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Clare
Clare, Family Solicitor
Category: Family Law
Satisfied Customers: 33507
Experience:  I have been a solicitor in High Street Practise since 1985 and have specialised in Family Law for the last 10 years
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Is it possible to sell a percentage say 20% of my property

Resolved Question:

Is it possible to sell a percentage say 20% of my property to my son to raise funds? The property is worth in excess of 350,000 and he would need to take out a mortgage to raise the funds. The situation has been caused by the ex leaving and landing me with a mortgage I can't afford. The ex has never paid into the house it was previously owned by myself free of any mortgage.

Submitted: 1 year ago.
Category: Family Law
Expert:  Thomas Judge replied 1 year ago.
In theory it is possible to sell your son a share of the property. However, you would need to ensure that there was enough money in the property for his mortgage to be able to take a hold in some equity. The share would have to be at market price and there would also be tax considerations. You would also need to check that this would not be a breach of your present mortgage.
Customer: replied 1 year ago.

BASICALLY IT WOULD BE TO BUY THE EXISTING MORTGAGE OFF.

IT WOULD BE A PRO RATA SHARE IN THE PROPERTY AS i SAID THE PROPERTY IS WORTH APPROX 350,000 AND HE WOULD BE AFTER SAY 80,000 TO PAY OFF THE EXISTING MORTGAGE.

i SPOKE TO THE MORTGAGE ADVISOR AT THE BANK WHO SAID IT WAS ILLEGAL AND i WOULD HAVE TO VACATE THE PROPERTY, i TRIED TO GET AN EXPLANATION BUT ALL HE KEPT SAYING WAS IF i CONTINUED TO LIVE HERE THE MORTGAGE WOULD HAVE TO BE JOINT. THE TROUBLE WITH THAT IS i'M ALREADY 60 SO THE REPAYMENT TERM WOULD THEN BE QUITE SHORT. i JUST COULDN'T SEE WHY HE WAS UNABLE TO PURCHASE A PERCENTAGE FOR A REALISTIC FIGURE.

Expert:  Thomas Judge replied 1 year ago.
Well the financial advisor is wrong. I would suggest that you try to locate a different independent financial advisor who can talk you through the process.
Customer: replied 1 year ago.

Thanks because Cheltenham and Gloucester the current mortgage provider have just said the same thing. If you sell him 20% then you have to move out of the property. What? I would still own 80% of it but not be allowed to live in it according to property law, how can that be so?

Expert:  Thomas Judge replied 1 year ago.
It is possible and not uncommon. So you need to speak with a specialist IFA
Expert:  Clare replied 1 year ago.
Hi
Thank you for your question.
The actual issue is that if you remain a joint owner you will need to be on the mortgage as well - unless the property is transferred totally into his sole name
Clare
Customer: replied 1 year ago.

yeah I found that out on google, it's not law it's just a case if he defaults they want to be able to repossess and they'd struggle with that if I own 80% of the property and none of the debt. It would be wrong to transfer the property into his sole name for 70-80 grand cos then I'd be in trouble with both the Inland revenue and Land registry for fraud and tax evasion.

So even experts don't know the answer.

The mortgage lender can offer no assistance their answer to every possible suggestion is no. Maybe I'll just default and see if they listen then.

Expert:  Clare replied 1 year ago.
Hi
In fact you can indeed transfer the property for that amount.
It is neither fraud nor tax evasion.
However what you would need to do is ensure that your son immediately signs a Declaration of Trust confirming that he holds the property on trust for both of you in unequal shares.
There is nothing that says that you have to disclose this to the Mortgage Company - but do make sure that it is done
Clare
Customer: replied 1 year ago.

Ok so I transfer it into his name using the mortgage company solicitor as it's cheap. Then get ourselves another solicitor for the declaration of trust ? and that's legal? Because tbh I'm dealing with morons at the bank, the building society etc.

Expert:  Clare replied 1 year ago.
Hi
Yes that is legal.
You will no longer have a legal interest in the property - but you will have a Beneficial interest as your son legally owns it for both of you!
However do think carefully about whether this is the best way to f=go - as if your son goes bankrupt or divorced there would have to be a sale
Clare
Clare, Family Solicitor
Category: Family Law
Satisfied Customers: 33507
Experience: I have been a solicitor in High Street Practise since 1985 and have specialised in Family Law for the last 10 years
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