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Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 33953
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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My girlfriend and I both sadly lost our parents within a year

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My girlfriend and I both sadly lost our parents within a year of each other, mine both in 2011 and her remaining parent, her father in 2012. The proceeds of the inherited estates were used to pay off my existing mortgage (for the house we both lived in for 10 years, both of us working and both contributing to bills and mortgage repayments) and some loans and credit cards. This allowed us to move out, rent out the property and buy a separate renovation project for £300k between us. This new property purchase was bought in our joint names and we both contributed to the purchase from the balance of our inheritances as well as some savings. Since 2010, I have been the only one earning money and paying bills. We stayed in the renovation project for 10 months when the relationship broke down and I moved out at that point we had spent a further £110k on the property funded by a joint offset mortgage which acted like a loan that you could draw down on and repay at will. As the rented property was solely in my name and in my haste to get out and settle amicably, I agreed to clear down the £110k by getting a landlords mortgage on the rental property, leaving the facility open between us so that she could do the remaining renovations, sell, clear the mortgage in the process, and move out. The reason for leaving this facility in the joint names was because she would find it hard to get a mortgage cheaply and because the property was in joint names. I don't think this was a smart move as I calculated I was £50k out of pocket and have since discovered that the property is being subdivided and sold for a substantial profit. I wonder if I'm entitled to recover my £50k from the sale of the renovation property as we are joint owners? Can she fight this? There is no contract, written agreement or deed of settlement between us, just conversations. Finally, as the property is in joint names, can she quietly sell and exclude me from the payment? Thank you.
Submitted: 1 year ago.
Category: Law
Expert:  Clare replied 1 year ago.
Hi
Thank you for your question.
My name is Clare
I will do my best to help you but I need some further information first.
How much are the two properties worth and how much is outstanding on the mortgage(s)
How much did you each inherit?
Clare
Customer: replied 1 year ago.
The property we lived in was 145k, now mortgage free, the property bought as a renovation project was 305k. My partner inherited 278k (being the sale of her fathers house overseas) and some cash - circa 50k. I inherited a house worth 240k and circa 80k cash. As said in my original post, we both settled the mortgage on the property I own 50/50. The remaining mortgagee amount there was 90k.
Expert:  Clare replied 1 year ago.
Hi
Sorry - I thought you had been persuaded to take out a further mortgage?
Clare
Customer: replied 1 year ago.

that's right, we settled the mortgage on the home we lived in, moved into the renovation project, spend all of our money and then got a 110k offset mortgage on this renovation project and spent all of the money on paying the stamp duty and a lot of building works. I settled the 110k offset mortgage by mortgaging the home we had recently vacated using a commercial "landlords mortgage". I hope this is clear, let me know if there is anything else ambiguous.

Expert:  Clare replied 1 year ago.
Hi
Sorry
How much is outstanding on the mortgage you took out to settle the offset mortgage?
Clare
Customer: replied 1 year ago.
Hi Claire, it's around 106k. Best regards Andrew
Expert:  Clare replied 1 year ago.
Hi
Right - so what is the current value of each of the properties?
Clare
Customer: replied 1 year ago.
Propert we both shared (but I own) circa £145k
The renovation property circa £400k
Expert:  Clare replied 1 year ago.
Hi
Right thank you for that.
So you have equity of £35,000 or so in the property in your name and the joint property is worth £400,000.
How much do you want to receive from the second property?
Clare
Customer: replied 1 year ago.

Yes the joint is worth 400k at last estimate with the 90k offset mortgage attached. The income from the previous property is 600/mth.

Expert:  Clare replied 1 year ago.
Hi
How much do you wish to receive from property two when it is sold?
clare
Customer: replied 1 year ago.
I'm still trying to calculate it but as my partner didn't contribute to the household bills, mortgage or costs of renovation I.e. The 110k loan, this figure is complicated. Back to the original question - would I be entitled to anything and what determins that?
Expert:  Clare replied 1 year ago.
Hi
Sorry - slight confusion again.
I thought the mortgage now attached to property one not property two?
Clare
Customer: replied 1 year ago.
That's right, the mortgage on the Reno project was cleared and the monies to pay it down were taken from borrowing against the previous property in a commercial mortgage, the facility on the Reno project was left open in king names so my ex could use it to make the final works complete. The facility is open as an offset mortgage.
From my original question "I agreed to clear down the £110k by getting a landlords mortgage on the rental property, leaving the facility open between us so that she could do the remaining renovations, sell, clear the mortgage in the process, and move out."
Expert:  Clare replied 1 year ago.
Hi
Ah I see - thank you I was confused.
legally the starting point is that you are entitled to all the equity in property one and half of the equity in property two
Given the substantial financial contribution that your ex made to property one this may be a reasonable outcome.
Since your name is ***** ***** deeds of property two there can be no sale without your knowledge and involvement.
Your ex would be hard pressed to object to this division as it appears to reflect accurately enough the financial contributions that you have each made - although she will no doubt argue that she should have a larger share of the equity in property two to reflect her investment in time
I hope that this is of assistance - please ask if you need further details
Clare
Customer: replied 1 year ago.

Thank you for the answer. Could I ask you to clarify what you mean by this: "legally the starting point is that you are entitled to all the equity in property one and half of the equity in property two
Given the substantial financial contribution that your ex made to property one this may be a reasonable outcome."

If my ex has made a equal/substantial contribution to property one, that is to say if the property is worth 145k and she put in half that over the course of the relationship, is it right that I would be entitled to half of property 2?

Have you come to your conclusion by calculating what we have each put in or is it just that joint owners are entitled to an equal share of each property? If it's the former, I would need to work on what each of us contributed and my record keeping is very good, I don't think hers would be.

Does the fact that I was the only breadwinner for several years also have a bearing on the settlement?

Thanks in advance.

Expert:  Clare replied 1 year ago.
HiProperty one is not worth £145,000 as there is a £110,000 mortgage on it.Given all the contributions she made over the years on a monthly basis and the fact that she paid off half of the original mortgage there is no doubt that if your ex made a claim against property one she would be successful and would be entitled to up to half of the equityHowever since it was remortgaged to help pay for the work on property two it would seem reasonable for you to keep the extra £15,000 to reflect your initial investmentProperty two is held in joint names.Unless there is a Declaration that the property is held unequal shares then you are each entitled to half of the equity.To change that your ex woudl indeed need to show that there were unequal financial contributions and an agreement that she would receive a larger shareClareThe fact that you were the only one out of work is of little relevance where property two is concernedClare
Clare, Solicitor
Category: Law
Satisfied Customers: 33953
Experience: I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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