Beneficial interest

Emmahod

Hi 
looking for abit of advice 
the house me and my husband lived in recently sold. 

Abit of background the house was purchased by my husbands parents and they put a deposit in.
they asked us to take on the mortgage but due to credit issues we had to have the mortgage under my husband and his 2 parents names. 

My husband signed a declaration of trust stating upon sale of the property the mortgage would be cleared, they would get their deposit and the rest to go to my husband after he pays fees etc 

the house sold way less than anyone was expecting which has resulted in the in-laws getting all proceeds from the sale and leaving us with nothing. 

I have lived in that property for 15+ years and paid the mortgage and any maintenance needed. 

The in laws have never contributed to any mortgage payments and only ever put in the initial deposit but they chose to buy this house it wasn’t something that we asked them to do.

I know I am not named on the mortgage but have I really just lost all the money I have paid towards their mortgage. 

I read about beneficial interest would this apply here? Or does the declaration of trust mean that there is nothing I can do? 

noitsnotme

*edit* This is a continuation of another thread that already has all the relevant background information in it - https://forums.moneysavingexpert.com/discussion/6521247/deed-of-trust#latest

Emmahod

noitsnotme said:

*edit* This is a continuation of another thread that already has all the relevant background information in it - https://forums.moneysavingexpert.com/discussion/6521247/deed-of-trust#latest

It has changed since this post.
despite telling us the money would could go to us with the restrictions, they have since kept all the money with no intention of anything coming back to us.

Brie

My understanding is a beneficial interest is a term used normally when a couple is getting a divorce and dividing up assets including the home.  So someone living there but having never paid the mortgage (traditionally the wife) would have a beneficial interest and therefore get a portion of the sale value.  So if the house sold for £200k and there was still a mortgage of £100k she might get 50% of the profit so £50k.  But if a house is sold and there is no profit from the sale - as in your case - then there is no profit to split up. 

Your husband (presumably with your agreement) said the that deposit would be paid back and you say it has but left nothing else.  Would you have been able to buy the house without their support?  How much would it cost you instead to have rented someplace?  It's possible that you are not really worse off but that's hard to know for sure without more details.   

BarelySentientAI

Your situation is just the same as if you had negative (or rather zero) equity on a mortgage.

If (to use random numbers), you had a legal agreement to pay back 100k when you sold the house.  Call it a mortgage, call it an equity loan, call it a deed, call it whatever you want, but something legal that said "I owe you 100k when I sell the house".

You can't then, if you sell the house for 100k, turn around and say "don't fancy giving you all of that, I'm keeping some"

If it was the bank you wouldn't.  If it was a building society you wouldn't.  Just because it is family, doesn't change the legal position.  They could be nice and let you off, which a company wouldn't, but there is no legal right to anything different from what was signed.

This tends to be why, when a deed of trust is being signed on a house purchase, it is often recommended to use % of ownership and not ££ numbers.  All parties share in the up and the down.  It seems that you were party to one that gave all the upside to your husband (because if the house price had gone up a lot, the parents would not have got any extra) but that comes with the consequence of all the downside too.

GDB2222

Most houses have gone up in value. Why didn’t this one?

Emmahod

BarelySentientAI said:

Your situation is just the same as if you had negative (or rather zero) equity on a mortgage.

If (to use random numbers), you had a legal agreement to pay back 100k when you sold the house.  Call it a mortgage, call it an equity loan, call it a deed, call it whatever you want, but something legal that said "I owe you 100k when I sell the house".

You can't then, if you sell the house for 100k, turn around and say "don't fancy giving you all of that, I'm keeping some"

If it was the bank you wouldn't.  If it was a building society you wouldn't.  Just because it is family, doesn't change the legal position.  They could be nice and let you off, which a company wouldn't, but there is no legal right to anything different from what was signed.

This tends to be why, when a deed of trust is being signed on a house purchase, it is often recommended to use % of ownership and not ££ numbers.  All parties share in the up and the down.  It seems that you were party to one that gave all the upside to your husband (because if the house price had gone up a lot, the parents would not have got any extra) but that comes with the consequence of all the downside too.

Thank you. I haven’t signed the declaration of trust this was done without my knowledge or consent. I have contributed more towards the mortgage payments each month but I’m also not on the mortgage 

I’m just struggling to understand how something my husband signed before we were married over 15 years ago has left us with zero from the house that we have been paying for the last 15 years. 

We didn’t ask for them to purchase the house they had purchased it and were renting it out. 

We only agreed to take it on as the mother in law said it was my hubbys inheritance 

swingaloo

If the house was bought 15 years ago where has all the equity gone?

BarelySentientAI

Emmahod said:

BarelySentientAI said:

Your situation is just the same as if you had negative (or rather zero) equity on a mortgage.

If (to use random numbers), you had a legal agreement to pay back 100k when you sold the house.  Call it a mortgage, call it an equity loan, call it a deed, call it whatever you want, but something legal that said "I owe you 100k when I sell the house".

You can't then, if you sell the house for 100k, turn around and say "don't fancy giving you all of that, I'm keeping some"

If it was the bank you wouldn't.  If it was a building society you wouldn't.  Just because it is family, doesn't change the legal position.  They could be nice and let you off, which a company wouldn't, but there is no legal right to anything different from what was signed.

This tends to be why, when a deed of trust is being signed on a house purchase, it is often recommended to use % of ownership and not ££ numbers.  All parties share in the up and the down.  It seems that you were party to one that gave all the upside to your husband (because if the house price had gone up a lot, the parents would not have got any extra) but that comes with the consequence of all the downside too.

Thank you. I haven’t signed the declaration of trust this was done without my knowledge or consent. I have contributed more towards the mortgage payments each month but I’m also not on the mortgage 

I’m just struggling to understand how something my husband signed before we were married over 15 years ago has left us with zero from the house that we have been paying for the last 15 years. 

We didn’t ask for them to purchase the house they had purchased it and were renting it out. 

We only agreed to take it on as the mother in law said it was my hubbys inheritance 

You and your husband are one unit - you have effectively signed the declaration.

Had you split, your contributions would be considered in any divorce settlement.  You haven't done that.  This is just the owners selling the house based on the legal documents associated with it.

I second GBD's question - how has the price of the house dropped so much that it's only worth the deposit paid 15 years ago?  That doesn't seem to match any house price I've ever seen.

Emmahod

swingaloo said:

If the house was bought 15 years ago where has all the equity gone?

It has been identified as having structural issues 

Bookworm105

Emmahod said:

swingaloo said:

If the house was bought 15 years ago where has all the equity gone?

It has been identified as having structural issues 

well then it sold for what it is worth now and you have made a loss, time for you accept some facts of life and move on

you keep harping about you didn't want the house, yet you were the ones who stayed there. Presumably you saw it as a way to get a house without needing a big deposit of your own. It worked for you at the time .

as others have explained, the declaration is no different to husband owing money on a loan. If there is nothing left after that loan repayment, then there is nothing left.

The fact you have paid a mortgage and not made a "profit" is down to you failing to identify the state of the house and have works down to it to correct it.