What is reasonable and fair? To buy 'in' or not to buy 'in'?(130 Posts)
Really impartial advice needed hence the impartial bullet points below.
So...Two adults have lived together (not married) for the last 6 years.
* Adult 1 - owns the house, following divorce, pays small mortgage & running costs of house. Equity in the house of £230,000. Has lived in the house for 15 years. Has 2 adult DC's, who lived in the house as children, now at uni.
* Adult 2 - pays food costs and 'treats'; tv packages, holidays, trips out, weekends away. Has 4 adult DC's.
The house is being renovated.
*Adult 1 wants to remortgage in one name, to do the refurb.
*Adult 2 wants to pay for the refurb and be legally entitled to a share of the house (proportionate to contribution)
* The value of the house will increase once refurb is complete.
*Adult 1 is concerned about security and independence; horrible divorce (a long time ago) not sure of jointly owning the house even in small proportions
*Adult 2 wants to feel the house is shared, with joint decisions taken. Adult 2 wants this to be a family house for all DC's and GC's.
* Adult 1 is unsure of adult 2's DC's and their attitudes to money.
Adult 1 and 2 love each other very much and are very happy!
Wow! Happy to answer any questions in return for your thoughts on resolving this.
I think if this is a permanent relationship then it’s sensible to own a percentage each of the house.
If not so permanent then it’s best for adult 1 to be the owner.
If I were adult 2 I would be unhappy with adult 1!
Does adult 2 have sufficient income / savings to buy a small investment property? Then they have an asset but there's not the potential for complicated calculations splitting the main property.
I can see both perspectives, but perhaps the issue is that adult 2 hasn’t wanted to contribute/have a share until the renovations?
Does adult 1 want to marry and adult 2 has resisted?
Is adult 1 fully aware of how adult 2 having a share of the house might impact on their own equity? Are they thinking it’s worse than it is? Are they trying to protect DC inheritance?
So adult 1 has £230k equity owns the house live their 15 years is their children's home and now wants to remortgage to make improvements
Adult 2 has moved in, wants to make a contribution to the home via home improvements for an equity share and have their children consider it their home?
So Adult 1 wants to remain in control should the relationship break down and still have a safe and secure home
what does adult 2 see happing in the future? Marriage? What would happen to the house should you split?
What did person 2 do with their own house when they moved in?
Was friends did was:
Person 1 and person 2 sold own houses.
Person 1 and 2 bought a house between them with a small mortgage. They put 50% one can and paid 50% mortgage.
Person 1 who had more equity bought another rhos sonly n their name- in cash which they rent out.
That seems fair.
So in your case. You buy him out of the house by having/paying a much larger part of mortgage. He buys a smaller property as well in his name for cash.
I can see both sides but as adult 2 I'd be questioning the relationship if adult 1 wasn't concerned about my security.
6 years is still a fairly short relationship. I wouldn't want to give my home away if I was adult one, but I wouldn't be moving in together if I was adult two. I'd be securing my own future.
Thank you for the above.
To answer the above:
* Both work full time in £50,000+ jobs, adult 2 earns more than adult 1
* Adult 2 has cash enough to pay for some of the refurb
* Adult 1 is spending £100,000 of saved money on the refurb but would need to remortgage to complete and refurnish, buy new appliances etc.
* Adult 2 would get married; adult 1 wants the long term but isn't necessarily eager to marry. ( due to marriage and previous marriage breakdown, not due to this partner)
* Adult 2 couldn't buy a second house outright but could with the help of a mortgage ( but is reluctant due to advise that buy to let isn't necessarily the best investment).
Hope that helps.
Oops cross post and missed one!
* Adult 2 took a cash share of the family home on divorce
* Both adults have spent 2 years looking to buy a new house together but couldn't find anything; adult 1 was keener to do this to provide a more neutral 'family' house for all DC's.
* Refurb is well underway.
Adult 1 would be nuts to give over half of the house. By the sounds of it, they live in an expensive area and they could both, end up having to share the house if they split/one dies, or have to move out of the area.
Adult 1 can make a proviso in their will that adult 2 can live there after their death.
Adult 2 needs to look into what is the best investment, but, buying a house would be a good plan.
if an older couple get together, who both have children to other people, it is fine not to buy into property together. it is in no way a reflection of their relationship. should they die, it no longer becomes about them.
For the sheer amounts involved I think they need legal representation, separately.
If 2 paid for the renovation, would they own the first £100k of the house, or the proportion? e.g. if it ends up being worth £500k, 20%. Should they continue to contribute to the "small mortgage" to be entitled to a share of any profit?
If they did own it in proportion, say 4:1, and 1 predeceased 2, then would it have to be sold to pay IHT? Would each partner leave their share to their children? Relationships can sour, especially when people start seeing dollar signs.
I think it's potentially scary on both sides. It might be more prudent for 2 to invest on their own, elsewhere.
Let me take a wild guess...... you are adult 1 😂
Neither is being unreasonable but if I were you I’d want to keep the house in your own name.
Have you thought about inheritances?
Adult 1 needs to be very careful here, they bring a lot more to this financially. Why is adult 1 (assume that's you) have reservations about adult 2's children?
I think that adult 2 should let it go and invest their money properly.
I would only invest/take a share in the house if married. Sounds like person 1 wants to keep everything to themselves and is avoiding marriage in order to keep it that way.
Adult no. 2 is cheeky. If I were Adult no. 1 I'd not bother with the refurb if it meant Adult No. 2 gets a share and carry on with it in my own name. Adult No. 2 needs to look after his/her own finances and inheritance for his/her children and not expect Adult No. 1 to subsidise that. There would be no way on Earth I would if I were Adult No. 1.
I think both Adults should keep their money separate so Adult 1 refurbs the house etc and Adult 2 buys their own property, in their own name.
If both adults have children it gets incredibly 'messy' regarding inheritance etc.
Keep money separate at this stage in your lives.
(I have always had a joint account/mortgage/savings with my DH - married 30 years + but would never combine finance if I had another relationship).
The only way i see it as being fair would be for adult 1 to have what the house is worth now protected.
The house is currently worth £200,000.
After renovations it will be worth £350,000.
In the event of a breakup adult 1 gets the £200,000 back plus 50% of the extra money.
Adult 2 gets 50% of the extra money.
Gosh wouldn't it just be easier to live separately and just date?
You are not making this any easier, 😂😂😂🤔, such mixed views!
*Adult 1 would find monetary conversations very difficult with adult 2's DC and wouldn't be confident in one DC putting the needs of adult 1 before money.
* Adult 1 is also aware that the DC's of adult 2 may think that adult 1 gets all the treats whilst adult 2 has no long term investment in the house.
* Adult 1's DC's ( and one of adult 2's DC's) think adult 2 is on to a good thing living rent free for 6 years.
* Adult 1 may feel that they are providing a 'family house' for adult 2's DC's as there has been no house purchase by either adult in that family(adult 2's) following the sale of the family home.
Ahhh! Just gets more complicated doesn't it!
I guess adult 2 has different options re investing for a secure future.
If owning a percentage of the current house doesn’t matter much to adult 2 then adult 1should continue to own the house.
If not, perhaps do the renovations and then buy a place together.
Does adult 2 have much less in capital assets than adult 1?
If fairly equal just get married.
I think the kids are not relevant. They have their own lives.
Look after the financial interests of both adults and the interests of the dc will take care of themselves.
There is no entitlement of dcs imo
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