Active discussions

Meet the Other Phone. Only the apps you allow.

Meet the Other Phone.
Only the apps you allow.

Buy now

Please or to access all these features

Talk
AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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:
ILoveWooly · 30/05/2014 09:10

Perhaps the mortgage stretched him at the time and he didn't have £6000 in savings? It isn't hard to understand if this was his first home. Over a 13 year term the payments plus insurance would have been around £1000 a month.

doziedoozie · 30/05/2014 09:25

Over a 13 year term the payments plus insurance would have been around £1000 a month

So if this was the case he has spent 12x13x1000= 156,000

ILoveWooly · 30/05/2014 09:48

Yes... at a 5% interest rate.
That's the problem when a house never increases in value.

PetraArkanian · 30/05/2014 11:00

The more I think about it the more I think that "buying out the sister" is a red herring.

Think about the actual cash used to buy the house over the past 13 years. Without the detailed mortgage figures I'm not sure the exact amounts (op get your dh to clarify with the mortgage co), but assume with interest he has paid £150k, sis maybe paid 5 in the first 2 years. again, check with mortgage co. Parents paid 12k in deposit in total, and effectively took over the interest sis had paid.

Money in from parents - 12 + 5
Money in from brother - 150

Now whether they think their 17 was a loan or a gift it's pretty clear based on amount of cash put in that they are due at best a smudge more than 10% back.

Ignore the amount they gave sis in any discussions - bro never saw it and it never went towards paying for the house. Parents screwed up by giving her too much but that's their problem not his!

OP under NO circumstances let your dh give them the 60k. This is not the sort of money to let go for the sake of an easy life. If they say they could have charged him rent on their half (which if their names weren't on the deeds they couldn't) point out they would then have had to pay the mortgage on their half.

EddieStobbart · 30/05/2014 11:52

If the flat had increased in value then it would have been fair to give them the percentage share they had put in (so essentially a shared equity scheme) unless they'd agreed the £12k was a loan with a specific interest rate defined (so a straight loan just from parents rather than bank).

EddieStobbart · 30/05/2014 11:53

Must leave this thread, OP is probably so bored now she doesn't care any more!

BlackDaisies · 30/05/2014 12:27

Where is the OP? I want to know what happened in the end!

magoria · 30/05/2014 13:28

I wonder if parents gave her £60k expecting her to pay off her share of the mortgage but she didn't and kept quiet?

Original poster
TravellingToad · 31/05/2014 13:10

Update: He still hasn't spoken to MIL yet.

OP posts:
wafflyversatile · 31/05/2014 13:32

TBF it's not a conversation I'd relish having...

'Hi parents, just thought I'd pop round to say you've made a monumentally stupid mistake and you're not getting the £60k you though you were entitled to'

43percentburnt · 31/05/2014 13:42

I think he should write down the calculation to show them. I work with the public and finance and this scenario is a very common mistake.

120 value of house at time sil moved out - 104 (approx mortgage at the time sil moved out) = 16k equity. 16k divided by 2 people = 8k each.

Technically he owes parents 12k. Plus half the equity at the time sil moved out (I would say he owes this to his sister as she paid half the mortgage).

His sister owes parents 60k.

this is assuming the 12k was a gift in the first place (not a loan). If it was a loan then add interest at the appropriate rate.

nauticant · 31/05/2014 17:58

If you have a discussion, I'd suggest focusing on the sister's debits and credits and the resulting total:
a debit of half of the mortgage repayments made until she stopped paying;
a debit of an estimate of half of any equity in the flat at the time she stopped paying; and
a credit of £60,000.

If account is made for the deposit, this should sum out at zero with her receiving half of it and then passing it on to her brother (unless the reality is different). There should be no account made of any interest payments she made since they're cancelled out by her brother's interest payments and also this is money that did not create equity.

Once the PILs have seen and understood this, it should be straightforward for them to see that the sister has received magic money created out of nothing. Oh, hang on...

StatisticallyChallenged · 31/05/2014 18:00

43 percent I don't think he would owe half the equity plus the 12k as the equity included the 12k so that would be double counting. Going with your figures and assuming SIL paid half mortgage until moving out then the amount contributed to the house by other people would be 14k -12k parents deposit plus 2k mortgage by sister.

nauticant · 31/05/2014 19:10

That's a good point StatisticallyChallenged. Since equity would include the deposit, it might be simpler to think instead of gain so any calculation of extra value in the flat should be purchase price - potential selling price of flat when the sister stopped paying.

Original poster
TravellingToad · 31/05/2014 21:13

As I said upthread we aren't planning on really getting into if he should pay it or not. We're going to say that we'd rather not pay it seeing as we have given them much more than £60k in free rent (see above) so hoping they'll just write it off.

If they don't agree THEN it may get awkward. That should be win-win. We're giving them the rent free living anyway so its no skin off our nose if we use that to cancel out imaginary £60k

OP posts:
Iseenyou · 31/05/2014 21:21

This reply has been deleted

Message withdrawn at poster's request.

BlackDaisies · 31/05/2014 21:26

All he needs to do is feign confusion and say "I just don't understand, I've paid the bank 108 thousand pounds and interest on top, of the total 120 thousand, can you explain why I now need to pay 60,000 on top of that. Really sorry mum and dad, that would mean I had to pay about 200 thousand for it. I just don't get it........"

EhricLovesTheBhrothers · 31/05/2014 21:37

I think that's the wrong tack. That leaves them believing that free rent is in exchange for moe y you owe them which is totally wrong. They could also alter their will to reflect this £60k that you have supposedly had and his sister hasn't!

stiffstink · 31/05/2014 21:50

Blackdaisies has it.

SIL paid half a mortgage for 2 yrs and got £60k from PIL. So she is up by, what, £55k ish?
DH paid half the mortgage for two yrs, plus the remaining (approx) £108k plus interest for X years and now they want him to pay them £60k. So he is down by over £180k at least with the interest.
He gets £120k from the sale which leaves him £60k down and her £55k up.
SHE owes PIL the £60k!

weakandvocal · 01/06/2014 04:09

Why not, "Because this is such a large amount, I have taken legal advice and my solicitor MN was very confused by what the buy out represented, as 60k was not half of the capital of the house.

SIL share was only 8k at the time she left. That was half of the capital in the house and the full remainder was owned by the bank. I had to pay off the interest on that full amount of 108k. If you wish me to repay the initial loan, I can do so. That was 12 k. Though, to be fair, you should be asking her for the 60 you lent her too.

FuckYouChrisAndThatHorse · 01/06/2014 08:03

To avoid the bad feeling, could you use your tactic, which they will hopefully agree to, and then once they've agreed say, "thank goodness! We really didn't want to have to argue with you about how you'd hugely overpaid dsil for her share, by about £50K! Easily done I suppose, but the bank owned the house at that point, not dh and dsil. We only owned a tiny percentage, which is what should have been given to dsil."

That way the debt has been written off before you quibble over their figures, but hopefully rather than possibly resenting you not paying it back, they will realise their mistake. It could preserve the harmony.

Itsfab · 01/06/2014 08:33

Ehric is right. You are acknowledging you owe the PIL £60k when you don't and it could mean the sister gets even more free money when they die.

merrymouse · 01/06/2014 08:43

I agree that you should just put the calculation on paper. You don't even have to have a discussion, just put it down on paper and then just ask them to confirm their understanding of the situation.

I don't think any good can come of an agreement based on the idea that 2+2=5.

BlackDaisies · 01/06/2014 09:21

Even if you're not worried about inheritance, it could cause a lot of unnecessary resentment in the future if they truly believe you are refusing to pay back a debt of 60,000. Why is he afraid of explaining their mistake to them? From the outside it seems really straightforward. If they argue that he was only able to take on the debt thanks to the 60,000 just make sure he explains that at that time the bank owned most of the flat, and all he needed was to give your sister half the deposit and the equity on the two years she paid in, for which he is grateful and which he will happily repay. I just couldn't live with anyone mistakenly believing I owed them 60 thousand pounds!!

PetraArkanian · 01/06/2014 09:40

I agree with black daisies OP - you really do have to make them see that your dh doesn't owe them the money. Otherwise you are in for a future of having that £60k used against you.

It's really not that complicated...remove the red herring of what was given to sil and show them where the money came from to pay for the house over the past 13 years - only the 12k came from them!