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Any creative thinkers out there? £££; needed, don't want to sell house/business

(7 Posts)
dotnet Thu 22-Nov-12 10:39:38

I'm posting this about a friend who is in deep doo-doo. She and her husband split some years ago. She had no assets when they married; her husband bought the house they moved to, on a smallish mortgage. He moved out five years ago or more.

About three years back, my friend had the idea of making a business by turning a section of the house into a sort of hostel for long distance walkers; she got a loan to pay for the renovation/alterations, most of which were carried out for next to nothing by a friend. I think the loan is mostly paid back now.

The business is doing OK, but her ex husband (divorce not yet through) wants his share of the money from the house. I don't know whether he is trying to claim all he paid, possibly not.

Is it likely my friend will have to release half the 'new' value of the house, or just half of what it was worth at the time her husband last lived there?
More to the point, does anyone have ANY suggestions as to how my friend can pay him off? She's over retirement age (just), has virtually no money of her own and naturally doesn't want to have to give up her hostel business. She can't remortgage - she's gone into that.

It would be great if someone could come up with a good idea she can look at! Thanks.

ethelb Thu 22-Nov-12 10:45:10

He owns half the house I'm afraid.

Could she buy him out on a business loan?

Rockchick1984 Thu 22-Nov-12 11:15:06

Depending on how much he wants, equity release / lifetime mortgage may be an option for her. Unfortunately it's half of the current value that he is likely to be entitled to, she should have tried to get finances resolved before doing the renovations sad

CogitoErgoSometimes Thu 22-Nov-12 11:20:25

Your friend needs to see a solicitor. It is technically half his house and she should really have got the rights to it sorted out when they originally separated. If you look up the case of 'Kernott and Jones' that might give her a little cause for optimism ... unmarried couple, property jointly owned but one party had not contributed for 20+ years... but she really needs a solicitor to help her through her particular situation. I'd also recommend a business loan for the pay-off...

dotnet Thu 22-Nov-12 13:25:55

Thanks for the replies so far. Helpful. Yes, she probably was very foolish about doing the renovations without letting ex husband know - the fact she had started a business was news to him.
The idea of an equity release plan is a really good one. I don't know, though, whether the house is in her ex husband's name or in their joint names, I suppose there are potential complications there unless something could be done where ex husband signs the house over to her with the proviso that she equity-release it and gives him X amount from the equity release.
Business loan - I'll mention that next time we speak.
My friend does have a financial adviser, but the more suggestions people make, the better, it's really nice that there are such a lot of people with brains and a helpful disposition out there on Mumsnet!

RedHelenB Thu 22-Nov-12 16:46:41

How well off is her ex husband|? If he has a pension & is housed she may be awarded the house or part of his pension. She needs to see a solicitor to see her options.

dotnet Thu 22-Nov-12 17:33:13

Hi RedHelenB. Her ex husband is not well off at all. Last time we talked about him she said he wasn't working; I don't know the situation now. He's very much younger (15 years younger I think) than she is. He's with another woman now; the accommodation he now has will either be hers, or rented.
I'm going to send my friend an email with the suggestions about equity release, a business loan and seeing a solicitor. Thanks, and please keep any ideas coming in!

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