Republic of Ireland Law
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1. This is quite a complicated set of facts for which more than one outcome is likely. Essentially, if you and your wife´s account of the situation is accepted, then you will get 50% of the equity in the house and you will be named as joint owners. However, if your mother´s account of events is believed, then she will end up with 100% of the equity in the house. However, given that you took out a mortgage and there is still a mortgage remaining on the house, which you now pay, your account is more likely to be believed. However, as litigation is hazardous, I cannot give you a definitive answer as to how the litigation with your mother will resolve itself. I would advise you to seek mediation and attempt to reach some agreement with your mother whereby the equity in the house and the annexe is divided between you and so that both your wife and mother can continue to live there. In the context of the litigation, you need to be careful that legal fees don´t eat up a lot of the equity in the house, with the result that it needs to be sold, simply to pay the legal costs.
2. My own view is that you will end up with a Declaration that you own half the equity in the house, but that the annexe belongs to your mother absolutely. I see the court dividing the equity in the house but allowing both parties to continue to live there. However, this view does not have the benefit of reading the case papers and examining the documents. So, if you hire a solicitor and barrister to defend the case, you should get an Opinion from them as to the likely outcome before you embark upon litigating the matter. They will have a more thorough view because they will see the Title Deeds, the Mortgage documentation and any other relevant material. One question which you will be asked is whether there was any written agreement made between you and your father as to what was going to happen to the ownership once the annexe was built.
3. I would also advise you to seek to reach some agreement with your mother as litigation is expensive. You should also consider whether it might be better if your mother and your wife lived apart, if relations between them have totally broken down. This might help in reaching a settlement of the dispute.
4. If you require any clarification, or if there is additional information you wish to share, I will be happy to assist further in the resolution of your question.
5. If your mother won´t engage in any meaningful mediation, then you simply have to fight it out in court. Ultimately, this means that legal fees will amount to a considerable amount of money. This might ultimately mean that the house gets sold as both sides will have legal costs. If you are looking for a solicitor, get one with litigation experience who comes well recommended by someone else who has been engaged in court proceedings. For a case of this nature, you will have to retain a barrister, so get the solicitor to chose someone who is up to the job.