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Clare
Clare, Solicitor
Category: Property Law
Satisfied Customers: 34105
Experience:  I have been a solicitor in High Street Practise since 1985 with a wide general experience.
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I jointly own a house with my long term partner, we are

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I jointly own a house with my long term partner, we are looking at options on what to do as we are splitting up. Neither of us can afford to buy the other out 100% so we are looking one of us remortgaging and giving a % of capital to the person moving out who would then retain a 17.5% stake in the house, and then when the house is sold that 17.5% would have increased in value so in essence an investment for the person to move out. However my partner is saying that on top of that investment if he were to retain a stake that then really there has to be a rental yield on that investment too, so if the house had a conservative £1000 pcm rental yield then it would be 17.5% of that, so £175 per month. This is what i'm unclear on, is this a standard practise? It seems a bit like double counting for me? Investment increasing with property value + rental money also? Things are amicable between us and i don't expect to be "stitched up" but this is new to me?
Submitted: 1 year ago.
Category: Property Law
Expert:  Clare replied 1 year ago.
HiThank you for your questionMy name is***** shall do my best to help you but I need some further information firstAre there any children involved?
Customer: replied 1 year ago.
No no children involved just the two of us, thanks
Expert:  Clare replied 1 year ago.
How much is the house worth and how much is outstanding on the mortgage?
Customer: replied 1 year ago.
The house is worth £310k with £126k outstanding on the mortgage
Expert:  Clare replied 1 year ago.
How much will you raise to pay him now?
Customer: replied 1 year ago.
Around £168k so still around a £40k shortfall as he has out around £13k more into the house - there's no way I can raise another £40k unfortunately
Customer: replied 1 year ago.
Put around £13k not out?!
Expert:  Clare replied 1 year ago.
Did he protect his extra investment with a Declaration of Trust?
Customer: replied 1 year ago.
No nothing formal he just put more in when he received an inheritance
Customer: replied 1 year ago.
Hi Clare - i haven't heard anything since the above question? Do you have any answers? Thanks, Sarah
Expert:  Clare replied 1 year ago.
My apologies - I did not get the response!The concept of "Notional Rent" is not an unusual one although in this case I am not sure that it is appropriate - may I ask - why are you not just selling the property?
Customer: replied 1 year ago.
Various reasons, one we aren't 100% sure we are 100% finally splitting up and also we are both very attached to the house as we spent years and money renovating it - it seems too final right now as a solution - maybe in the future after a rental period apart
Expert:  Clare replied 1 year ago.
It is an interesting argument.Your ex is looking at the fact that in general terms where one party is living in the property and the other is not then it is argued that the remaining partner should pay "occupational rent" in the form of the other half of the mortgage.This is based partly on the fact that the other party would not be able to obtain an alternative mortgage whilst tied to the former home.This is not the case in your situation.Your ex will be able to go and get another mortgage elsewhere, so his investment in the property is just that - an investment in respect of which he will receive a share of any enhanced valueHowever his argument will be that he could simply insist on a sale - so he is entitled to some extra compensation for thatSo there is "right"on both sides as it were - and the result need sto be a matter of negotiationI hope that this is of assistance - please ask if you need further details
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