Own Home - Joint Tenants - One sided purchase

Billyballs

Hi

I'm new to this forum and am looking for some info and a friend advised me to post on here before paying for legal advice

My wife and I purchased our home outright 5 years ago (before we were married). We bought outright with proceeds of a company sale which were all mine. We bought as joint tenants despite the funds being one sided. 

Fast forward 5 years and for various reasons, we are considering going our separate ways. Outside of the house, we have very little in the way of savings, so would likely need to sell the house. There would be enough for us each to take half and set ourselves up fairly comfortably in separate homes big enough for us and the kids etc.

That is the way I want things to go in an ideal world, but I was wondering if anyone can advise on whether there are any other circumstances that would be taken into consideration when dividing proceeds of a sale? For example, would a court rule that I should take more of the proceeds considering it was my money in the first place or is it as black and white as we own as joint tenants so each would get half regardless of individual investment?

Any info or if anyone has any expertise would be greatly appreciated.

Thank you

Billyballs

Also, in addition to this question, if I wanted to buy her out of the ownership, would I have to pay half or would a court rule that given the investment was 100% mine, I can buy her out for less?

Again, ideally I do not want to do that and would like everything to be 50/50 but when she says that I will have to pay half the property value to buy her out, is that actually accurate?

Exodi

A court wouldn't need to decide anything if you are amicable.

You two are free to negotiate a fair settlement between you both and would save tens of thousands in solicitors fees if you are able to.

One thing I would say since you specifically asked - there is virtually no chance any court would randomly gift the house, that you currently own as joint tenants. The starting point is typically 50/50 unless they need to skew one way in appreciation of children. It's more likely that if this ended up in a bitter court battle, you would end up with less than 50% of the house, not more.

Billyballs said:

Also, in addition to this question, if I wanted to buy her out of the ownership, would I have to pay half or would a court rule that given the investment was 100% mine, I can buy her out for less?

Again, ideally I do not want to do that and would like everything to be 50/50 but when she says that I will have to pay half the property value to buy her out, is that actually accurate?

Again, the court is never going to randomly rule that the house you jointly own is now 100% yours, so you need to get this out your head. You currently own as joint tenants and you entered into the purchase as joint tenants. Even if you didn't get married, you would still only be entitled to half because you purchased as joint tenants.

You need to have a sit down chat with her and decide what you both would be happy with, start here: https://www.gov.uk/money-property-when-relationship-ends

You should not immediately jump to court, that should be the last resort as no-one wins (except the solicitors). It would also greatly help negotiations if you abandon the thought process that you should own 100% of the house now you've broken up.

From what I've seen, judges give short shrift to people who decide after the break up that they were not happy with various financial arrangements... which is extremely common in bitter proceedings.

propertyrental

You mention kids - ages? Number? And where/with who will they live?

Billyballs

Appreciate your input. Thank you for taking the time to respond.

My outlook probably hasn't come across clearly in my post. I do not want to - or think I should in any way - get 100% of any sale proceeds if that's what we decide to do. I also fully understand that if I decide to stay put and wanted to buy her out (it's not a viable option financially for that to happen the other way around), technically at the moment I would have to meet the valuation she sets.

But my query was more that if it does turn bitter and we go down the court settlement route, would they purely look at the joint tenancy agreement as a blanket rule or do they take other circumstances into play such as who paid for the house, who has contributed more in the years we've lived here etc.

The basis of my point really comes from her stance of "if you want to buy me out it will cost you half" or "if we sell up, I'm owed half". I just want to know of that is the bottom line or if there is actually more to it than meets our naive eye

Billyballs

propertyrental said:

You mention kids - ages? Number? And where/with who will they live?

2 kids. Both under 10. We have agreed that each of us would get custody, split as equally as possible. There is no bitterness and neither of us wants to do anything to harm the other. The only place I see any source of disagreement or bitterness arising is from this house issue

Exodi

Billyballs said:

But my query was more that if it does turn bitter and we go down the court settlement route, would they purely look at the joint tenancy agreement as a blanket rule or do they take other circumstances into play such as who paid for the house, who has contributed more in the years we've lived here etc.

The basis of my point really comes from her stance of "if you want to buy me out it will cost you half" or "if we sell up, I'm owed half". I just want to know of that is the bottom line or if there is actually more to it than meets our naive eye

Don't worry, I understand why you ask.

In a 'short marriage' (generally less than 5 years) a court will seek to return you both to the position you were before you were married.

Otherwise, a court will seek to split the assets down the middle, unless they need to weight one side more heavily because of things like children.

Even if you could argue that yours was a short marriage (which it probably wouldn't be defined as) the position before you were married was as joint owners of the house, whereby you would have split the proceeds. I can't see any event where you end up with more than 50%.

The court will not get into the minutiae of who paid for what... and if I'm honest I think it winds them up when this sort of narrative gets spun as (typically) women bear the brunt of childcare responsibilities, and then get made out to look like they haven't contributed.

If her stance is "if you want to buy me out it will cost you half" then it sounds like she is realistic in her offer. If you weren't happy with her receiving an equal split of the property proceeds, you shouldn't have held the house as joint tenants or got married.

Voyager2002

Billyballs said:

Appreciate your input. Thank you for taking the time to respond.

My outlook probably hasn't come across clearly in my post. I do not want to - or think I should in any way - get 100% of any sale proceeds if that's what we decide to do. I also fully understand that if I decide to stay put and wanted to buy her out (it's not a viable option financially for that to happen the other way around), technically at the moment I would have to meet the valuation she sets.

But my query was more that if it does turn bitter and we go down the court settlement route, would they purely look at the joint tenancy agreement as a blanket rule or do they take other circumstances into play such as who paid for the house, who has contributed more in the years we've lived here etc.

The basis of my point really comes from her stance of "if you want to buy me out it will cost you half" or "if we sell up, I'm owed half". I just want to know of that is the bottom line or if there is actually more to it than meets our naive eye

As I understand the law, her stance is correct.

Factors that could modify this: firstly, a court would be concerned for the welfare of the children, and might make arrangements for the house so that the children would continue to have a home until they reach maturity.

Secondly, if it could be demonstrated that one partner had made a far greater contribution to supporting the family than the other (after marriage), that is something that a court would consider (remember that the work of childcare is regarded as being just as important as earning money).

As others have said, an amicable settlement would be far better than allowing a court to decide, and from what you have said it is probable that a court would award you less than the straight 50 per cent that is currently on the table.

Exodi

One other thing, this probably belongs under the Life & Family > Marriage, relationships & families board instead of housing, asked a mod to move.

400ixl

You also need to consider all of the assets between you. House, savings, pensions etc.

Ideally you would both come out the other side happy with what you have taken and given up as part of the split.

Finally, you should always then see it through to a Financial Consent Order.

Albermarle

A court wouldn't need to decide anything if you are amicable.
You two are free to negotiate a fair settlement between you both and would save tens of thousands in solicitors fees if you are able to.

As the previous poster says, I thought it was better to get a legal agreement on finances, as that stops the possibility of further arguments down the line about exactly what was agreed etc.?

Also many people are very poor at understanding financial matters, so it would be in their best interest to have solicitors negotiating an agreement on their behalf, even if the situation was reasonably amicable.

Having solicitors involved obviously would have costs, but does not necessarily mean a huge and expensive courtroom battle.