex. Think of it as a business deal: you both own the house, they are not going to pay their share, what are you going to do?

Thanks, some good points to ponder over. I wouldn’t mind paying if I can re coup it, she can afford it but wants to
save as much as she can for a deposit on a new place so I’ll see what we can work out! 

She’s not going to be accepted for a mortgage on a new place if her credit history is trashed from not paying her current mortgage. 

No I wondered if her husband may apply though. Either way not really my business but just thinking out loud! 

theoretica

I have a vague memory of a CGT exemption following divorce if children are living in the house.  Worth checking.

Andlam

theoretica said:

I have a vague memory of a CGT exemption following divorce if children are living in the house.  Worth checking.

Thank you I will look into that. I did read that there were some changes in April but I didn’t really understand it 

_Penny_Dreadful

theoretica said:

I have a vague memory of a CGT exemption following divorce if children are living in the house.  Worth checking.

There would need to be a Mesher Order in place and I’m guessing there isn’t one in this scenario.