The house following separation

[user1485116372]

I know there is no definitive answer to this and a solicitor should be sought. But some people must have some advice and experiences to share.

Me and my ex and have 2 young children and a joint mortgage. He left and moved out 3 years ago. At the time we calculated the equity in the house was £50k and so his share was £25k (13.89% of the house value).

I still live in the house with the children and pay the mortgage and bills. He did help with the bills for the first year on top on CSA payments. He now only pays CSA.

My ex has now approached me to see if he can get off the mortgage and have his equity. I've told him he can off the mortgage but wont get the money for 12 years (when our youngest will be 18). I've told him he can have his £25k then.

He immediately disputed the figure of £25k and said i should be paying him 13.89%. The house has increased in value so thinks his figure should now be over £30k (13.89% of £220k)

Can he request this?? He has said he'll take a lower offer of £25k if we sort out in the next few months. Otherwise he's threatening to take 13.89% in 12 years time. But this figure will be a hell of a lot more than £25k by that time.

My ex is making claims that his share is an investment and the value fluctuates with the housing market. He's also claiming, he'd be a financial loss by not having the money, because he' have to borrow an extra £25k to by his own house.

Am i right by standing my ground and giving him £25k in 12 years from now??

Like i said before, a solicitors is the best place, but people must have their own similar experiences or knowledge.........

[traviata]

are you married? this makes all the difference.

[SheRaaarghPrincessOfPower]

Did you make a deed of trust at the point of separation?

[SheRaaarghPrincessOfPower]

It all depends on what the agreement was at time of separation. In my case it's a percentage of equity above a certain value.

Thing is, his money is tied up in the house, and his percentage share of the house has increased in value.

[SamanthaB52]

no, we were not married, and no, nothing was put in writing.

Yes his money is tied up in the house, but he surely cant expect his share to increase with value. I'm the one paying the mortgage, so shouldn't i get all the increase in value.

[SamanthaB52]

have you been through something similar SheRaaargh.......??

[Efferlunt]

That doesn't sound unreasonable. If 14% was decided on then he should get 14% of the value when the house is sold surely? 25k won't be worth as nearly as much in, say, 15 years time.

[SillySongsWithLarry]

Increase with value is standard. 13.5% is his share and if the value of that increases over time then be it. Your share would increase at the same rate.

[Zampa]

If you are both on the deeds, surely he would be entitled to claim 50% of the equity in 12 years time? 13.89% (of the equity) therefore seems to be a good deal for you and accounts for you paying the mortgage on your own.

If he can't access the money now (and so invest in his own property/shares/savings etc.) then I feel he is entitled to the percentage value of the house in 12 years time rather than a fixed sum. However, he'll need to agree on how to account for no longer paying the mortgage.

Is it not possible for you to raise the £25K now? That must be the easiest thing to do.

[parklives]

Thing is, he has now an investment in the house rather than living there.
If you have to release the £25,000 to him now it will cost you a lot more over the years (if you have to add that to the mortgage).
I think what he is asking for is fair, you will have to try and buy him out now or accept that his investment in the property will grow (like yours).

[SillySongsWithLarry]

If house prices crashes would you still pay him £25k or would his share then be a percentage?

[SheRaaarghPrincessOfPower]

Yes. He owns his percentage in the house, and that's based on his share of the equity when you split. If he had access to that money now and was able to put towards a house, he'd see an increase in value.

In my opinion it's like an investment in the house. His percentage, which he's paid for (presumably) should increase in value, why wouldn't it?

BTW, I'm in your situation, and I'm the one that insisted on the percentage rather than actual figure. It's much fairer in the long run.

You should really draw up a deed of trust though. Protect your share of the house, and put in writing exactly what you're each entitled to.

Rather than him having 14.89% of total value, it might be better to word it as 50% of the shared equity at the time of the split. Anything after that, any mortgage paid off by you is your.

I don't think £25k in 12 years is at all fair. Your share will increase in value and you'll benefit from that. Why shouldn't he also benefit? He won't be getting a share of anything you're paying off yourself, just increase in market value on his percentage.

You need a solicitor, and you need a deed of trust.

[SheRaaarghPrincessOfPower]

This is a good deal BTW. A lot of people would push for 50% of total sale (minus outstanding mortgage) . Nothing stopping him doing that if he changes his mind either, unless you get it all in writing and agreed.

13-14% is a very good deal.

[SillySongsWithLarry]

Although PP has a valid point. You are talking in terms of financial settlement which is what happens in a divorce? Are you married? If you aren't married it's worth looking at your deeds for the equity split. He could demand 50% at time of sale.

[SheRaaarghPrincessOfPower]

"If he's only asking for 13.89%, I'd snap his hand off."

This.

[SamanthaB52]

50%?!! Over my dead body!! He did mention that as a bit of a scare tactic, and claimed he was offering me a good deal.
I'm arguing that we agreed £25k and he's arguing 13.89%. At the time it was the same value. So he's not getting more than £25k in my eyes.

Does the type of ownership make any difference to my situation?

We are 'Tenants in Common' as opposed to 'Joint Tenants'
It's my impression that joint tenants split it equally and tenants in common split based on different shares, so I don't think he'd have a leg to stand on getting 50%. Am I right on that?

[SheRaaarghPrincessOfPower]

Well, it might not be up to you!

I'm not sure about tenants in common vs joint tenants. What does your mortgage agreement say? Are you tenants in common with an equal share?

Just see a solicitor.

[SheRaaarghPrincessOfPower]

Oh, and 13.89% IS a good deal, and you'd be daft not to take it.

It protects you too. If the arse falls out the bottom of the housing market and your house halves in value, you'll only owe him 13%, rather than £25k. Unlikely, but it's possible!

My solicitor refused to talk in figures and told me it had to be done in percentage value of the equity. And she was extremely surprised at the good deal I'd got (similar to yours, but not quite as good!) most of the clients are had needed to split 50:50 at point of sale.

You seriously need to realise that you've got a really good deal here, and you need to get it in writing.

[SamanthaB52]

Hmmmm food for thought I guess.
Thanks for your input SheRaaargh.

[Gobbelino]

Hi Samantha - what is the share split of your tenants in common agreement?

[SheRaaarghPrincessOfPower]

No problem :)

Just been through all this shit, it's very stressful isn't it.

What will be helpful is digging out a mortgage statement at the time of the split, or soon after. The solicitor will likely need this information if you draw up a deed of trust.

[SamanthaB52]

I have absolutely no idea Gobbelino. Neither of us stated from the start. I only know we're Tenants in Common from looking at the Land Registry document. Can I assume without any specifics put in place, it'll go down to who pays the mortgage etc and work from that?

[SamanthaB52]

Oh, he also had to cheek to say he'll overlooking the £6k he put up to cover stamp duty and solicitors fees, plus £7k deposit he put down on the house before this one. I think he forgets that I stayed at home to look after our children, so could contribute in that respect.

I get the impression he knows somethings is wrong and seems to go OTT claiming to be offering this and overlooking that.

[Gobbelino]

Hi Samantha - my understanding is that when you purchase a property as a joint tenancy, then you both own 100% of the property and are entitled equally to equity etc but when you purchase it at tenants in common you specify the share that you each own at the time of purchase. So if one of you put down a substantial deposit for example, they may own a greater share of the property than the other. When it comes to
Inheritance, joint tenants must inherit the property from the other and this cannot be bypassed with a will, but tenants in common can leave their share of the property to whoever the choose and the other party wouldn't automatically inherit. This is based purely on my own experience of a similar situation to you, a solicitor would be able to confirm it after reviewing your deeds etc. if you have a copy of the paperwork from your purchase, I'd recommend you check that it shows you're tenants in common and what share you each purchased.