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F E Smith
F E Smith, Advocate
Category: Law
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Experience:  I have been practising for 30 years.
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I am planning on leaving my partner but we own a house

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I am planning on leaving my partner but we own a house together. I put in most of the money towards the house but signed to say that we own it equally. Her adult son lives there and earns around £21k a year. It's unlikely that she would want to sell as her parents moved up the road so we could help look after them as they got older. How does buying someone out of a property (I.e. my partner's son buying me out) work and what do I do if they don't want to do that? I don't want to be stuck in a situation where I'm paying the mortgage for a house I don't live at but I also don't want to lose all the money I put into the house.
Assistant: Where are you? It matters because laws vary by location.
Customer: I live in the United Kingdom
Assistant: What steps have you taken so far?
Customer: None. I wanted advice before I do this so I know what to expect/where I stand
Assistant: Anything else you want the Lawyer to know before I connect you?
Customer: No

Good morning. I will assist with your question - be aware this is an email not chat service therefore i maybe delayed in replying.

so you didnt get a written agreement as to your financial input if you parted later on?

have you had valuations lately?

would she be able to pay you your market share?

are you prepared to force a sale?

Customer: replied 4 days ago.
That's fine, thank you for getting back to me.

No, she pushed me to say we put in half each (which I was hesitant to but eventually did to make her happy).
The most recent valuation was around £280k (we bought it for £267k) - that was when we remortgaged last year.

Her and her son would be able to afford to take over the mortgage, yes. This is what I would prefer as long as I get my money back. Even if I just got back what I put in I would be happy.

I don't particularly want to force a sale, I care about them a lot and want to make sure they're secure, it's just that our relationship isn't working anymore. However if I had to and had no other choice then it might get to that point

Thanks

The first thing you do is agree on who is buying who out for how much money.

The person doing the buying then needs to ascertain whether the existing lender will allow the seller to be removed from the mortgage or if they will not (commonly) the person doing the buying out needs to arrange a mortgage with another lender.

 

The situation with regard to how much money is not particularly favourable if you put a lot in and the other didn’t and there is no agreement.

 

If 2 people own a property are not married and there are no children and there is no agreement to the contrary as to what will happen when the property gets sold, then it is split 50-50. It doesn’t matter what each person puts in by way of deposit and what each person puts in over the period of ownership, it split 50-50. It does not matter that one of them pays all the mortgage and puts all the deposit in and the other one sits by and does nothing but drink tea, it is split 50-50.

The courts have decided that if a couple are buying a property together they would have an agreement if they were putting different amounts of money in and wanted money out in proportion. They would safeguard their “asset” by putting it in writing.

Relevant case law is Kernott v Jones.

I will say that I don’t agree with this decision but I don’t make the law, I just regurgitate it. The case does go on to say that if the couple were living in the property and one party moves out, then any contributions to the capital or fabric or improvements of the property, after that person moved out but which were made by the one remaining, will be taken into account with the final division of assets from a sale of the property.

What the case law goes on to say is that any contributions to capital (not interest) and any maintenance or payment towards the property other than the mortgage, after a couple split up will be taken into account in the division of the assets. The reason it all isn’t taken into account is that if you have the benefit of living in the property then you have the burden of paying the mortgage.

Not relative to the case law but if either party wants the property sold, then the reluctant non-sale wishing party can be taken to court for an order for sale under the Trusts of Land Appointment of Trustees Act s14 and they would usually get the order against the reluctant seller and get caught and solicitors costs also awarded against the reluctant seller. If anyone ever threatens to apply to court for an order for sale, my advice to the other party is to get the estate agents sign up straightaway.

Meanwhile, a person is not responsible for the mortgage or the bills of a house that they do not live in although they remain liable to the lender if the other co-owner stays in the property but doesn’t pay.

 

However, that all depends on whether either party decides to be ethical and have what they feel they are entitled to based upon what they put in, rather than simply what the case law says. You can agree what you like between you.

 

If she can’t afford to buy you out, then no one can be compelled to continue to own a property which they no longer wish to own and they are able to force a sale through the courts if necessary.

 

 

The remedy is to make an application to court for an order for sale under section 14 of the Trusts of Land Appointment of Trustees Act (the Act).

Anyone wishing to sell may find that a strongly worded letter from a solicitor threatening a court application and an application for costs, may focus the mind without actually having the need to get to court.

If I were advising anyone who has received a letter threatening an application to court under the Act and an application for legal costs, I would tell them to get the agents sign up immediately and cooperate with the sale because if they make the court application, they are likely to get it and they are likely to get costs awarded against them.

 

 

If her son is over 18, he is out of the equation except to say that he could possibly buy the house with her if her income is not sufficient for lenders purposes.

 

 

 

Can I clarify anything else for you?

 

I am happy to answer any specific points arising from this.

 

Please take a moment to look at the top right-hand corner of the page and rate my service by clicking one of the stars at the top of the screen.

 

You may need to login again to use the rating service. Although it says "rate to finish" it doesn't close the thread and we can still exchange emails.

 

It's important that you use the rating service because that gives me credit.

 

It doesn't just give me a pat on the head! It's what gets me paid!!

 

There is also an experts incentive scheme whereby the more 5 star ratings I get I do actually get a pat on the head!

 

All you need to do is press Submit.

 

Thank you.

 

If you still need any points clarifying, I will still reply because the thread does not close.

 

Best wishes.

 

FES

 

Customer: replied 3 days ago.
Hi there, thanks so much, this helps a lot. I was worried that if she refused to sell or buy me out that I would be stuck paying it forever.
Can I just ask, would she need to get a new mortgage for the current price of the house so I would get my share of the current equity plus half of whatever has been paid off the mortgage?
I will give you that rating so you get the biggest pat on the head possible

Thank you again (:

Take the mortgage and the solicitors fees of the topline first.

Then you divide the proceeds in whichever way you like and either you buy her out or she buys you out. It’s mathematics not legalities.

She would need to get a mortgage for the full amount of the current mortgage plus any fees if she is not paying them out of the bank and of course in addition she needs the money to pay you off your financial equity.

Customer: replied 3 days ago.
Alright, thank you. Is it possible to do it without solicitors etc etc as obviously those are massive fees on top if we can sort this amicably

No one can be compelled to use a solicitor and you might want to avoid the bloodsucking leeches for everything except the legal transfer of the property. Although you can DIY that yourself, if the lender is involved they will insist that you use solicitors but use a conveyancing solicitor not a family/divorce/relationship solicitor who will try to get money out of you arguing that one of you is entitled to more than the other.

Financially, you can agree what you like between you without involving the bloodsuckers.

 

I am glad to help. Please don’t forget to use the rating service because it means that I can continue to provide affordable and timely legal advice to people with similar problems.

Although it says "rate to finish" it doesn't close the thread and we can still exchange emails.

You may need to login again to use the rating service.

Thank you.

Best wishes

F E Smith and 2 other Law Specialists are ready to help you
Customer: replied 3 days ago.
Thanks so much. It's very much appreciated. I hope you have a great day (: