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Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 34105
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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I am in dispute with my ex partner over the percentage of my

Customer Question

I am in dispute with my ex partner over the percentage of my property that he is entitled to. We made a draft memorandum of understanding 10 years ago when we agreed that he was entitled to 18% of the market value. We did not stipulate whether this was of the then market value or the current market value. I contest thaty because he has not paid the mortgage or maintenance and insurance for the past ten years that it should be 18% of the market value ten years ago.
However he is now demanding that in the absence of a legal agreement he is entitled to 50%.
I have recently had an offer on the property and found a property to buy. He has agreed to this move on the condition that his name go on the dead of the new property until we have settled on an agreement of percentages. I uneasy about his name going onto the deeds of a new property and unsure of the implications in the future. My son is 16 and will 18 in two years time. My ex partner is looking to have access to his percentage as soon as our son is 18.
Please canyou advise me of what my rights are in this situation?
Submitted: 2 years ago.
Category: Law
Expert:  Clare replied 2 years 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.
Has he paid maintenance for the child?
Clare
Customer: replied 2 years ago.

Yes he has paid the CSA rate.

Expert:  Clare replied 2 years ago.
Hi
Would you still be willing to give him 18% of the equity now?
Clare
Customer: replied 2 years ago.

Yes I would give him 18% of the market value of the property at the time of the draft agreement. He has paid absolutely nothing into the property since that time.This includes Mortgage,service charge and insurance, maintenance of the building, decorating and repairs. I also stupidly put a cash deposit of £28,000 down at the time of purchase and I paid £7,000 in the rental of a property while we looked for a flat to buy. I have paid for all works carried out on the property including repair of the boiler and windows and fittings such as curtains and carpet. He now has a two year old son with a new partner and this has definately influenced his change of mind mind on what percentage he now wants. I hope this helps.

Expert:  Clare replied 2 years ago.
Hi
I do not have good news for you I am afraid
The simple fact is that if the matter goes to court the percentage that your ex receives will be a percentage of the Current Market Value of the property at that time
This is on the basis that his capital has been tied up in your property.
I do not think that there is any risk that he will get 50% since it is clear that there was an agreement that he should receive less based on his lower capital contribution
I am not sure if you can pay him off now or not on the basis of 18%, but if not and you need to carry "his" capital into your new house then you need to ensure that there is a Clear agreement on what his percentage should be based on the relative figures, and that this is recorded on the Land Registry Documentation.
he will indeed be entitled to the return of the capital when your child is 18
I am sorry - do please ask if you need further clarification
Clare
Clare and other Law Specialists are ready to help you
Customer: replied 2 years ago.

Yes please i do need further clarification. Last year he asked me for an increase in the agreed 18% to reflect that he has had to wait for his money. I agreed to 20% of the previous market value.

Presumably He cannot force me out of my and my sons home when my son turns 18 in two years time and If I can't buy anywhere because of the high percentage he is demanding then it's not quite so straight forward. I cannot get a mortgage until I have at least two years self employed accounts to present showing a profit of £30K (I'm in my second year of self employment and have been unable to work much due to chronic illness.) So I don't have the money to rent either. Thanks

Expert:  Clare replied 2 years ago.
Hi
How much is the property worth and how much is outstanding on the mortgage?
How much does a smaller two bedroom property in the same school area cost to buy?
Clare
Customer: replied 2 years ago.

The property has had an offer of £550,000. There is £92,000 left on the mortgage. There is £25,000 debt attached to the flat and 2 bed properties in the school area in are £379,000 - £400,000. I have been looking for over two years. I recently found a flat for £379,000 and I proposed to my ex that he allow me to make the move and we sign a legal agreement to continue negotiating on percentages through mediation if necessary. I am very surprised at the offer on the flat because it is falling apart and I do not have the financial means to do anything to repair it anymore since I lost my job to illness. It needs a lot of money throwing at it and it is very clear to see this. Nevertheless the buyers fell in love with it inspite of this. They are a childless middle aged double income couple. My home does have huge potential for anyone who has money to put into it. But having struggled to hang on to it for the past ten years and to the detriment of my health I am tired and wanting to move to a smaller place so that I can build up my buisiness and have two years of accounts (to present my mortgage company) with the energy I save not worrying about the debts and the state of repair the flat is in. I asked my ex to consider that a move to a place that is in a good state of repair and likely to increase in value would be a way of keeping the capital safe rather than it decreasing as this flat devalues. He says he will only agree if I have his name on the deed of any new property.

Expert:  Clare replied 2 years ago.
Hi
I am sorry but your ex simply does not have to do this.
There is £425,000 equity in the property (give or take) and you need £390,000 to rehouse yourself and the child.
There is little doubt that a court will give him 18% of the CURRENT EQUITY - £76,500.
On that basis he could have portion of it now - and have the rest in two years time
If you wish him to re-invest ALL of his capital back into the property then his request to remain on the deeds is not Unreasonable
Clare
Customer: replied 2 years ago.

Thank you Clare. What have you calculated that figure £76,000 on is ? Can I check one more thing? If his name is ***** ***** deed of a new property and I release some of his equity at this stage, which I'd dearlt like to do if I can, and the rest in two years time ,what would the situation with the deed be ?Would it be simple to remove his name once this is done?

many thanks

Expert:  Clare replied 2 years ago.
Hi
I have based the figure on the current equity of £425,000
You will need there to be a clear agreement that he will Transfer the property to your sole name on receipt of the balance.
If you do release half of his equity now (give or take) then I would suggest that in fact he shoudl have a charge (a sort of mortgage) on the property for the balance - redeemable when your son is 18.
Indeed that should be how the matter is dealt with even if you do not release any capital now
Clare
Customer: replied 2 years ago.

Hello Clare. Please can you explain how a 'charge' on the property would work and what it is exactly. many thanks

Expert:  Clare replied 2 years ago.
Hi
It is a form of mortgage - without monthly payments.
So you will own the house; there will be a mortgage, and then a Second Charge on favour of your ex redeemable when your son is 18
Clare
Customer: replied 2 years ago.

sorry I still don't understand?It sounds like a guarantee?Please explain as if to a 10 year old start at the beginning so to speak. Also, If I buy another property there will not be a mortgage. Thanks

Expert:  Clare replied 2 years ago.
Hi
i am sorry - ok.
You are going to purchase a property mortgage free.
Some of your ex's capital is going to be tied up in the property.
That share can be protected by a "Charge" - in just the same way as the Mortgage company protects it's investment.
Since there is a Charge on the property you cannot do anything with it unless you first settle the "debt" to your ex - so he is fully protected.
The Mortgage will end when your son is 18 - at which point you will have to pay the loan back - just as you would have to pay the mortgage company back
Clare
Customer: replied 2 years ago.

Hi Clare. I see, thank you this seems like a good idea and I hope that my ex will feel this too as he should feel more secure. Thank you you have also helped me to see that he is not as bad as it has felt, just scared and in need of security. When I work this out definatively can I take moving costs i.e conveyancing, estate agents fees etc off the equity sum?

Thanks so much

Expert:  Clare replied 2 years ago.
Hi
Yes you can take all the sale fees into account
Clare
Customer: replied 2 years ago.

Clare many thanks you've been very helpful. Basically I can propose what you've suggested to him directly as my terms? He has a solicitor but I haven't because I don't have the funds and there is no legal aid for these matters. Best regards Caroline

Expert:  Clare replied 2 years ago.
Hi
Of course you can do that - make sure the letter is calm and matter of fact
Clare
Customer: replied 2 years ago.

I think that's it, Have I asked everything that I should? Sorry I'm just trying to be thourough. I can stand my ground on the 18% you think?

Yes will do. I feel calm and that's thanks to you!! Many thanks again, and all the very best to you Clare.

Expert:  Clare replied 2 years ago.
Hi
yes stand your ground on the 18% - and good luck
Clare
Customer: replied 2 years ago.

Many thanks again Clare you've really helped.

Customer: replied 2 years ago.

Hi Clare. I forgot to ask you. I have paid the insurance and service charge on the property in total £18,000 over the past 9 years, my ex has paid nothing of this or any of the upkeep of the property over the past ten years, i.e boiler maintenance, re-decorating, replacement of carpets, window repairs. Am I entitled to take this into consideration? Also when we bought the flat I put £28,000 cash down as a deposit, is there no hope of claiming this in my terms?

Expert:  Clare replied 2 years ago.
Hi
The reduced percentage reflects the fact that you put in the deposit.
Of the rest I am afraid that the only one you could claim half of is the iInsurance.
Clare