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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:
WanderingAway · 29/05/2014 07:31

I dont think that it is fair.

PIL effectively took 60k from dh and gave to sis to buy her out so he was 60k down and he paid the whole mortage himself expect for the first 2 yrs.

I think PIL need to drop it and not expect anything.

What is dh going to do with the money from the sale? (Nosey)

Suttonmum1 · 29/05/2014 07:32

Is it easier to forget the sister and the first two years. Effectively parents bought back a half share of the flat from the sister. Since then they have not been paying their half of the mortgage (but neither have they been living there). So, brother has been paying their 'share' of the mortgage, and presumably their share of insurance, maintenance, council tax etc, but has not been paying them any rent for staying in their half of the flat.

Probably evens out, and to avoid arguments he should pay the 60K, or just a little less than that.

WillieWaggledagger · 29/05/2014 07:34

no suttonmum1, if they bought back a half share at £60k then they overpaid for it - that was not what it was worth

Littlebigcat · 29/05/2014 07:35

PIL should have given half the deposit and half the equity to SIL at the time she moved out. Presumably PIL paid no more in to your DH's flat? If not then paying them back 60k would be unfair, it was PIL's mistake, he owes them the amount they should have given to SIL at the time.

It's a shame no one pointed out that giving SIL 60k was a mistake at the time, if it's been 9 years she may not be able to easily return the money even if she can see the mistake. I don't think they owe your DH to even things up because that would be penalising them for a mistake twice and is a bit mean.

Hope you find a way of pointing this out amicably.

CateBlanket · 29/05/2014 07:36

Hmm think there's a lot more to this than OP is letting on ...

DragonMamma · 29/05/2014 07:39

If the DH gives his parents the 60k they gave the SIL plus he's paid off say 100k on the mortgage these past 11years then he's paid 160k for the flat?

The parents shouldn't have given the SIL 60k after 2years because there was a mortgage on the flat and she didn't own half of if outright. They should have given her half of the equity at that time.

PiratePanda · 29/05/2014 07:39

I got A's for Maths and Further Maths at A Level and you've lost me.

Cric · 29/05/2014 07:40

I guess it depends if that money's was used on his mortgage or a deposit on her new place??

DragonMamma · 29/05/2014 07:41

Oh and DH's ex wife thought exactly the same. Their old house was worth 150k and she said that she would allow him to buy her out for 70k.

I think she felt a right Muppet when she realised that they owed 120k on the mortgage...

SanityClause · 29/05/2014 07:46

If SIL had forced a sale when she moved out, she would have got only half the equity, at that time. That would have been a lot less than £60K, I should imagine. So, in theory, the parents have overpaid her, and need to get the money back from her.

The calculation is to work out what the sale price would have been when she moved out, and deduct the sum outstanding on the mortgage at that time. If it was always a repayment mortgage, then that would have been most of the £120K, as the early payments are mostly interest, until the loan reduces, and more capital can be paid off.

If your DH has kept the mortgage statements, he will have these details. Otherwise, the mortgagor may be able to provide him with information about the interest rates, and you will be able to use a spreadsheet, to work out the equity at the time.

This won't be popular with SIL, I'm sure, so it all sounds like a bit of a mess.

SanityClause · 29/05/2014 07:49

I have to say, though, your DH was happy for them to give SIL £60K at the time to get him out of his mess. It's only now, when it's his £60K, that he's questioning it.

Original poster
TravellingToad · 29/05/2014 07:50

cate what do you mean by that? What would I have to gain by withholding info about the flat, I'm trying to get opinions here! The details are correct. There is nothing being withheld. If you mean about me adding about the house we bought them that's purely to counter the people who said we were "entitled" and should be giving them the money immediately and incinuating we were arseholes for not paying up quickly. I'm just saying, we aren't arseholes and in fact have been extremely generous to PIL recently. We aren't trying to screw them.

OP posts:
bedraggledmumoftwo · 29/05/2014 07:56

I have to confess i am an accountant.

pickled porcupine's illustration is correct. The sister should never have been given 60k, she only deserved half the equity, which would have been more like £10k, although 11 years ago, 2003, before the crash, it might have been worth more. And there is the question of the deposit being a loan or a gift.

the problem is what the ILs did with the money- if they actually gave it to SIL on dhs behalf (massively overpaying her) then that was wrong. If they had paid 60k into the mortgage account then that would be ok, as it would have reduced your DHs payments, so they would be owed that £60k back now. Instead, in my view, they essentially took over sisters share of the equity but also the mortgage, so you would need to do some detailed calculations to take half the mortgage payments for 11years, less a rent amount given dh was living there and they weren't. I have no idea what the rental value of the property was, but you could work it out this way.

at the end of the day, i would say both dh and pils didn't think this through in giving sil 60k without her maintaining responsibility for the mortgage, depends how receptive she will be to the news that she was overpaid 50k, eleven years later, when she presumably took the money in good faith. If you want to keep her out of it, do a calculation as above, re their share of the mortgage payments, and a rental amount for dh renting their part back off them iyswim

Tweetinat · 29/05/2014 07:58

I think CateBlanket has got it spot on:

No, no, no.

PIL didn't give OP's DH £60k when SIL wanted out, the muppets gave the £60k to SIL despite (I assume) there being little equity (if any) in the flat.

So SIL had taken out a joint mortgage for £120k (let's leave the deposit out for simplicity's sake). Had the flat been sold at original purchase price then the sale proceeds would have gone to bank to pay back loan and SIL would have got nothing (as would OP's DH).

However, PIL's gave SIL £60k and DH took over the £120k mortgage which he has been servicing ever since. PIL's are only entitled to their deposit back (plus interest due). If they had put £60k into house to reduce mortgage loan when SIL left it would have been different story but they didn't and I'm confused as to why they thought SIL was due that windfall.

PickledPorcupine · 29/05/2014 07:59

"I was going to do the same as pickled porcupine. She is spot on."

larrygrylls Grin feeling big headed now!

SanityClause · 29/05/2014 08:01

Is the house you bought "for" the PIL in their name, or yours/DH's.

If its in theirs, then surely they have had their £60K already, assuming the house is worth more than that. If its in yours, and you are allowing them to live there rent free, then, perhaps the notional rent can be treated as payments towards the £60K?

MrsGeorgeMichael · 29/05/2014 08:06

would you not need to know the value of the house when sister moved out?

i have a property that was worth 250k about 10 years ago - i have an offer on it at 120k at the moment

if the value had risen rapidly in the 2 years since they bought, then the sister might have got 60k from selling at the time (i had bought for 70k and that jump to 250k happened in about a 3 year time frame!)

bedraggledmumoftwo · 29/05/2014 08:09

E

bedraggledmumoftwo · 29/05/2014 08:09

Ex

bedraggledmumoftwo · 29/05/2014 08:09

Exa

KatieKaye · 29/05/2014 08:11

There are two issues here. What is owed to PIL for their share of the house and the £60k given to SIL. It is interesting that PIL are not as wealthy as OP and DH. But found £60kvplis deposit to let DJ stay in flat. They could have done nothing and had £60 invested for 10 years.
Given their financial situation, former generosity etc they have a right to the £60k and it sounds like they sacrificed a lot to let DJ stay I'm house. He had a moral obligation to pay them back and needs to stop thinking about their gift to SIL and of the right thing.
It might not be fair that SIL got theory but it is not a justification not to give PIL their share of the flat. That is even more unfair.

bedraggledmumoftwo · 29/05/2014 08:12

Stupid phone. Exactly, George Michael, between 2001 and 2003 prices were rising, but that's a local thing. So you would probably have to look at house price inflation stats for those two years to work out how much equity the sister was owed

BalloonSlayer · 29/05/2014 08:14

I think you need a solicitor on this one!

Dancealot · 29/05/2014 08:16

So your husband has paid off the £120000 mortgage and now needs to give his parents £60000. He would have paid £180000 for a flat worth £120000, of course that is unfair!

it was bonkers for his parents to give his sister £60000 when she had hardly paid anything in, they should have just taken over her half of the mortgage or paid your brother £60000 on her behalf!

PickledPorcupine · 29/05/2014 08:16

KatieKaye What do you think their share is though? They do not have an £60k share in his house so why should they be entitled to that money? They do have a right to their money but they massively overpaid the SIL so if they have at claim to it, it should come from her.

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