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    • Avocado2102
    • By Avocado2102 9th Aug 18, 2:49 PM
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    Avocado2102
    Co-owner - my rights for being bought out
    • #1
    • 9th Aug 18, 2:49 PM
    Co-owner - my rights for being bought out 9th Aug 18 at 2:49 PM
    Hi there, so my situation is rather unusual - I went into a joint ownership of a 2 bed house on behalf of a family member with one of their friends around 11 years ago to indeed make a profit by building onto the property to later sell hopefully making a profit. I was 19 when this was all signed for and the mortgage was agreed! (Before credit crunch!) My family member was to pay the mortgage monthly with the other co-owner to which over the years there would be some dispute as a lot of the payments were by cash and paid by them only during certain periods, but never less the mortgage has been paid consistently. The other owner has admittedly put more money into this investment and has carried out works from their own pocket - we only invested 5K initially but have paid the mortgage. The issue now is that I would like to be removed from the mortgage but I need to make sure my family member receives a good payout thatís deserved from the amount of years gone by the property is now a 3 bed and there should be an agreement that the co-owner and I can come up with so we can release my name. The co- owner wrote to me offering 10K to walk away from the property which is half the amount we would settle for - this is a poor 5k profit from 11 years of co-owning this property! I have been doing some research and it appears that I can actually be liable for 50% as we are joint owners, I think the xo-owner is trying their best to rip me and my family member off ... shall I demand more and take this to court?
Page 1
    • dimbo61
    • By dimbo61 9th Aug 18, 10:14 PM
    • 10,098 Posts
    • 5,465 Thanks
    dimbo61
    • #2
    • 9th Aug 18, 10:14 PM
    • #2
    • 9th Aug 18, 10:14 PM
    So you paid a £5,000 deposit.
    How much did the others put in ?
    Did you live in the property or pay towards the mortgage each month ?
    Double your money over 11 years from £5,000 to £10,000.
    How much have property prices increased in the area over the last 11 years.
    Check local property sales in the area using rightmove or mouse prices.
    What is the property worth now ?
    • tlc678910
    • By tlc678910 10th Aug 18, 9:13 AM
    • 748 Posts
    • 1,175 Thanks
    tlc678910
    • #3
    • 10th Aug 18, 9:13 AM
    • #3
    • 10th Aug 18, 9:13 AM
    It is impossible to guess what would be fair without knowing what you both paid as deposit, what you both paid over the years, (edit: mortgage owing) and the house value now.

    When you make a payment on a mortgage half your money is usually lost to interest so without house price inflation increasing your equity there will be no "profit".

    We have owned our house 10 years. Paid 10 years off a 30 year mortgage. We would be lucky to get what we paid for it in 2007. If we had saved our mortgage payments in a bank and not had to pay a mortgage we would have more than twice as much as the equity in our home - as we have been paying mortgage interest and losing savings interest. A very poor return on 10 years investment! But just because you would like something to be profitable it doesn't make it so.

    Edit: it isn't unusual at all to have been caught out by the property crash of 08. Many properties are only just recovering their former values with some still worth less.
    Last edited by tlc678910; 10-08-2018 at 9:22 AM.
    • Avocado2102
    • By Avocado2102 10th Aug 18, 9:25 AM
    • 5 Posts
    • 0 Thanks
    Avocado2102
    • #4
    • 10th Aug 18, 9:25 AM
    • #4
    • 10th Aug 18, 9:25 AM
    So you paid a £5,000 deposit.
    How much did the others put in ?
    Did you live in the property or pay towards the mortgage each month ?
    Double your money over 11 years from £5,000 to £10,000.
    How much have property prices increased in the area over the last 11 years.
    Check local property sales in the area using rightmove or mouse prices.
    What is the property worth now ?
    Originally posted by dimbo61
    Hi there, so the other owner put in 10K and we paid 5K - neither of us lived in the property as it had been under development & rented over the last 11 years (2 bed to a 3 bed) its value from 185K to now 320K. The mortgage had been paid from the other owners account but paid mostly by cash by my family member on my behalf.

    There has been many a dispute and things have gotten nasty over the last 6 months as for a long time I have wanted my name off the mortgage since I never thought back when I was 19 that we would still wouldn't have sold the place and now at 30 I want to buy a new place with my husband. My family member wanted to take 21K as a settlement for our part and contribution but they other owner is refusing and wants to only give us 10K to share between us - My family member has paid a lot towards the property over the years and has done a lot of the development which the other owner is refusing to acknowledge.

    We thought 21K was an easy get away for us all since the property had gained significant value, but the other owner is putting up a fight and sending me letters to sign (which I have refused) trying to pay us off with a measly 10K so that she can remortgage by herself.

    We didn't want to go to court or get nasty and have no intentions of ripping her off but she's not the most trustworthy of people and if I have to take this court it would be shame.

    thanks in advance ...
    • tlc678910
    • By tlc678910 10th Aug 18, 9:44 AM
    • 748 Posts
    • 1,175 Thanks
    tlc678910
    • #5
    • 10th Aug 18, 9:44 AM
    • #5
    • 10th Aug 18, 9:44 AM
    So the house value has risen significantly and morally your share should be quite a chunk but the main problem you face in agreeing/proving that is no records/evidence of who paid how much for the mortgage or renovations. It was not a good idea to pay cash towards mortgage payments - how can you evidence this? What rent was received? Did this not cover the mortgage?

    If the property is held 50:50 then you could try for half based on the ownership. It sounds like you will have to insist on a sale as the other owner is only offering 10k in order to be able to keep the property but that is a long long way from half equity. The property could be sold and the solicitor instructed to divide the equity 50:50 as per legal ownership. (You could agree they get their extra 5k deposit back or more if you do feel they "put in" more than you).

    Either the property needs selling and equity dividing or the threat of it to make the other owner come up with a more realistic offer. I wouldn't worry too much about the effect on "relationships" - that ship has sailed.

    Tlc

    Edit: I would be going for more than 20k as the property has risen by 135k and could have a lot more equity than this - initial deposit and anything paid off the mortgage. Even going a third, two thirds as per initial deposit is a lot more. If it was rented out surely this covered most of the costs.
    Last edited by tlc678910; 10-08-2018 at 9:49 AM.
    • silvercar
    • By silvercar 10th Aug 18, 10:11 AM
    • 38,280 Posts
    • 160,918 Thanks
    silvercar
    • #6
    • 10th Aug 18, 10:11 AM
    • #6
    • 10th Aug 18, 10:11 AM
    If it cost 185k and you put in 15k deposit between you, that suggests 170k mortgage. Even with an interest only mortgage and you both contributing to the costs of making it a 3 bed, that leaves equity of 320-170=£150k do 75k each on a 50/50 split.

    Even allowing for an inflated current value and deducting some sale costs if it ended up being sold, I don't see why you should walk away with less than 60k on your side.
    • getmore4less
    • By getmore4less 10th Aug 18, 10:34 AM
    • 33,599 Posts
    • 20,327 Thanks
    getmore4less
    • #7
    • 10th Aug 18, 10:34 AM
    • #7
    • 10th Aug 18, 10:34 AM
    Who has been getting the rent?


    need loads more info to have any chance of working out what would be reasonable.

    The full cashflow would be a good start,

    Then there are the softer things that are harder to value like time contributions in running the refurb and rental business.
    • Avocado2102
    • By Avocado2102 10th Aug 18, 2:09 PM
    • 5 Posts
    • 0 Thanks
    Avocado2102
    • #8
    • 10th Aug 18, 2:09 PM
    • #8
    • 10th Aug 18, 2:09 PM
    Hi there,

    The rent was paid against the mortgage through the other owner who oversaw everything really, but that only went on for a little while - most of the time its been in construction with my family member working on it and paying their half.

    Unfortunately my family member was a bit 'rogue' and perhaps naive by paying cash, at the time there was probably too much trust.

    Its such a nightmare and I wish I had more say in how things were executed back then, but me as a very naive teenager thought it be best in the adults hand!! How wrong was I ?!

    I understand that the other owner doesn't want to sell as the owner actually wants to move in after renovation! I think thats why they are trying to get me off the mortgage quickly for as little as possible and probably a little underhand if you ask me...

    Would you recommend taking this to court??? Even though theres no trace of my family members contribution and all from the other owner???

    But its 50:50 right? We have a joint mortgage and took it out together with no declaration....
    Last edited by Avocado2102; 10-08-2018 at 2:13 PM. Reason: added comments
    • Avocado2102
    • By Avocado2102 10th Aug 18, 2:16 PM
    • 5 Posts
    • 0 Thanks
    Avocado2102
    • #9
    • 10th Aug 18, 2:16 PM
    • #9
    • 10th Aug 18, 2:16 PM
    Thank you, just don't know how to get it to swing my way ...
    • bigstevex
    • By bigstevex 10th Aug 18, 7:37 PM
    • 824 Posts
    • 379 Thanks
    bigstevex
    I think you need professional legal advice. If there's no contract between you all it will get very messy. Need to be able to prove as much as possible that you/family members have paid into it. Either way if the house has gone up £135k, and they put 10K in vs your 5K... So lets say that was 66%/33% ownership, you would still be going for ~45K IMO.


    The solicitor who arranged the purchase for you should have done or explained this prior to purchase to prevent this situation occuring (just like a couple splitting up). Have you read through all the legal docs from the purchase, or tried to obtain them from the solicitor you used if you don't have them anymore?
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