Separated what happens to the house / contents? Settlement etc

Tea_biscuits

Hi all,

I apologise in advance for this post and the numerous questions!

Husband and I separated Dec 23, I left the family home and have been staying with relatives.  We have two children aged 20 & 23. 

We had been living in the family home since 2005 and husband got a mortgage to buy the house from the council in 2022 with substantial discount. (I am not on the mortgage or the deeds) but have filed an interest in the property with the Land registry. 

He hasn't decided what to do with the house (he says he doesn't want to stay there) and has made me an offer of £35k to buy me out. 

If it's sold back to the council now the discount has to be repaid, or he could wait 3 years and sell without having to pay the discount back (which he says he doesn't want to do) he also said he might rent it out. There is still a mortgage on the property, so he says if it's sold back to the Council, it's likely we'll walk away with nothing, so why offer me £35k?

He says if we can't agree between us and it goes to court the judge will order personal debts to paid off out of the proceeds from the sale? I am not sure if this is correct. 

I have asked him to have the house valued in today's market and send me the valuations and how he came to a figure of £35k. He tried to explain that his solicitor came up with this based on our earnings, our debts and the outstanding mortgage and the council discount, does this sound right?

Do I need to take into consideration the value of the contents in the family home and what I have spent starting again? We had a very small amount of savings in a joint savings account for the house if needed for an emergency and he transferred this straight to his personal account when I left.

Any advice would be much appreciated. 

Let me know if you need any more information. 

Thank you. 

Devongardener

You need proper legal advice before accepting anything, particularly as the house purchase is so recent.  If you had  savings in a joint account he is not entitled to transfer them into his sole account.    Ask to see his solicitor’s calculations in writing.  

If you are concerned about legal costs, many solicitors offer a free half hour for initial advice.

DullGreyGuy

The judge won't order personal debts to be paid off. 

Unless there is a compelling reason otherwise the starting point is that all marital assets and liabilities are to be divided equally between you. The court cannot move a debt from one person to another and so if there were no material assets but one party had more debt than the other then instead the court would order the one with lest debt split the difference. 

Ultimately this comes down to horse trading as some parties will rather one asset than another and so may rather pay cash than an asset. For example when working in pension we got tons of requests for valuations to split DB pensions but only about 10-20% actually ended up in a pension sharing order so either circa 85% of people are deciding that rather than half their pension they'd rather pay up the cash equivalent or, highly unlikely, they suddenly all stopped their divorce proceedings. 

You need to get proper legal advice, whilst solicitors do a free initial discussion dont expect too much out of this, they'll give you some basic non-specifics but its also their sales pitch to you. 

DE_612183

I guess you know how much is outstanding on the mortgage?

Have a look on rightmove - not just houses for sale but also sold prices to get a basic estimate of valuation.

As a starting point - everything is 50/50 - savings, house, pensions etc.

See what you come up with from there - have you actually filed for divorce yet?

Silvertabby

House and savings apart, do you each have pensions?  If so, then their cash equivalent values are also classed as marital assets.

Is he by any chance offering you this £35K as a clean break settlement - allowing him to walk away with much more in his pension(s) ?

gwynlas

Given house purchase so recent there is unlikely to be much equity accrued particularly as discount would need to be paid back. Would this amount to £70k of which he is offerring you half? Regardless of what he is saying at the moment it would seem stupid to sell and lose benefit of discount. Are your children still living at home/staying with dad?  If so you would all be needeing to set up elsewhere if house sold. Unless you have valuable furniture etc the contents of the house are just second hand goods and you could probably take your share of these which would save you a little but you might prefer to start afresh anyway.

MattMattMattUK

Tea_biscuits said:

We had been living in the family home since 2005 and husband got a mortgage to buy the house from the council in 2022 with substantial discount. (I am not on the mortgage or the deeds) but have filed an interest in the property with the Land registry. 

If it's sold back to the council now the discount has to be repaid, or he could wait 3 years and sell without having to pay the discount back (which he says he doesn't want to do) he also said he might rent it out. There is still a mortgage on the property, so he says if it's sold back to the Council, it's likely we'll walk away with nothing, so why offer me £35k?

He would have received a 47% discount on the purchase of the property, the amount needing to be repaid depends on how long you have owned it, as well as how much it has appreciated, the amount required to repay would potentially be fairly high, but there would still be equity left afterwards to split (provided no other debts have been applied to the house).

https://www.gov.uk/right-to-buy-buying-your-council-home/selling-your-home

Paying back your discount

You’ll have to pay back some or all of the discount you got if you sell your Right to Buy home within 5 years of buying it.

You’ll have to pay back all of the discount if you sell within the first year. After that, the total amount you pay back reduces to:

• 80% of the discount in the second year
• 60% of the discount in the third year
• 40% of the discount in the fourth year
• 20% of the discount in the fifth year

The amount you pay back depends on the value of your home when you sell it.

Tea_biscuits

DE_612183 said:

I guess you know how much is outstanding on the mortgage?

Have a look on rightmove - not just houses for sale but also sold prices to get a basic estimate of valuation.

As a starting point - everything is 50/50 - savings, house, pensions etc.

See what you come up with from there - have you actually filed for divorce yet?

There is £207k on the mortgage and there has been no mention of a divorce yet.....

Tea_biscuits

Silvertabby said:

House and savings apart, do you each have pensions?  If so, then their cash equivalent values are also classed as marital assets.

Is he by any chance offering you this £35K as a clean break settlement - allowing him to walk away with much more in his pension(s) ?

I don't think he has even thought about pensions, it's not been mentioned. 

Tea_biscuits

gwynlas said:

Given house purchase so recent there is unlikely to be much equity accrued particularly as discount would need to be paid back. Would this amount to £70k of which he is offerring you half? Regardless of what he is saying at the moment it would seem stupid to sell and lose benefit of discount. Are your children still living at home/staying with dad?  If so you would all be needeing to set up elsewhere if house sold. Unless you have valuable furniture etc the contents of the house are just second hand goods and you could probably take your share of these which would save you a little but you might prefer to start afresh anyway.

I don't think there is £7ok equity.  One child has moved into private rented accommodation and youngest is with Dad. I have left all the house contents and will be starting afresh. 

Tea_biscuits

MattMattMattUK said:

Tea_biscuits said:

We had been living in the family home since 2005 and husband got a mortgage to buy the house from the council in 2022 with substantial discount. (I am not on the mortgage or the deeds) but have filed an interest in the property with the Land registry. 

If it's sold back to the council now the discount has to be repaid, or he could wait 3 years and sell without having to pay the discount back (which he says he doesn't want to do) he also said he might rent it out. There is still a mortgage on the property, so he says if it's sold back to the Council, it's likely we'll walk away with nothing, so why offer me £35k?

He would have received a 47% discount on the purchase of the property, the amount needing to be repaid depends on how long you have owned it, as well as how much it has appreciated, the amount required to repay would potentially be fairly high, but there would still be equity left afterwards to split (provided no other debts have been applied to the house).

https://www.gov.uk/right-to-buy-buying-your-council-home/selling-your-home

Paying back your discount

You’ll have to pay back some or all of the discount you got if you sell your Right to Buy home within 5 years of buying it.

You’ll have to pay back all of the discount if you sell within the first year. After that, the total amount you pay back reduces to:

• 80% of the discount in the second year
• 60% of the discount in the third year
• 40% of the discount in the fourth year
• 20% of the discount in the fifth year

The amount you pay back depends on the value of your home when you sell it.

The council sold the house to him for £300k with an £84,600 discount. Current valuation is £380k. There are no debts applied to the house.