Couple splitting up - Tenants in Common - advice please!

Baconroll

Hi all,
I'm another one of those long time readers - first time posters.

The advice I need is for my friend, so I do not have all the exact facts & figures available to hand.

The friend in question found out last night that his girlfriend of 5/6 years has recently (apparently it's recent) been seeing another bloke. After a couple of weeks of gut feelings about such matters, he confronted her last night and she eventually confessed all.

Being the good mate I am, I whisked him round the local for a pint (or 10) and we had a chat about his state of affairs.

My mate wants to kick her out and keep the house as his own. This is mainly because of the time, money and effort that he has put into the house. Also, the fact he has nowhere practical to go, while she has her parents and this new fella in close proximity.

They have been living together for 18-24 months and took out a Mortgage as Tenants in Common. Apparently the agreement is that it's a 60:40 split (Her:Him). This is due to her putting a fair chunk of cash in from a trust fund (30K if I remember from the intoxicated rambling).

He is fairly well paid and says he can afford the monthly mortgage payment, but he cannot afford to buy her out as yet and needs advice on doing so. The house was originally bought with a mortgage of £160-180K and with the aforementioned chunk'o'money and their payments so far, the mortgage is £125-135K. Its current market value is around £200-225 going on property prices in the area. It's a very sought after area, so house prices are still steady.

Basically he just wants some advice from anyone who has experience in a similar matter.

As I know he's sleeping of the beer from last night, I thought I'd get the ball rolling for him. All advice appreciated.

Baconroll

I hope no one minds if I bump this up

moneysavinmonkey

If there is a legal agreement in place that they are tenants in common with a 60:40 split then your mate can't 'hold on' to the property and kick his ex out.

As you say he can not afford to buy her out, the only option would be to sell the house as a whole on the open market, or sell his share to her. Perhaps she may consider renting her half to him, but I can foresee that causing all kinds of legal + personal complications so I wouldn't advise it.

Sorry not what your mate wants to hear but he can't take the 30k trust fund from her just because she cheated on him. He will have the benefit of it though as the house has appreciated by x2 if your figures are right so at least his 40% will be showing a healthy profit - I doubt he would have been able to buy a house in this desirable area and enjoyed that capital growth without the girlfriend's deposit so that is something to take from it all. If he holds on to his cash who knows in a couple more years of house prices crashing he could afford to buy a similar house by himself.

Baconroll

Thanks for the reply.

We've had slight progress and things are a little clearer. It seems that his ex is quite happy to move out of the house and has already taken some stuff.

He has been on the phone to his mortgage company (RBS) and they have said that he can borrow an extra amount (£25,000) approx and use this to buy out his ex's share.

The £30,000 (this figure may have been drunkenly overstated by some way and it might only be half as much as this) wasn't a deposit, but an overpayment.

So, if his ex can reach an amicable situation and RBS agree to lend him the money, he can buy his ex's share and keep the property.


Obviously I understand this is very much subject to change and is the first part of what is likely to be a long and tedious rollercoaster.

I will update in due course (maybe today) but if anyone does have anymore suggestions or experiences to share, please do post.


Many thanks.

Phirefly

I like the style of your writing and I'm nosey so please keep us posted.

Baconroll

Ok.

Another update for you nosey people.

A few facts and figures have been made a bit more apparent.

The house was purchased at a value of £160k.

There was a £20,000 deposit and a £140,000 mortgage.

There was a £13,000 overpayment.

And £5,000 has been repaid of the mortgage.

With my excellent arithmetic skills*, I can tell you that that's £38,000 of the house that they own with £122K of mortgage left.

The House is now worth about £180K (previous claim was slightly ambitious - that's beer for you).

The monthly mortgage repayment is 50:50, but because the deposit and overpayment being made by her, the equity share is 60:40.

The way my friend sees it, she has right to 60% of the equity which, given the increase in price and the above-mentioned £38K, is just under £35K. He has right to the remaining 40% (just over £23K).

He needs to take sole control of the house and mortgage. The RBS have said it is possible for this to happen provided all parties agree etc. and that he would then add £35K to the mortgage and use that money to buy her out. He is tied-in to his mortgage for 3 years – so about 12-18 months left before he can look at other options.

I believe it is in his best interest to remain in the house and stay on the property ladder. He will easily be able to rent out a room or 2 to mates or random lodgers, which should help cover the mortgage costs.

Opinions, thoughts and suggestions welcomed. Thanks.


* - arithmetic skills good. Common sense not so good. I may be completely inaccurate in the post forthwith.

david29dpo

Was a trust deed signed by both for the 60/40 split? If not, tenants in common is 50/50