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Tenants in Common - unequal deposit - what is fair?
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A method I have used which I believe to be fair is to be protect the 10% deposit via a deed of trust. Meaning if the house is 200k and the 10% deposit is 20k, in case of any future split the house is now worth 250k then partner A would first receive back 25k and then the rest of the equity split 50/50. This protects partner A's investment like any appreciating asset.
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no need for a separate DoT, simply own 55% (110/200) to 45%Ruggers13 said:A method I have used which I believe to be fair is to be protect the 10% deposit via a deed of trust. Meaning if the house is 200k and the 10% deposit is 20k, in case of any future split the house is now worth 250k then partner A would first receive back 25k and then the rest of the equity split 50/50. This protects partner A's investment like any appreciating asset.
That is the fairest way as that exposes the deposit to the full effect of price rises and falls.
why should the deposit be protected in full if the price falls?
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In my scenario payments were also not equal 50/50 after the initial deposit so a further added complex. Seemed easy to calculate based on protecting initial deposit as a % of the property at the time. There's more than one way to skin a cat.Bookworm225 said:
no need for a separate DoT, simply own 55% (110/200) to 45%Ruggers13 said:A method I have used which I believe to be fair is to be protect the 10% deposit via a deed of trust. Meaning if the house is 200k and the 10% deposit is 20k, in case of any future split the house is now worth 250k then partner A would first receive back 25k and then the rest of the equity split 50/50. This protects partner A's investment like any appreciating asset.
That is the fairest way as that exposes the deposit to the full effect of price rises and falls.
why should the deposit be protected in full if the price falls?
The deposit is not protected if the price falls.0 -
which is exactly why I said the decision is driven by the deposit provider's attitude to risk of money loss v inflationary lossRuggers13 said:
The deposit is not protected if the price falls.Bookworm225 said:
no need for a separate DoT, simply own 55% (110/200) to 45%Ruggers13 said:A method I have used which I believe to be fair is to be protect the 10% deposit via a deed of trust. Meaning if the house is 200k and the 10% deposit is 20k, in case of any future split the house is now worth 250k then partner A would first receive back 25k and then the rest of the equity split 50/50. This protects partner A's investment like any appreciating asset.
That is the fairest way as that exposes the deposit to the full effect of price rises and falls.
why should the deposit be protected in full if the price falls?0
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