Another one about lending family money.(27 Posts)
Ok, sorry if this is a bit long but I don't want to drip feed. Actually I'm pretty sure IANBU so, sure say if I am but it's more of a WWYD.
Two years ago my younger brother and his dw found they were expecting their third child and needed to move to a bigger property. They were renting but owned another flat which was let. They kept the flat, remortgaged and bought a house on the edge of their preferred location which meant the DC could stay at the same school. The house was a a good size having been extended but was in quite poor condition which they underestimated when they viewed it.
When they moved in we went to visit. There was a terrible smell of drains in the kitchen which was also in very poor and filthy condition. There were rats in the garden and the entire property was in need of work. Luckily Db is very good at DIY and intended to do it himself. As I say, he has totally underestimated what needed doing and had no budget at all.
My dh said afterward he would like to help them out so I approached another much wealthier db and discussed it. He wasn't that keen but agreed to help. So, we talked to younger db and his dw and agreed to give them £5k and lend them £10k from each of us, so £30k in total. We had it in writing etc as I've read enough threads on here... They were delighted. We told them we hoped it would cover kitchen, bathrooms and Windows and offered to help with advice as we've done a lot of work over the years.
After a slow start a new kitchen was installed and the drains sorted out. Then the baby was born so there was a hiatus. I was a bit surprised when a decorator was called in to paint the kitchen since that's clearly DIY but didn't say anything. Then, well nothing. After months and months dsis took the DC away and the family all pitched in and a lot was achieved in a few days, great. Then nothing.
Eventually in January this year I asked my db outright what was happening ( he's the master of evasion) and he admitted that he'd spent £6k on mortgage payments while dsis was on mat leave. I told him I wasn't happy but hey, hopefully he would get on and use the rest to do the Windows or something. Next thing I know they've booked a big holiday. Not a luxury one, a travelling on the ground sort of thing. Still expensive. They had a fabulous time and plan to do more. Dsil is also from another country so they visit at least once a year, fair enough but expensive.
I've asked db why he's not getting on with stuff himself and apparently dsis doesn't like family time to be spent on dull old DIY. . He uses all his very generous leave doing trips with the DC, never any house stuff.
Now I've heard from my DM that they are remortgaging, presumably to get out of debt. I want to ask for our £10k back because I hate watching them and feeling resentful. If it's not our money they can do whatever they like but as it is I can't help feeling this way. We aren't wealthy and could use the money on our own DC who care young adults. Trouble is, if I ask for it back they will be in even more debt.
I got it wrong. I imagined they would have the same priorities as me and use every penny as well as possible to get the house in good shape. They don't care that much about the house and want to do exciting stuff with the DC.
I'm going there later. Should I try to talk to dsil and say any of this? I would welcome other viewpoints. Thanks and sorry for the length of this.
I can see why you're annoyed. I don't know what you could do about it though. They don't sound like they're very good at budgeting, or project management.
If you have it in writing, what are the repayment terms? Sounds like a nightmare situation!!
What a fucking nightmare. I'd consider this money gone forever.
Depends on how clear you made it that it was to be spent on the house. What was the repayment plan supposed to be? If they haven't stuck to that then I think you can ask for it back.
I suppose you could also ask for some back proportionate to what they spent on the house, if that was a condition of loaning it. But they won't like it. Is it worth the fall out?
Did the original agreement include when and how they planned to pay the £10k back? Could it be coming out of the remortgage?
If they are taking the view that they will pay back the £10k after they have had the kitchen, windows and bathroom done and then not actually getting round to doing them, then they are clearly taking the piss.
It is also worrying that they are remortgaging as that suggests that they will have less money available in the future to fund the work and pay you back. If they don't pay you back out of the remortgage, they need to set up a payment plan, but I fear this will be difficult because £10k is a lot of money and how much can they afford to pay each month?
However, they aren't unreasonable to not want to do the work on their house. DIY and house renovations are boring as shit in my opinion and I too would rather have holidays and hobbies instead, which is why it has taken us 10 years to get round to a much needed extension of our house and we are currently just finishing off a few bits before we will take a long rest from this type of thing, despite the rest of the house being well overdue for painting (it was done when we moved in 10 years ago and hasn't been touched since), the bathroom needing updating and the drive needing doing properly. New windows too probably.
I think as long as they stick to the repayment plan you've agreed you should keep your opinions to yourself. Unless it was written into the 'contract' that the money had to spent on house refurbishments (and that they weren't allowed any family holidays, days out...)
When and how are you getting your money back from them. I think you and your Dh need to ask them when they plan to repay and how.
They shouldn't be having holidays or other big treats until they have paid you back.
If they're not prioritising getting the work done, they should be paying you back within a reasonable amount of time, which isn't going to be quick - even at £500 pm it would take nearly 2 years and who knows if they can afford to pay that much?
This is not ok. Too many excuses, maternity, new baby, mortgage payments, dsil family abroad, family time being a priority, not diy.
You gave the loan on the understanding it would be used for home improvements, not holiday arrangements.
Speak to your brother, say to him that as he is remortgaging please factor in the loan you gave as you need the money back. You dont need to explain why, its your money, you could have spent that on yourself and your dc, not watched him and his family go off on jollies. Bloody ridiculous.
I don't think you can ask for the £5k back unless you specified it was to be spent on the house and I expect they would say it was spent on the Kitchen which I guess has been done. What was the repayment arrangement for the loan to be? To be honest I would never lend money to friends or family as you have found out they do not always have the same priorities about how to spend their money as you. If they feel holidays are more important than diy/home improvements I would not have an issue with that as they have to live in their house and to a certain extent I can understand that with 3 young children so I am puzzled as to why you would deprive your DC to gift to your DB instead. Fair enough if it was spare money you would not miss but that is obviously not the case.
We have gifted money to our DC with express instructions as to what it is for (house deposit, car, grandchild, home improvements etc) and some we have gifted without instructions and left it up to them. The difference is we don't expect it back.
I would get some sort of repayment plan in place now for the £10k you lent them and if they go further into debt that is their problem. Maybe they should have thought a bit more about the house they bought in the first place. They can always sell their btl flat so they won't be destitute and if they have lived in a dump for a couple of years they can do it for a few more. Not your problem. I would say though if your DB is master of evasion then getting your money back may not be that easy.
Yes, definitely, ask for the money back when the remortgage comes through. I understand you're wealthier and obviously very generous. I really am surprised as you would help people out when they have a btl property. So both of you gave 5k - wow and lent 10k. It's a real shame you handed over the money outright and not in stages. Sadly, we cannot assume others will react the same as us or have such high principles I, too learnt the hard way.
Is the contract definitely legally binding? Do you have a repayment plan? And how far are you prepared to go to get the money back? I think I would decide this before asking for it back as you may be in for a stonewalling - things can get ugly. What's more important? Family or the money.
I meant the 10k. The Gift of 5k x2 I assume would have been spent on the house for the works you describe perhaps?
Unless people have an agreement in writing drawn up legally and are willing to go the full hog and take people to court or whatever you do to try and claim back money I have no idea why people lend money ever.
Ask for the money, I doubt you will get it back. Do not however blame his wife for the trips etc he is I assume an adult with free will.
My sisters are relatively hard up but I have done stuff like buy them a fridge freezer and prescription season tickets and paid for holidays. That is the only way to assist if you want to assist and have strong feelings on how money should be spent, a direct purchase that you the benefactor approve of. We bought MIL a car last year, rather that than give her the money.
It's a really weird thing to be substantially better off than your family. Our lot know we are comfortable but have not a clue how much we have really and that's how it needs to stay. when they discuss stuff like how they would manage if they spilt up with their husbands I sit there thinking I would just buy another house outright.
The way we worded the written agreement was that £5k was a gift and £10k a loan. We said that we would expect to be repaid when they sold the house but reserved the right to ask for it back sooner but did not expect to need to do this. Foolishly it just never crossed my mind that they would spend it on anything else. I did ask them to keep the money separately from other money but felt that staged payments or coming to me with bills was a bit controlling.
To be clear there is no way we would take legal action, I'm just very fed up about this. We really wanted to help and it was enough money to get the house really nice. Instead the house, other than the kitchen is much the same and the money has gone elsewhere. Other than this we really are very fond of them and have a nice relationship.
The btl doesn't make any profit but has equity. Because they have no pensions to speak of they wanted to keep it.
I guess we will get the money back when they sell and I should just live and learn.
I don't think you can really lend money with terms and conditions like that - how do you control what someone else spends it on once you've given it to them?
I'll never understand why people keep loaning out money, especially to friends and family. Never loan money unless you can afford to lose it completely.
What is the repayment arrangement for the £10k? If that is being kept to I don't see problem you loaned them money as long as they pay it back they could blow it all in black in Vegas. If they are not sticking to the repay,next schedule then yes there is a problem.
or is there no repayment schedule just vague promises? In which case put a repayment schedule in place
Stop rescuing family members and don't get over involved in their lives and what they spend their money in. Just get the loan repayments sorted. You may need to be a bit tougher about this.
Good luck, you were very generous.
I suppose people lend money because they want to be nice and helpful like the OP has been here, or the borrower has a sob story and they don't expect their friends and family to take advantage by not paying them back as agreed.
Borrowers often pile on the emotional blackmail or call the lender a big fat money grabbing meanie if they don't oblige.
OP, you say the agreement was 'for the money to be repaid when they sold the house' - is that the house they live in? From what you have said, it sounds like your DB won't expect to have to repay you and would have taken your reservation about possibly wanting the money back sooner as not really very likely.
In that case, your only issue is more that they are living in a house that hasn't been done up as you would have hoped and I think you have to accept that they have different priorities than you about what to spend their time and money on.
If you need the money, you could ask them if it is possible for them to repay when they remortgage?
You offered them money having decided what they should spend it on, they didn't come to you asking for money for one thing then spend it on something else. If they needed it to make mortgage payments whilst they were short then so be it. If they are happy about having sorted out the most pressing jobs in the house and enjoying family time instead of other things then that's up to them. People have different priorities.
If you wanted them to spend it on something specific then you probably should have paid for the kitchen or bathroom or whatever.
Hmmm YANBU exactly but I don't really think there's much you can do at this point. In hindsight (which is obviously always 20/20!), you should have stipulated that the money was for house renovations only and put a repayment plan in place rather than just asking for the money when they move - what if they stay there for decades?
At this point, I think you have 3 options:
1. Put up with it and ask for the money when they move as originally agreed.
2. Have a heart to heart with your DB and SIL together. Explain that what you lent them was a big chunk of cash for you and you've made sacrifices in order to lend it to them. You were happy to do this when you felt it was helping them out of a mess, but it's leaving a bitter taste in your mouth to watch them spending on holidays etc. when the house is still unfinished and you've had to go without things to facilitate it. Ask them to provide a plan for how any remaining money will be spent.
3. Don't get into a big discussion, just tell them that your circumstances have changed and you will need then to repay the money ASAP. You could always offer to let them pay in installments.
The rule with "lending" money to family is don't lend it unless you are prepared to wait a loooong time (if ever) to get it back.
You say the original idea was they repaid when they sold the house, which could be years away in reality. What seems to be pissing you off is that they appear to have frittered the money away on things like travel instead of doing the house up.
How much do you want to fall out with them? If you have something in writing you could go down the legal route, or you could try asking for some repayment now, even though you originally said they could repay when they sold.
Be careful, this type of argument over money can tear a family apart, do you really want that?
I can understand why you are fed up about it, but think carefully before taking action
if you are relying on getting that 10k back anytime soon I think you are whistling into the wind
they have a flat with equity and a tenant
family lending and giving money
but they are still struggling with mortgage payments and re-mortgaging? But having expensive holidays? All sounds very strange to me.
I'd have difficulty maintaining a relationship as it were under these circumstances - I would lose all respect.
Thanks everyone. I deliberately didn't request a payment plan because they couldn't afford it. My wealthy db did ask for £100a month, which to him was like the smallest possible amount he could imagine. The reality is/was that they struggled with it and we're pleased we didn't ask the same.
We were OK with it being a long term thing so yes, the only thing I'm pissed off about is that we've funded holidays and daily living rather than spending which would have been an investment for them as well as getting the house up to scratch. I feel bad because dh suggested all this and I feel he's been pretty let down.
I'm going to ask if they have any plans for further works and take it from there. It's on my mind because I know they are remortgaging now so it's a bit now or never.
Whatever, I'm still glad we did it
sort of just a bit sorry they've wasted the chance to get the work done. When we were first married our house was in need of a lot of work and we had to wait so no doubt that clouds my view but isn't on their agenda.
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