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  • FIRST POST
    • daniesto
    • By daniesto 5th Jul 18, 2:09 PM
    • 23Posts
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    daniesto
    house dispute
    • #1
    • 5th Jul 18, 2:09 PM
    house dispute 5th Jul 18 at 2:09 PM
    my first post here.


    If you buy a house under your name but the deposit was paid by someone like a family member can they claim right to your house? I know in UK banks wants to know where the deposit comes from. There is no documents signed to say the money was given as a loan or gift. If the person can prove it to the bank that they paid the deposit and only using your name to buy the house (all the deeds/documents/direct debits are in you name) will the bank fault you and you would lose the house?
    many thanks
Page 1
    • PasturesNew
    • By PasturesNew 5th Jul 18, 2:16 PM
    • 64,236 Posts
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    PasturesNew
    • #2
    • 5th Jul 18, 2:16 PM
    • #2
    • 5th Jul 18, 2:16 PM
    Worst case scenario is that they'd be deemed as "owning" the value they put in, or the %age.... not the whole house.

    Although, you've not given the full story, so there might be other details you've omitted that are crucial to anybody saying.
    • Pixie5740
    • By Pixie5740 5th Jul 18, 2:16 PM
    • 12,919 Posts
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    Pixie5740
    • #3
    • 5th Jul 18, 2:16 PM
    • #3
    • 5th Jul 18, 2:16 PM
    my first post here.


    If you buy a house under your name but the deposit was paid by someone like a family member can they claim right to your house? I know in UK banks wants to know where the deposit comes from. There is no documents signed to say the money was given as a loan or gift. If the person can prove it to the bank that they paid the deposit and only using your name to buy the house (all the deeds/documents/direct debits are in you name) will the bank fault you and you would lose the house?
    many thanks
    Originally posted by daniesto
    The person making a claim doesn't have to prove anything to the mortgage lender because the mortgage lender does not own the property. Yes they have a charge against the property to secure the loan but the lender is neither a legal nor beneficial owner of the property.

    The person making the claim would need to be able convince a court that the money was not a gift and that (s)he has a beneficial interest in the property. The other possibility is that the money was not a gift but a loan and in that case the person couldn't claim a beneficial interest in the property.
    • eddddy
    • By eddddy 5th Jul 18, 2:26 PM
    • 6,890 Posts
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    eddddy
    • #4
    • 5th Jul 18, 2:26 PM
    • #4
    • 5th Jul 18, 2:26 PM
    Are you asking this because you're planning to do it? Or because you've already done it, and things are now getting messy?

    If you buy a house under your name but the deposit was paid by someone like a family member can they claim right to your house?
    Originally posted by daniesto
    The starting point is - what did you both agree when the family member gave you the money?

    Did you agree it was a gift, a loan, a payment for part share in the house, or something else?

    Whether the agreement can be enforced in court is another question.

    ...will the bank fault you and you would lose the house?
    Originally posted by daniesto
    If you lied on the mortgage application form about where the deposit came from, and the bank later find out - they might ask for their loan back.

    In more extreme circumstances, they might also report you to the police for fraud.
    Last edited by eddddy; 05-07-2018 at 2:32 PM.
    • daniesto
    • By daniesto 5th Jul 18, 2:49 PM
    • 23 Posts
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    daniesto
    • #5
    • 5th Jul 18, 2:49 PM
    • #5
    • 5th Jul 18, 2:49 PM
    first of all many thanks for your replies.


    Lets refer family member as Tom (the person who gave the deposit) and other party (ones who's name on the deeds as Paul)


    Paul bought the house under his name but the deposit was given to him by Tom via a bank transfer. The property was rented out which paid the mortgage but all the profit went to Tom as it was a mutual agreement between the two (no legal documents signed here). Over the years Tom made 70k profit from the house but Paul never asked for a penny nor was offered. One day Paul decided he wants to get some of the rent money but Tom disputed that he has the right to the property because he paid the deposit and now he wants that house. There is no legal documents signed to say the deposit was loaned or Paul must pay it back which means it is given a gift.


    Paul disputed he wont give the house back because everything is under his name. The account where Tom put the deposit money was closed few years ago therefore there is no statement to prove it either. Paul recently re-mortgaged the property took 80,000 and bought a flat. However Paul said when he sells the house everyone will get a fair share but meanwhile he will keep the rent profit which is about 200 (after paying the mortgage payments)


    Now if Tom takes Paul to court saying he has a right to the original property because he paid the deposit what would happen?


    Note: Paul is paying both mortgages at the moment.

    Paul is me
    Tom is my step-dad
    • daniesto
    • By daniesto 5th Jul 18, 3:01 PM
    • 23 Posts
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    daniesto
    • #6
    • 5th Jul 18, 3:01 PM
    • #6
    • 5th Jul 18, 3:01 PM
    And I apologise for not given the full story earlier.
    • Fosterdog
    • By Fosterdog 5th Jul 18, 3:06 PM
    • 3,991 Posts
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    Fosterdog
    • #7
    • 5th Jul 18, 3:06 PM
    • #7
    • 5th Jul 18, 3:06 PM
    How long has this been going on? For "Tom" to have made 70k profit from the house from 200 a month rent profit would have taken almost 30 years, then add on the time to pay back the original deposit and it could be over 30 years.
    • lisyloo
    • By lisyloo 5th Jul 18, 3:07 PM
    • 22,499 Posts
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    lisyloo
    • #8
    • 5th Jul 18, 3:07 PM
    • #8
    • 5th Jul 18, 3:07 PM
    Now if Tom takes Paul to court saying he has a right to the original property because he paid the deposit what would happen?

    Just to confirm. Am I correct in saying Tom has absolutely no proof whatsoever that he paid the deposit?
    • lisyloo
    • By lisyloo 5th Jul 18, 3:14 PM
    • 22,499 Posts
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    lisyloo
    • #9
    • 5th Jul 18, 3:14 PM
    • #9
    • 5th Jul 18, 3:14 PM
    all the profit went to Tom as it was a mutual agreement between the two
    One day Paul decided he wants to get some of the rent money

    But it was a mutual agreement that Tom got the rent money right?


    but Tom disputed that he has the right to the property because he paid the deposit and now he wants that house

    What was the agreement regarding the deposit/house ownership?


    Paul said when he sells the house everyone will get a fair share

    What does that mean. The same % of the equity that the deposit represented?


    but meanwhile he will keep the rent profit which is about 200

    So that's contrary to the original mutual agreement in the first quoted statement?


    Apologies but we need to get the bottom of the details.
    • Caz3121
    • By Caz3121 5th Jul 18, 3:28 PM
    • 11,440 Posts
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    Caz3121
    to confirm
    The property is in Paul's name only and Paul is paying the mortgage
    It is currently rented out (was this a BTL mortgage?) and Paul receives no rental as it all goes to Tom...does he see this as 'getting his money back'?
    who is declaring the rent for tax purposes?
    • Pixie5740
    • By Pixie5740 5th Jul 18, 3:33 PM
    • 12,919 Posts
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    Pixie5740
    To me that sounds as though Paul is the sole legal owner of the property but Tom might be the sole beneficial owner of the property. Could you please clarify:

    1) Who is named as the landlord on the tenancy agreements?

    2) Who has been declaring the rental income to HMRC?
    • foxy-stoat
    • By foxy-stoat 5th Jul 18, 4:00 PM
    • 2,663 Posts
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    foxy-stoat
    3) Did Paul commit mortgage fraud by not declaring the deposit come from Tom or the terms of the "loan"?
    • RubyHouse
    • By RubyHouse 5th Jul 18, 4:33 PM
    • 47 Posts
    • 28 Thanks
    RubyHouse
    How long has this been going on for? I dont think Tom has any right to the property unless it was written into the contract/mortgage. The proof of funds regulation only came into force in 2017 (I think - please someone correct me if I am wrong).
    As there was nothing official drawn up, he has nothing to prove he has any right to the house. You have been paying the mortgage so this will work in your favour, worst case scenario, he will receive back the money he paid in (arguably this has been paid in rental income already).
    It seems crazy to think that a someone would assume right to a house or part of a house without having any legal documentation to back this up.

    Regarding the rental income, if you feel he has no right to receive this, simply ask the tenant or letting agent to change bank details.
    • daniesto
    • By daniesto 5th Jul 18, 5:35 PM
    • 23 Posts
    • 1 Thanks
    daniesto
    Just to confirm. Am I correct in saying Tom has absolutely no proof whatsoever that he paid the deposit?
    Originally posted by lisyloo

    As far as I am aware he has no proof. He can only prove if ever anything is that he transferred the money but there is no documents signed to say why he gave me that money.
    • daniesto
    • By daniesto 5th Jul 18, 5:38 PM
    • 23 Posts
    • 1 Thanks
    daniesto
    How long has this been going on? For "Tom" to have made 70k profit from the house from 200 a month rent profit would have taken almost 30 years, then add on the time to pay back the original deposit and it could be over 30 years.
    Originally posted by Fosterdog

    This has been going on for more than 15 years. First 5 years were repayments then it was interest only which was as little as 230 but it was rented out for 1300. 70k was the lowest estimate but Tom had it good.
    • Pixie5740
    • By Pixie5740 5th Jul 18, 5:41 PM
    • 12,919 Posts
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    Pixie5740
    I shall ask again, who has been declaring the rental income to HMRC?

    Another question, who has been responsible for the repairs and maintenance of the property for the last 15 years?
    • daniesto
    • By daniesto 5th Jul 18, 5:47 PM
    • 23 Posts
    • 1 Thanks
    daniesto
    But it was a mutual agreement that Tom got the rent money right?

    Yes mutual, we agreed on a verbal principle because of my mum.



    What was the agreement regarding the deposit/house ownership?
    There is no agreement whatsoever, none was made, not verbally nor by a legal document.



    What does that mean. The same % of the equity that the deposit represented?
    If I ever sell the house he wants a share.




    So that's contrary to the original mutual agreement in the first quoted statement?
    just a verbal agreement.


    Apologies but we need to get the bottom of the details.
    • glentoran99
    • By glentoran99 5th Jul 18, 5:50 PM
    • 5,476 Posts
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    glentoran99



    What does that mean. The same % of the equity that the deposit represented?
    If I ever sell the house he wants a share.

    Originally posted by daniesto


    if his deposit was 10 % of the value, he gets 10% of any amount left over when the mortgage is paid off


    so if its sold for 180,000 and the remaining mortgage is 100,000 he gets 8000 off the sale
    • Pixie5740
    • By Pixie5740 5th Jul 18, 5:50 PM
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    Pixie5740
    Tom would only be entitled to the rent money if he was the beneficial owner. If your mutual agreement was that Tom received the rent money then it sounds as if the mutual agreement meant Tom was the beneficial owner.

    It's either that or you've been evading tax for 15 years.
    • daniesto
    • By daniesto 5th Jul 18, 5:55 PM
    • 23 Posts
    • 1 Thanks
    daniesto
    to confirm
    The property is in Paul's name only and Paul is paying the mortgage
    It is currently rented out (was this a BTL mortgage?) and Paul receives no rental as it all goes to Tom...does he see this as 'getting his money back'?
    who is declaring the rent for tax purposes?
    Originally posted by Caz3121

    Yes property is in Paul's name. The deed has his name only no other third parties.


    Yes it just got rented out after BTL mortgage and I have declared for HMRC.


    I moved to that property 2 years ago and stopped Tom getting rent money. I spent 25000 refurbing it to luxury living because Tom & my mum said he will give me that money back which it never happened. I was living in that property for last two years paying 1000 repayments. This whole thing started to kick in after Tom seeing how good that property was and what I wanted to do with it. I repeated told him he made enough from it but he disputed.
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