Please or to access all these features

Add post

Watch this thread

Save thread

Start a new thread

Flip thread

Hide thread

My feed

Active Unanswered threads

Getting started FAQ's

Unanswered threads Acronyms Talk guidelines

Hide shortcut buttons

Talk

AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Flip

1 2 3 4 5 6 ··· 12 13

Original poster

To think that DH has been treated unfairly financially by his parents?

304 replies

TravellingToad · 29/05/2014 06:37

I'm struggling to get my head around something but have a feeling that it's unfair.

13 years ago DH and his sister bought a flat together. It was £120,000 and they didn't have any money. Their parents paid the deposit. DH and SIL paid the mortgage equally for 2 years. After 2 years SIL wanted to move out. DH wanted to stay but couldn't afford to buy out SIL.

The parents have SIL £60,000 on DHs behalf as her share of the flat. So that was 11 years ago. Yesterday DH sold the flat (for exact same as he paid which was £120,000)

His parents thinks he owes them £60,000 as they bought out his sister for him all those years ago. This seems unfair to me but I can't quite put my finger on why. I think it's because SIL didn't put any money into the purchase (neither of them did) but was gifted £60k after living there 2 years. DH serviced the mortgage for all that time, 13 years and has come away having to pay his parents £60k whereas SIL has that amount in her pocket. DH obviously has £60k in his pocket too from the other half of the flat but he paid into it for all those years so it's not really a bonus it's just what he put in. Sils £60k is pure profit

Can someone see clearly for me is this fair? Happy to pay it if it's fair. Their parents are extremely keen for both children to have been treated equally.

OP posts:

kalidanger · 29/05/2014 06:39

Sil owes the £60k, surely?

ThinkIveBeenHacked · 29/05/2014 06:42

Well I suppose they have paid in 60k plus thw initial deposit, so they owned half? So presumably they are entitled to half of the proceeds?

PorridgeBrain · 29/05/2014 06:43

Surely at the time SIL left, the mortgage hadn't all been paid off so SIL should only have been given: the value of the house at the time - mortgage left on it at the time / 2. - ie half of equity that they had each accrued until she pulled out.

WillieWaggledagger · 29/05/2014 06:44

the flat wasn't purchased outright?

in which case she should have received half the equity at that time surely, and now that your h has sold (presumably the mortgage isn't fully paid off so he hasn't received the full £120k?) he gives his parents the amount that they gave his sister from that equity. he keeps the rest

they overpaid her i think

MadonnaKebab · 29/05/2014 06:44

Has he been living in it all those years?
Could he consider his mortgage payments & maintenance costs, to have been effectively his rent.
That way both of them are 60K better off, thanks to their parents, even though, due to the housing market, there has been no profit.

KatieKaye · 29/05/2014 06:45

Can't see it is unfair. If he owned 1/2 and never asked them pay their share of mortgage then that's his issue and one he let go on for over a decade. They didn't give SIL anything, what they did do is allow DH to keep the flat via a transfer of 1/2 share. SIL didn't get anything in her pocket at all.

Original poster

TravellingToad · 29/05/2014 06:47

More details: the house was fully mortgaged parents paid the deposit (guess 10%)

In the last year my husband fully cleared the mortgage so he got the full £120k

At the time of SIL pulling out 11 years ago they had only been there 2 years so only paid a fraction of the mortgage

I think SIL has had much too much from PIL and now DH is being made to finance their gift to her. This actually wasn't PIL intention they wanted it to be fair.

OP posts:

Original poster

TravellingToad · 29/05/2014 06:47

To clarify SIL had £60k in her pocket

OP posts:

tumbletumble · 29/05/2014 06:48

I don't think this is unfair. DH's parents are definitely entitled to 60,000 as they paid that money in. DH has paid the mortgage for 11 years but he hasn't had to pay any other rent / mortgage in this time (whereas presumably SIL has) and he's ended up with 60,000.

I suppose DH and SIL between them owe their parents the amount of the initial deposit - how much was this? Are DH's parents asking for that too? If not then I think DH has done well out of this!

tumbletumble · 29/05/2014 06:52

Sorry cross post.

Both DH and SIL got 60,000 out of this. DH was paying the mortgage for 11 more years but he also got to live there during that time. I think if he had sold the property for more then he would have been entitled to the capital appreciation, but as it didn't increase in value then I think this is fair.

wowfudge · 29/05/2014 06:54

This is one of those situations where because it's family people don't think to properly document the finances and intentions.

Would your view be the same if he had sold the flat at a profit I wonder? (He has made a profit given he hadn't raised a deposit, etc, but YSWIM.)

He's made £60k if he pays his parents £60k. You could view it as he has effectively paid rent for those years he's lived there. I'd say it's a lesson learned - as one of the other posters said, the payment to the sister after two years should have been less, but it's too late now. Makes you wonder if the parents could have afforded to buy the flat outright.

It's a lot of money, but is it worth the fall out if he refuses to give the £60k to his parents.

Realitybitesyourbum · 29/05/2014 06:54

You dh 'bought' flat when he had no money? His parents gave him the whole lot basically! He now has 60k and his sister has nothing? I think it is the sister that has been treated unfairly!
He started with nothing, his parents were nice enough to start them off and now he has that much and she has nothing!
Oh yes, what it must be like to have been treated like that!
Man, some people! You can't be living in the real world! Ungrateful spoilt brat springs to mind.

Original poster

TravellingToad · 29/05/2014 06:54

But SIL used the £60k to buy her own flat 11 years ago. Let's say for argument it was also £120k. So she put down a £60k deposit and if she had sold it yesterday too then she would have the whole £120k to keep. DH has come away after this same time frame with only £60k. So it's not even or "fair"?

OP posts:

FishWithABicycle · 29/05/2014 06:55

Had he paid off the mortgage or has some of that money gone back to the bank?

He owes his parents a maximum of 50% of the amount of the deposit they paid originally plus a percentage share of the total equity which is the same as the percentage value of the flat that they bought when they bought out SIL (£60k divided by value of flat 11yrs ago). This could actually be more than £60,000 so don't kick up too much of a fuss or the amount might go up. When they paid £60,000 did that go straight to the bank to pay off some of the outstanding mortgage? If so, then he has benefited hugely from that as he will either have had his monthly payments massively reduced after that or if he kept the monthly payments the same he will have been able to pay off the capital much quicker than if this hadn't happened. Either way he is actually quids in.

Your DH hasn't serviced the whole mortgage, only 50% of the mortgage. His parents "serviced" the rest in a lump sum and they are entitled to see that money back.

The only difference between SILs situation and DHs is that SIL may have invested her 60k 11 years ago in such a way as it made a profit whereas DH just has 60k - but then deduct from that the fact that SIL has had to pay 11 years of rent (presumably) and she's probably worse off. - and there's no guarantees in investments, there was a reasonably chance that property prices might start back up and then he would have made even more money, it's not his parents' or sister's fault this didn't happen.

I think it sounds completely far to me unless there's some more detail you didn't put in your OP which show otherwise.

MadonnaKebab · 29/05/2014 06:55

Sorry, I misunderstood there.

The parents are entitled to half the equity less whatever DH has paid off the principal (ie not the interest, that's his rent equivalent) which is probably not a lot, and SIL owes them the rest of the $60k which they effectively loaned her.
Or they write off the gift to the SIL, in which case to be fair they should gift DH the difference between the equity figure calculated as above and 60k

SIL is quids in and DH is way out of pocket if you do what PIL's suggest, unless DH agreed to this at the time SIL moved out (in which case more fool him!)

WillieWaggledagger · 29/05/2014 06:57

the SIL has £60k, she could easily have gone on and used that to buy something else

musicalendorphins2 · 29/05/2014 06:57

Confused, but the only person he seems to owe 60,000 to seems like his parents? Their buying out the sister, could mean they feel they own that much worths of the place. He could give them 60,000, what they do with it is up to them.

musicalendorphins2 · 29/05/2014 06:59

Oh wait, just saw your other post, ignore my answer, as I have no idea!

FishWithABicycle · 29/05/2014 07:00

x post but this isn't making sense now.
Are there two lots of £60k here because if DH couldn't afford to buy out his sister and his parents stepped in then we're talking them buying £60k worth of this flat, but now you are also implying that there is another lot of £60k in a different flat.
I'm confused.

WillieWaggledagger · 29/05/2014 07:00

but if he had been able to buy out SIL at the time he wouldn't have given her £60k would he? because there wasn't that much equity in it

ballinacup · 29/05/2014 07:02

Tgr

PorridgeBrain · 29/05/2014 07:03

PIL gave them each £6000 for the deposit which stayed in the house. 2 years later they gave SIL £60000 and nothing to DH. So SIL got £60,000, DH kept the full deposit £12000 plus SIL's half of any equity and her half of any money they had paid off. So I think DH owes £12000 deposit plus half of the amount they had paid off in the 2 years plus half of any equity (rise in the value of the house) that happened in the 2 years which belong to SIL but parents effectively paid to SIL (although overpaid by giving her £60000). If DH can work out what the last 2 figures were, he can argue that he owes less than 60000 but he did (wrongly) accept at the time that his parents were loaning DH £60000 to give to SIL.

I think that's right but am not an accountant!!

ballinacup · 29/05/2014 07:04

The only thing I can see that your DH owes back to his parents is 50% of the initial deposit plus, possibly, interest on that amount.

If they want the 60k back that they used to buy out SIL, then they need to approach her for it.

tumbletumble · 29/05/2014 07:05

To look at this another way.

Effectively your PIL have given both DH and SIL the same amount (60,000). SIL received hers 11 years ago whereas DH is receiving it now. So that is why it seems unfair to you (because you would expect it to be worth more 11 years ago). But in actual fact it isn't worth more (because the value of the property didn't increase in that time), so it is fair assuming that, hypothetically, DH would have been allowed to keep any increase in value of the property.

larrygrylls · 29/05/2014 07:06

There are two elements to a mortgage, interest and capital repayment. Interest is effectively rent equivalent. If op's husband paid off the capital, the sale (-10% deposit) should be his. If he pays this to his sister, it would be a gift which he should not be obliged to make.

Flip

1 2 3 4 5 6 ··· 12 13