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Clare, Solicitor
Category: Property Law
Satisfied Customers: 35088
Experience:  I have been a solicitor in High Street Practise since 1985 with a wide general experience.
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My sister and I bought a leasehold flat together as a buy-to-let

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My sister and I bought a leasehold flat together as a buy-to-let investment in 2013. She provided the required deposit and I secured the mortgage in both our names. We were equally liable for all expenses, but we did not draw up a written contract to state our 50/50 shareholding. After the purchase, my sister insisted that her daughter (my niece) moved in temporarily, and she would pay enough rent to cover the mortgage. I had agreed to this as it was supposed to be for just a few short months, even though we could have earned 20% more had we let out the flat normally. Unfortunately, my niece ended up staying at the flat for nearly four years and paid the same rent throughout. I even had to contribute towards the mortgage shortfall as premiums went up because my niece would not agree to increase the rent, and my sister could not afford to contribute. I paid around £10,000 over the four year period to cover such shortfalls.
My niece has just moved out, and my sister and I are no longer on speaking terms. She has decided that she wants to sell the flat, but claims that because she provided the whole deposit, I should not be receiving anything from the proceeds of the sale. She says if I do not agree she will lodge a ToLATA in court. Personally, I would like to be able to buy the flat off her, based on current valuation and as an equal shareholder, which is what was agreed when we bought the flat. I also would like to be compensated for moneys that I had spent towards the shortfall, and for moneys that we could have received had we let the flat normally. What rights do I have?
HiThank you for your questionMy name is***** shall do my best to help you and I will do my best to help youHow much is the flat worth and how much is outstanding on the mortgage?How much was the depositClare
Customer: replied 2 years ago.

As requested:

The Purchase price was: £260,000

Deposite: £70,000

Current value: £380,000

Mortgage outstanding: £180,000

What was the original agreement regarding her payment of the deposit
Customer: replied 2 years ago.

Our agreement was that the flat would be equally owned by the both of us. My sister raised the deposit by re mortgaging her house, the buy-to-let mortgage was secured by me submitting accounts as proof of income, plus I contributed between £300 to £1000 per month via bank transfers into my sister's bank account from where mortgage premiums were being paid.

HiHow was her investment meant to be protected?Clare
Customer: replied 2 years ago.

I do not have anything in place, and I don't think my sister has either as it was a repayment mortgage.

Was the fact that she was paying all the deposit not discussed?
Usually the agreement is either that the deposit paying party gets an extra percentage of the equity - or the deposit back prior to division?
Customer: replied 2 years ago.

We did discuss it, but as without her deposit nor my set of business accounts we could not obtain a mortgage, and that this was supposed to be a long term investment to take us into retirement, and that we were sisters and very close, we always assumed a 50-50 ownership.

Sorry - how much is currently outstanding on the mortgage?
Customer: replied 2 years ago.


Since there is no Declaration of Trust stating anything else at present the ownership of the property is 50/50.
However if your sister does take the matter to court it is possible that the Court will take account of her contribution to the deposit - and of your payments over the years and order an unequal division of the equity - either with you and your sister each recovering your lump sums with the balance being divided equally between you or by adjusting the percentage division
This will of course cost extra money in court fees and delays.
It would therefore be wise to suggest to your sister that you try and resolve the matter using Mediation to avoid unnecessary costs
I hope that this is of assistance - please ask if you need further details
Customer: replied 2 years ago.

Thanks Clare, that's very helpful. Just a final note:

My sister won't even return my calls and wants to only go through her solicitor. Her solicitor insists that a mediation is unnecessary and states that "there is nothing that cannot be said by Email"!

So, shall I wait until they have lodged a ToLATA or shall I initiate it myself? How much does ToLATA cost? ....and can I claim costs if I win?

Many thanks.

I suggest that you write back" I am surprised at this approach given that the first question the court will ask is whether or not mediation has been attempted.I remain willing to mediate on this based on the following options....."Then list one two or three options based on the guidelines above!
Customer: replied 2 years ago.

Thanks again Clare, I am only saying this because I know my sister will refuse mediation. (I refer you to the question you helped me with on the 2 June 2015 on this very site regarding my ongoing issues with my family).

So, shall I wait until she has lodged a ToLATA or shall I initiate it myself? How much does ToLATA cost? ....and can I claim costs if I win?

I would let her pay the fees up front - you can always claim costs later!
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