How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Clare Your Own Question
Clare, Solicitor
Category: Law
Satisfied Customers: 34906
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
Type Your Law Question Here...
Clare is online now

Good Evening, My Mother In Law has a mortgage on 2 properties.

This answer was rated:

Good Evening,
My Mother In Law has a mortgage on 2 properties. She lives in one of these properties and the other is an investment/BTL property.
She previously had a partner and things turned sour. He owns 1% of the BTL property and is approaching the age of 70. The mortgage company on that property has given a deadline of March to sell the property.
She is trying to sell this property and has a slae agreed - but the partner is refusing to sign the documents. He is now saying he wants more money and even wants a share of the property she lives in.
He has approached here through an accountant (no solicitor has been involved his side). my Mother in law has a solicitor who refuses to deal with this accountant as he is not a legal representative.
We are now thinking that it would be wise for my mother in law to gift the property to my wife and I and we could then get a mortgage for the small amount outstanding.
Are we able to do this bearing in mind her ex partner has confirmed he wants a share of this property? Would this be considered "avoidance"? I am thinking it would NOT be considered avoidance - as there is no legal case against her as he has not employed a solicitor and there is no current court case?
HiThank you for your questionMy name is***** shall do my best to help you but I need some further information firstWhat financial contribution (if any) did her ex make towards the property that your mother in law lives in?
Customer: replied 2 years ago.
Thanks Clare.He never made any contribution to the property she lives in but she drew equity out of the other property to purchase this one. This is the angle he is using to come after that one too.RegardsJamie
OkHow much are the two properties worth and how much is outstanding on the mortgage?
Customer: replied 2 years ago.
Hi Clare,The BTL/Investment Property is currently under a sale contract (awaiting this mess to be sorted) for £327,500. The outstanding mortgage is £137,000 which was the amount taken out of to buy the property my mother in law lives in.The property my mother in law lives in is worth £350,000 with £70,000 left on the mortgage.My mother's ex partner gave her (not a loan as no loan documents) £35,000 around 20 years ago to buy the BTL/Investment property which they purchased and lived in at the time.I guess we could step in and buy both properties off the mother in-law for outstanding loan balance and then pay back ex partner his £35,000 at 3% p.a. cumulative interest for 20 years by adding that to the loans we take out? But the way I see it - he gave her that money as a gift at the time and there was no mention of a loan. He would give her money occasionally whilst he lived in the property but this was very sporadic and she was the one paying the mortgages.Note - my wife also has a sister who we will speak to if we go down this path. We would ideally want us and her husband on both mortgages to avoid future disputes and make sure everything is fair.Hope this helps. Any questions - please ask.Jamie
How did he come to be a joint owner of the buy to let?
Customer: replied 2 years ago.
Hi Clare,One other query - my mother in laws current solictor put a deadline for the ex to reply as 22/12. We have passed that date now but his accountant has sent further correspondence.Wouldn't my mother in laws solicitor be able to force him to come to court by a specific date? I'm sure he can't stall that?We have found out from the mortgage broker that the mortgage company cannot repossess in March. there is a process that needs to be followed and the time you have after the due date caries by lender.My mother in laws lender is a building society who seem to be more lenient. So we have more time past March provided the mortgage is paid on time each month.Would you also please comment on any legal hindrances to transferring the title to us? I realise we may have to pay CGT if my mother transfers to us under current market value and then passes away within 7 years? What other tax/legal implications do we need to consider if we go down this route?RegardsJamie
Customer: replied 2 years ago.
Hi Clare,
They were seeing each other at the time and he gave my mother in law the £35,000 towards purchasing the property. They agreed that he would be 1% owner in respect of his contribution.
Customer: replied 2 years ago.
Hi Clare,I was wrong. I just spoke to my wife and upon taking financial advice that the loan would be approved with 2 people on it - my mother in law added the ex partner at 1% ownership.The 1% was nothing more that adding the ex to improve the chances of the loan being approved.Either way - I don't see how the ex can expect any more than the 1% he is entitled to.He has no loan documents etc stating that the initial money he gave my mother in law was not a gift.RegardsJamie
Customer: replied 2 years ago.
Hi Clare - any further comments or queries?
Sadly it id not as straightforward as that - I wish it wereDid they ever live together?
Customer: replied 2 years ago.
Hi clare.
They lived together in the BTL property when it was purchased. Then they both moved together to the property that my mother in law lives in now. He then physically abused her and they broke up.
Customer: replied 2 years ago.
Here is my mother in law's response regarding the living arrangements:==
It's difficult as we never lived together for any length of time. He came and went and lived in Ireland or his brothers for months on end. Sometimes I didn't see or hear from him for 6 months. My solicitor called it a 'transient life style'. And as he was not registered as paying any utility bills, rent or mortgage technically he was not resident. X
Sadly it is not a matter of saying that the £35,000 was not a loan as there is no loan documentation.The fact that the money was used to purchase a property in which they lived together - for however short a period of time, creates a possible argument that it was never meant to be a gift - and the fact that he was added to the title deeds backs this up - no matter what the actual reason was.On the plus side the fact that there is a Trust Deed setting out the percentage split will make it hard to for the ex to argue that his share should be higher - the court will look at what the Trust deed says and abide by that.However the real problem is that the joint house was then used as security to raise the money to buy the house in her sole name - and actually yes this certainly gives him a potential claim on her current home - not a large one since it could be argued that it must be limited to 1% of whatever proportion of the purchase price was covered by the mortgage - but a claim nonetheless.There is no basis on which you and your wife can take on either of the properties to try and avoid the problem - any such transfer can simply be reversed by a court if need be.If the ex will not sign the sale documents then your mother in law will have to apply to the court for an Order for sale - which will be granted - and at the same time the finanical entitlement regarding her own property will no doubt also be addressedI am sorry not to be able to give you the news that you wanted - please ask if you need further detailsClare
Customer: replied 2 years ago.
Hi Clare,
Thanks for your responses.I understand that he has a 1% claim on the BTL property they lived in as it can be argued his contribution was made on the understanding he gained 1% of the property value should it be sold.So just to clarify - because my mother in law then took out a £135,000 mortgage on the BTL as a contribution towards the house she now lives in (which the ex does NOT appear on the title) he can also legally claim 1% of that £135,000 i.e. £1,350?So if my thinking is right - he is entitled to 1% of the sale price of the BTL £327,500 i.e. £3,275 + potentially £1,350 as per above argument = £4,625?Is there any precedence in law (previous court cases) for him to gain more than this amount? What would be the brief list of arguments he could use to gain more?Thanks in advance for all your helpJamie
No I am afraid it is not that simple.
The fact the property he had helped purchase was then used to raise the money for the property your mother in law purchased gives him a potential claim on the second house
It could be argued that that claim would be a similar percentage claim - but on the full sale price - not just the mortgage
This is the world of the Trusts of Land and Appointment of Trustees Act _- TOLATA
there is an overview here
and here
Customer: replied 2 years ago.
I know this is your opinion - but what would he need to prove to claim more than 1% of sale price of both properties?
It is not so much what he would have to prove as what approach he would have to persuade the court to take
To claim more than 1% of the first house he would have to show that he did not understand the implications of what he agreed to - and that it was always understood that he would have a larger share
I think he would struggle
The second house will simply be a matter of legal argument.
Money from the joint house was used to purchase the sole house - does this create an implied trust and if so for how much.
That will be a matter for the Judge on the day
Customer: replied 2 years ago.
Thank you Clare for all your answers.Jamie
You are most welcome I hope all goes well
Clare and 2 other Law Specialists are ready to help you