What to do with windfall - negative equity, needs lease extension, jointly owned with ex

mlz1413

Lots of great advise already given.

I would contact your ex and ask what she wants to do with the flat.  It sounds like a fair amount of time has passed and it would be reasonable to re-assess what you both what.

Inheritance can take months, possibly more than a year.

If your ex and you agreed to wait for the flat to go up in value, then she may still want that.  With such a short lease I agree it is highly unlikely. 
Any increase in value is going to be swallowed up in lease extension fees.

But, the whole lease extension process is under review and there is a chance that in 2 years time the marriage value maybe abolished. Although it is unclear if it will juat be called something else!

So you do need a conversation to establish what you both want.

If you are both not on great terms then try and get the conversation to happen on neutral ground (like a cafe) and maybe with a mutual friend who can ensure the conversation remains balanced.

Herzlos

zedonk said:

Herzlos said:

Because if you're still in negative equity you wouldn't be extending the lease either. 

Sorry if I'm missing something - why would I not extend the lease if I'm in negative equity? 

You don't want to spend any money to boost the value before 'buying out' your ex, because it'll just mean you're more likely to need to pay her money if it takes you from negative to positive equity.

Once it's 100% yours, then extend the lease. 

ReadySteadyPop

zedonk said:

Thanks all. It sounds as though the most sensible thing to do is get the flat valued now, then buy out my ex (or write off her share if we're still in negative equity) before I consider extending the lease, paying off the mortgage or selling. 

My ex is on benefits and not in any position to contribute financially, so far as I know.

Right now I'm undecided whether I want to move closer to friends and family (which would mean a new mortgage because it's a more expensive area - and I'd do freehold this time!) or just stay here potentially mortgage free.

Of course I don't know when I'll get the inheritance, my relative's house has to sell first and that makes the amount uncertain too, so I'm just trying to get straight in my head what I could do when the time comes. 

Ok, I though you already had the money, the amount and time to receive it is going to be uncertain in this market, best bet is stay put and get the debt paid off (or get a plan to start paying it off) Should be in your name only if the ex is not contributing in any way?

ReadySteadyPop

Herzlos said:

zedonk said:

Herzlos said:

Because if you're still in negative equity you wouldn't be extending the lease either. 

Sorry if I'm missing something - why would I not extend the lease if I'm in negative equity? 

You don't want to spend any money to boost the value before 'buying out' your ex, because it'll just mean you're more likely to need to pay her money if it takes you from negative to positive equity.

Once it's 100% yours, then extend the lease. 

Good point, but if extending the lease is going to boost the flat`s value by enough to cancel NE then any basic legal advice the ex gets is going to point that out? She should be paying half though don`t you think?

Herzlos

ReadySteadyPop said:

Herzlos said:

zedonk said:

Herzlos said:

Because if you're still in negative equity you wouldn't be extending the lease either. 

Sorry if I'm missing something - why would I not extend the lease if I'm in negative equity? 

You don't want to spend any money to boost the value before 'buying out' your ex, because it'll just mean you're more likely to need to pay her money if it takes you from negative to positive equity.

Once it's 100% yours, then extend the lease. 

Good point, but if extending the lease is going to boost the flat`s value by enough to cancel NE then any basic legal advice the ex gets is going to point that out? She should be paying half though don`t you think?

Presumably the ex doesn't have the money to pay for half of the lease though, so it's a kind of moot point. 

Morally it's a bit grey, but logically without the OP's windfall money the ex wouldn't be able to afford to extend the lease or buy out the OP so from their perspective it doesn't matter about the windfall. 
If OP's been paying the rent for a while too, then things skew further. 

If the ex knows about the windfall they'd certainly be entitled to ask for some equity back though I'm not sure what the outcome of that would be beyond an expensive waste of time on both sides. 

It'll be much cleaner to not mention the windfall and offer to take ex's name off the mortgage. That way ex isn't tied to the house or any outstanding debt/maintenance, which is a win on it's own. 

ReadySteadyPop

Herzlos said:

ReadySteadyPop said:

Herzlos said:

zedonk said:

Herzlos said:

Because if you're still in negative equity you wouldn't be extending the lease either. 

Sorry if I'm missing something - why would I not extend the lease if I'm in negative equity? 

You don't want to spend any money to boost the value before 'buying out' your ex, because it'll just mean you're more likely to need to pay her money if it takes you from negative to positive equity.

Once it's 100% yours, then extend the lease. 

Good point, but if extending the lease is going to boost the flat`s value by enough to cancel NE then any basic legal advice the ex gets is going to point that out? She should be paying half though don`t you think?

Presumably the ex doesn't have the money to pay for half of the lease though, so it's a kind of moot point. 

Morally it's a bit grey, but logically without the OP's windfall money the ex wouldn't be able to afford to extend the lease or buy out the OP so from their perspective it doesn't matter about the windfall. 
If OP's been paying the rent for a while too, then things skew further. 

If the ex knows about the windfall they'd certainly be entitled to ask for some equity back though I'm not sure what the outcome of that would be beyond an expensive waste of time on both sides. 

It'll be much cleaner to not mention the windfall and offer to take ex's name off the mortgage. That way ex isn't tied to the house or any outstanding debt/maintenance, which is a win on it's own. 

And to skew things even further the "windfall" is in a house that has not sold yet.

Herzlos

No skewing at all, the guys just doing some research in good time rather than last minute. 

zedonk

Thanks for the advice all. No, the windfall isn't here yet and I'm just trying to plan ahead. 

I will get the flat valued now and have a chat with my ex.

ReadySteadyPop

Herzlos said:

No skewing at all, the guys just doing some research in good time rather than last minute. 

Fair enough, but with a property sale you don`t know when or how much you will get, better to have the chat and try to get some extra income straight away, lodgers etc. to pay down the mortgage debt.