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    • marshalex
    • By marshalex 24th Jun 19, 5:52 PM
    • 23Posts
    • 6Thanks
    Claiming a loan as a gift
    • #1
    • 24th Jun 19, 5:52 PM
    Claiming a loan as a gift 24th Jun 19 at 5:52 PM

    Not sure if this is the right forum for this but I came across a similar (now closed thread) on here and thought this might be right.

    A few years ago my in-laws loaned my brother in law and his then gf money to buy their house. They'd been together years, had already owned one house together and had agreed to live with the in-laws while the renovations were on going so they got nothing in writing (He's a tradesman and the house was unmortgagable due to the extensive renovations which needed doing to it and the previous bidders for the property pulled out after multiple lenders stated the above).

    To cut a long story short, the property is now finished by they have split up. The (now ex) gf will only acknowledged the existence of the original loan if she agrees to a 50/50 split in the proceeds of the house minus the original loan. This is despite doing minimal work on it since it was purchased and having lived with my in-laws for the 2 years (rent free) while the house was being renovated. The bro-in-law has invoices, spreadsheets etc. detailing ever hour spent on the property and should realistically be getting at least 80% of the value after the loan out for the time spent (and from time spent on a previous property they had and did the same thing on which funded the materials for this one, which again he has hours logged for).

    This ultimatum has been issue by her solicitors and (rightly) the in-laws don't agree with what she's doing but don't want to risk their original loan by (potentially) going to court and losing as even though we've got numerous witnesses to the agreement (backed up by me and my wife buying a house at the same time they did and not getting said "gift") there's obviously a risk in going down this route to ensure he get's what's rightfully his.

    I'm of the opinion (which is quite easy as it's not my money at stake) that if it were to go to court it should go in his favour because of the below
    • Precedent set when borrowed money from her parents to buy first house which was repayed
    • No money offered to ourselves when we purchased our house before they did (wife is the eldest, we have an excellent relationship with my in-laws and gifting the unmarried sibling the amount in question would have caused significant breakdown in our relationship)
    • Witnesses to state we all (her included) knew that it was a loan
    • Trackers and invoices for all the work he undertook at this property (and their previous one) to stake his claim
    • The original bank transfer for the amount of the loan
    • To now state that the loan is now a gift would constitute fraud by deception (attempting to obtain money she know's is not hers to obtain)

    I will admit that I will have an element of bias towards this, however on the balance of all probabilities I would like to think if it went to court (which is the only option left now after this ultimatum) he'd get what's rightfully his but I'd be interested to hear some impartial opinions on the subject and whether it's worth the original loan by going to court, or if there are other ways of securing the in-laws funds whilst ensuring he can get what's rightfully his for the time spent completing the renovations.
Page 2
    • jimbo26
    • By jimbo26 25th Jun 19, 7:50 AM
    • 668 Posts
    • 499 Thanks
    I think the offer is reasonable. The house purchase and renovation was a joint enterprise regardless of who actually installed the kitchen or put up some tiles. She could get funny and say the loan was to her ex and that should be paid out of his half of the sale.

    This way both come out of it with half the equity (minus the loan which they have paid off half each).

    Put it down to experience and a life lesson.
    • dealer wins
    • By dealer wins 25th Jun 19, 8:54 AM
    • 6,450 Posts
    • 12,972 Thanks
    dealer wins
    Yet another lesson that loans and family never mix.

    Even if its your own son, daughter, mother, father if you are going to offer a loan get it recorded in writing stating exactly on what terms it is on, how it is to be repaid and what happens to any appreciating asset etc.

    Trust no-one where money is concerned, it can and does corrupt the closest family relationships time and time again!
    • shortcrust
    • By shortcrust 26th Jun 19, 9:05 AM
    • 2,359 Posts
    • 3,744 Thanks
    Keep in mind that her offer could presumably be withdrawn at any point until things are formalised. If I were her and I got wind that the family were looking at ways to have me walk away with nothing Id stop playing ball immediately.

    Surely there have been enough replies now from unbiased folk for you to realise that her offer is reasonable.
    • Man From Bath
    • By Man From Bath 27th Jun 19, 12:46 PM
    • 19 Posts
    • 25 Thanks
    Man From Bath
    ive read this and believe it to be a wind up.

    You really think your brother in law should be paid for working on his own house ?

    I've been married 20 years, always been the highest earner perhaps if i split up i should get more ?

    She's recognised the loan and willing to pay back 50%,

    also you should seek counselling, break ups happen all the time.
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