No declaration of trust/equity split with ex

Mortgage_99

BarelySentientAI said:

Mortgage_99 said:

BarelySentientAI said:

Mortgage_99 said:

BarelySentientAI said:

It might sound harsh, and it's probably your frustration, but it sounds a lot like you're letting personal anger and a desire to 'spite' your ex write this post rather than logic.  Unfortunately, the precedents for married couples don't apply to cohabitation.

You can't say "I get more because I'm not getting rent for my half" whilst also not paying any of the mortgage.  Plus even when co-habiting, you weren't contributing half either.  Those sort of things work well when skies are blue, but verbal ad-hoc arrangements don't last through strife.

Immoral of your ex to gain by paying the whole mortgage?  Interesting definition of immoral.

Also deciding now that you're not going to be bought out in two years?  Any logic to that other than wanting to keep the animosity going into the future?

I wonder what the reaction would be to this post the other way around - "I paid more than half of the mortgage, then my ex moved out and left me with the whole payment, and now they're claiming they deserve an 'equal' split"?

I fear you're going to stop yourself being happy with whatever resolution comes out of this.

What ownership did you declare on the initial purchase?  Were there specified percentages, some sort of deed to define proportions, etc?

I understand what you are saying. 

But look at it from it from this point of view. I didn’t just “leave” her to pay the mortgage on her own. I wanted to stay and agreed I’d pay it by myself….the ex wanted to stay and pay. We couldn’t live together at all, so one person had to leave so I decided it would be myself. It’s not like it was done by choice…of course I wouldn’t want to lose out on equity. 

The property is under help to buy, there was discussions to rent it out but we quickly came to the realisation that’s not possible with HTB unless a lodger comes in. 

So now…50% of a property of which I own, which the ex now is living in…surely I would be entitled to rental payments for my 50% which are obviously not being paid…and obviously the ex would say “but I’m paying the whole mortgage” then that should cancel itself out no?

the ownership at the outset was 50/50, no declaration of trust. Owned as tenants in common. 

So my point here is, I am paying rent…when theoretically I could be receiving rental payments if I rented half my property to cover my rental payments elsewhere. Why do I stand to lose out on 2 years binning money paid to rent elsewhere, then at the end of it the ex just gets to keep full equity of the property which is still mine. 

Of course I see your point of view - these are all the difficult things about unmarried house purchases without some sort of documented agreement for 'what if things go wrong?'  You're not the first, and won't be the last, to come here with questions like this and there are often no good answers, you just end up with the least worst.

Similarly, you're still saying you own 50%.  Up to the point of you moving out, they had paid more than you for the house.  You can see an argument for it not actually being 50/50, even if we ignore what's happening now.

And I don't get that last paragraph at all - nobody is saying that you would get nothing at all when it sells.  For 2 years, they are paying mortgage, you are paying rent, both are still owners.  Where does "just gets to keep full equity" come from?

The others make good points too.  You seem to have an expectation that there is going to be a big chunk of money to split because prices are going to rocket.  That's a long way from being certain or even likely.  You're in negative equity now, so what you're arguing about is whether you keep a 50% share of the extra debt!  There was even one poster recently on here who was asking "how can I take myself off the deeds and mortgage of the house I bought with my ex?".

Probably, and I'm no lawyer, one of two things is likely to be considered an equitable outcome, and each party will think one is fair and one is unfair.  Both have been done in the past.  Either a 50-50 split on eventual sale (best for you) or a split based on initial equity + percentage of mortgage payments (worst for you).

50/50 split is the default presumption for TIC I think, but that doesn't mean its the only outcome.

The advice normally given on here to people thinking of buying with a partner is to agree these things in a legal document up front - of course most don't do that because everyone goes in with the best intentions.

But surely, as there was no declaration of trust, and it clearly states 50/50 ownership by law that cannot just suddenly be changed because of circumstances. Shouldn’t be 50/50 by default unless there is a declaration of trust stating otherwise. 

In many relationships, mortgage payments etc are rarely straight 50/50 as it is highly likely someone will pay more…but make up in other areas which are not detailed financially. But of course, once a break up is now occurring people love to suddenly change their stance and make it look worse than it is. 

Take an absurd example then.  Assume no declaration of trust and no stated percentages on the original transfer.

A couple bought a £1million house on a 95% mortgage, but put  £25k in equally as deposit.

One month later, one of them moves out, into another property they already owned independently, and stops contributing.  The other remains in the house and pays the full mortgage.

They don't agree to sell the house until the mortgage has been completely paid off.

Do you think they should split the house £500k each?

If not, then you're accepting circumstances can change the balance, and the argument is whether they should in your case and by how much.

Unless you have specified 50/50 - and many people don't - then it's not "clearly stated by law", it's a starting presumption.  I personally think 50/50 is right in your situation, but it's not my decision.

You're slipping back into the emotional wording again too, "people love to suddenly change their stance".  That won't help you work it through.

In the above example you’ve given, then surely they’d want to sell/ the one staying in the property would force a sale rather than staying tied up?

And I would say yes, in that time the one in the house has paid 500k in the property, the other person has theoretically lost 500k paying in rent! Which could have been going on the property…on top of not having access to their house and unable to get a mortgage elsewhere themselves. So having originally bought the investment together, why would one person stand to gain 500k and be able to move and buy somewhere whilst the other starts with 0. 

In my situation, it was an agreement between both of us that would be the case until it’s back in equity. This property was bought for 345k about 1.8 years ago, it was valued at 325k a couple months ago. After interest, 10k has been paid down at the moment in those 1.5 years and I have predicted another 10-15k to pay down the mortgage over the next 2 years. So that’s about 25k paid on the property after interest has been subtracted. I understand in the early years it’s mostly interest being paid rather than the actual capital. That means if the prices stayed the same as current original deposits would be returned and it sold at the current valuation of 325k. But prices are highly unlikely to stay the same (as per savills prediction). My issue is if the property price was to increase by 20-30-40k then now I have a case for my 50%. 

I recall signing the document with solicitors when originally buying stating our percentages of 50% and on the same form choosing if we wanted tenants in common or joint tenants and that is when we chose tenants in common. 

BarelySentientAI

Mortgage_99 said:

BarelySentientAI said:

Mortgage_99 said:

BarelySentientAI said:

Mortgage_99 said:

BarelySentientAI said:

It might sound harsh, and it's probably your frustration, but it sounds a lot like you're letting personal anger and a desire to 'spite' your ex write this post rather than logic.  Unfortunately, the precedents for married couples don't apply to cohabitation.

You can't say "I get more because I'm not getting rent for my half" whilst also not paying any of the mortgage.  Plus even when co-habiting, you weren't contributing half either.  Those sort of things work well when skies are blue, but verbal ad-hoc arrangements don't last through strife.

Immoral of your ex to gain by paying the whole mortgage?  Interesting definition of immoral.

Also deciding now that you're not going to be bought out in two years?  Any logic to that other than wanting to keep the animosity going into the future?

I wonder what the reaction would be to this post the other way around - "I paid more than half of the mortgage, then my ex moved out and left me with the whole payment, and now they're claiming they deserve an 'equal' split"?

I fear you're going to stop yourself being happy with whatever resolution comes out of this.

What ownership did you declare on the initial purchase?  Were there specified percentages, some sort of deed to define proportions, etc?

I understand what you are saying. 

But look at it from it from this point of view. I didn’t just “leave” her to pay the mortgage on her own. I wanted to stay and agreed I’d pay it by myself….the ex wanted to stay and pay. We couldn’t live together at all, so one person had to leave so I decided it would be myself. It’s not like it was done by choice…of course I wouldn’t want to lose out on equity. 

The property is under help to buy, there was discussions to rent it out but we quickly came to the realisation that’s not possible with HTB unless a lodger comes in. 

So now…50% of a property of which I own, which the ex now is living in…surely I would be entitled to rental payments for my 50% which are obviously not being paid…and obviously the ex would say “but I’m paying the whole mortgage” then that should cancel itself out no?

the ownership at the outset was 50/50, no declaration of trust. Owned as tenants in common. 

So my point here is, I am paying rent…when theoretically I could be receiving rental payments if I rented half my property to cover my rental payments elsewhere. Why do I stand to lose out on 2 years binning money paid to rent elsewhere, then at the end of it the ex just gets to keep full equity of the property which is still mine. 

Of course I see your point of view - these are all the difficult things about unmarried house purchases without some sort of documented agreement for 'what if things go wrong?'  You're not the first, and won't be the last, to come here with questions like this and there are often no good answers, you just end up with the least worst.

Similarly, you're still saying you own 50%.  Up to the point of you moving out, they had paid more than you for the house.  You can see an argument for it not actually being 50/50, even if we ignore what's happening now.

And I don't get that last paragraph at all - nobody is saying that you would get nothing at all when it sells.  For 2 years, they are paying mortgage, you are paying rent, both are still owners.  Where does "just gets to keep full equity" come from?

The others make good points too.  You seem to have an expectation that there is going to be a big chunk of money to split because prices are going to rocket.  That's a long way from being certain or even likely.  You're in negative equity now, so what you're arguing about is whether you keep a 50% share of the extra debt!  There was even one poster recently on here who was asking "how can I take myself off the deeds and mortgage of the house I bought with my ex?".

Probably, and I'm no lawyer, one of two things is likely to be considered an equitable outcome, and each party will think one is fair and one is unfair.  Both have been done in the past.  Either a 50-50 split on eventual sale (best for you) or a split based on initial equity + percentage of mortgage payments (worst for you).

50/50 split is the default presumption for TIC I think, but that doesn't mean its the only outcome.

The advice normally given on here to people thinking of buying with a partner is to agree these things in a legal document up front - of course most don't do that because everyone goes in with the best intentions.

But surely, as there was no declaration of trust, and it clearly states 50/50 ownership by law that cannot just suddenly be changed because of circumstances. Shouldn’t be 50/50 by default unless there is a declaration of trust stating otherwise. 

In many relationships, mortgage payments etc are rarely straight 50/50 as it is highly likely someone will pay more…but make up in other areas which are not detailed financially. But of course, once a break up is now occurring people love to suddenly change their stance and make it look worse than it is. 

Take an absurd example then.  Assume no declaration of trust and no stated percentages on the original transfer.

A couple bought a £1million house on a 95% mortgage, but put  £25k in equally as deposit.

One month later, one of them moves out, into another property they already owned independently, and stops contributing.  The other remains in the house and pays the full mortgage.

They don't agree to sell the house until the mortgage has been completely paid off.

Do you think they should split the house £500k each?

If not, then you're accepting circumstances can change the balance, and the argument is whether they should in your case and by how much.

Unless you have specified 50/50 - and many people don't - then it's not "clearly stated by law", it's a starting presumption.  I personally think 50/50 is right in your situation, but it's not my decision.

You're slipping back into the emotional wording again too, "people love to suddenly change their stance".  That won't help you work it through.

In the above example you’ve given, then surely they’d want to sell/ the one staying in the property would force a sale rather than staying tied up?

And I would say yes, in that time the one in the house has paid 500k in the property, the other person has theoretically lost 500k paying in rent! Which could have been going on the property…on top of not having access to their house and unable to get a mortgage elsewhere themselves. So having originally bought the investment together, why would one person stand to gain 500k and be able to move and buy somewhere whilst the other starts with 0. 

In my situation, it was an agreement between both of us that would be the case until it’s back in equity. This property was bought for 345k about 1.8 years ago, it was valued at 325k a couple months ago. After interest, 10k has been paid down at the moment in those 1.5 years and I have predicted another 10-15k to pay down the mortgage over the next 2 years. So that’s about 25k paid on the property after interest has been subtracted. I understand in the early years it’s mostly interest being paid rather than the actual capital. That means if the prices stayed the same as current original deposits would be returned and it sold at the current valuation of 325k. But prices are highly unlikely to stay the same (as per savills prediction). My issue is if the property price was to increase by 20-30-40k then now I have a case for my 50%. 

I recall signing the document with solicitors when originally buying stating our percentages of 50% and on the same form choosing if we wanted tenants in common or joint tenants and that is when we chose tenants in common. 

Perfectly valid point of view, and you're accepting both up and down sides.

With that, and that you've originally said 50% (it would be useful if you can find where that's written down), stick to your guns and make the argument. 

You have sensible counterarguments to what they might come back with, as you have demonstrated here.