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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:
maddening · 29/05/2014 09:42

Monty - that 60k shouldn't have gone to dsis - it should have paid half the mortgage and then whatever was left from 60k would have been hers - which woukd have been half the deposit plus equity built in the mortgage (ie pretty much sweet fa over 2 years) then yes the pil would be owed the money.

Pumpkinette · 29/05/2014 09:44

If they had sold the flat after 2 years they would have still had a lot left on the mortgage so the sister would not have had £60,000 in cash for a deposit.

Had this happened (without a 60k deposit) Her new mortgage would have been higher and she would have been making higher monthly repayments. She is now better off financially than your DH as when she sells her place she would get the full amount.

I do see that the parents effectively bought out her half but it's still unfair on your DH. TBH the best plan at the time would have been to sell the flat and both buy a new property. Your DH should never have agreed to the arrangement in the first place as he had lost out.

The sister effectively got £60,000 for her share of the property that she only paid into for 2 years. Going by the figures you have given (£120,000 with 7k deposit) the sister paid in about £9,000 / £10,000 to the mortgage in the two years she was there. As the flat has sold for the same amount it was bought for then she should really have only been given the 10k plus the 3.5 k share of the deposit. She has made £46,500 profit on her half after 2 years and your DH has made £60,000 after 12 years but considering he's paid in about £103,500 for the rest of the mortgage he has actually lost £46,500 on the money he has paid in over the years.

The fair thing to do would be for your DH to pay back £13,500 to his parents and the sister to pay the remaining £46,500 when she sells her property.

BlackDaisies · 29/05/2014 09:47

Basically you SIL has been given 60000 as a deposit on a flat and your DH was given 12000. Other than that they both paid/are paying their own mortgages. If your PIL want their loans back, that's what they both owe. The mistake people are making is in saying that the parents effectively gave your dh 60000 to buy your sister out and that without that he could never have afforded the flat. But he didn't need that, that was their mistake. All he needed was half the equity on the flat two years ago. He certainly doesn't owe your PIL 60000 for a flat that he has paid, on his own, the best part of 120000 for.

Gingerandcocoa · 29/05/2014 09:48

DH didnt know it was 60k at the time he just got told "we've sorted it with Sarah", no figures until much later.

Then I think you are right to argue you shouldn't pay the PIL back. If your DH wasn't told the figures, then it's not really his fault! (although one could argue he should have asked...)

DoJo · 29/05/2014 09:56

It's complicated because, although the 60k was couched in terms of a loan for your husband, he didn't actually get to agree the terms. Which is a failing on his part that he didn't ask for more details, but at the same time, if your in-laws wanted to 'sort things' then they needed to make clear at the time that they had expectations for when the flat was sold, not bring it up now.

Given that your in-laws don't seem that financially savvy, do you think they will understand the issues? I'm sure if you could explain it to them so they see how unfair the situation is, they would probably relent, especially considering the fact that you are clearly reciprocating their earlier (misguided) kindness now.

SanityClause · 29/05/2014 10:03

I still think, *TravellingToad" that your DH should have found out at the time what the parents meant by "sorting it out".

I know this is all hindsight, though, of which we all have bucket loads.

I hope this doesn't cause problems in your family, as money so often can. Sad

fluffywhitekittens · 29/05/2014 10:04

How about you suggest putting the £60k into a long term saving investment for your children/ their grandchildren?

Belindabelle · 29/05/2014 10:04

Did your DH continue to pay the same amount of mortgage after his sister moved out, or did his mortgage payments double?

StandsOnGoldenSands · 29/05/2014 10:07

The fairest way is to treat the rest of the 60k as a gift from PIL to SIL. Your DH can feel aggrieved that he hasn't had an equivalent gift, but ultimately it is up to his parents what they do with their money. It does put their desire to live in your house rent free into a different light though. Perhaps SIL can house them for free ?!

PleaseJustShootMeNow · 29/05/2014 10:11

DH didnt know it was 60k at the time he just got told "we've sorted it with Sarah", no figures until much later.

So you DH took out a private mortgage with his parents to buy out his sister and he never bothered to ask how much he would have to pay back, even though this debt would be tied to his home. Your DH is a fool and now has to pay the cost of being such a fool.

And I agree with the previous poster, why on earth are you allowing someone with so little financial awareness to run your company. I wouldn't let him run my piggy bank.

cathyandclaire · 29/05/2014 10:12

Is there any way that PILs are under the impression that SIL paid off her half of the mortgage with the £60k and used the surplus as a deposit for her new property?
That could explain their belief that they are owed the money back ( although they should also expect the deposit back off SIL when she sells her property)
Otherwise I'm baffled Confused

< forwards thread link to DD as complicated maths AS problem for revision!>

KeinBock · 29/05/2014 10:15

The fairest way is to treat the rest of the 60k as a gift from PIL to SIL.

Yes, but of course the PIL now want the OP's dh to pay them the 60k, which would make it a 60k gift from the DH, offset by the 16K he himself received, leaving him 48K out of pocket...

KeepingUpAnon · 29/05/2014 10:16

I think it's fair.

They both paid mortgage for 2 years and lived there.

She moved out and her parents gave her £60k. Presumably she has been paying rent/mortgage elsewhere since.

He moves out and he also gets £60k.

They've had £60k each and both been paying rent/mortgage somewhere all this time.

The only thing I would think is unfair is if she moved back home, so he'd been paying the mortgage etc and she'd been subsidised by the parents all these years.

cathyandclaire · 29/05/2014 10:19

But Keeping Up the 60k he got, was from the capital repayment HE made on the mortgage, not a gift from his parents, they just gifted him the deposit.

StandsOnGoldenSands · 29/05/2014 10:21

Yes, I agree KeinBock. The PIL are entitled to their cut of the deposit for the house but it would be pretty off for them to seek to enforce that in the circumstances as SIL has had far more from them.

patienceisvirtuous · 29/05/2014 10:22

Stands it's not a gift from PIL to SIL when they want OP's DH to fund it. They are expecting their son to gift their daughter 60k

Pils put in 12k to house
SIL put in two years only of 50% mortgage payments
OP's DH paid off a 120k mortgage (only help being 12k deposit and two years of 50% mortgage payments)
PILS gave SIL 60K

No way should Dh pay all that money back. Majority needs to come from SIL or not at all.

StandsOnGoldenSands · 29/05/2014 10:27

I'm not saying he should pay it back. I'm saying PIL should treat the 60k as a gift which is separate from the flat issue.

mimishimmi · 29/05/2014 10:31

I don't think it's unfair. She paid her equal half of the mortgage whilst she was living there. Then when she moved out, the parents paid outright for half her share which presumably all went to paying off the mortgage (or did it not???) thus saving a sizable amount of interest. Now your DH is selling it and they are not asking for £60k plus interest but only the £60k they put in. The only reason I can think if you having problems with this is if you did not use that money to pay off the mortgage but on discretionary spending...that is not their problem though. Expecting a £60k gift when they presumably need to fund their retirement is unreasonable.

Bearbehind · 29/05/2014 10:36

mimishmmi where does it say the £60k went towards paying off the mortgage.

I'm pretty sure it didn't as the OP's DH didn't even know the amount the parents had given the sister (which he would have if it had reduced the mortgage.)

patience has succinctly summed it up above and it is grossly unfair.

mimishimmi · 29/05/2014 10:38

Oh sorry, I think I read that wrong. So they did not buy her out but gifted her £60k as her share of the flat, your DH took on all of the mortgage alone and now they are expecting him to pay back the £60k they gave to her? That's NOT fair AT all and you shouldn't be feeling mildly put out by that. It was a risk they took that they probably hoped the value of the flat would rise sufficiently to cover that. If it's sold at purchase price, then it's a risk that wasn't worth taking for them or your DH.

mimishimmi · 29/05/2014 10:40

Sorry, forgot an italics marker there somewhere.

MellowAutumn · 29/05/2014 10:40

I think you need an accountant to sort this in RL and to also explain the calculations to the PIl and then take the discussion from there with respect to the rent !

mimishimmi · 29/05/2014 10:43

I had originally read it that the parents had given OP's DH £60k to buy out his sister, not that they had given the sister £60k. That doesn't make sense, what were they thinking?

Bearbehind · 29/05/2014 10:50

It's not that difficult to work out:-

PIL gifted brother and sister £6k each (£12k deposit)

This hasn't increased as the value of the house remained the same.

SIL contributed to the mortgage for 2 years so her equity is 50% of 24 x value of the monthly capital repayment- call this 'X'

Ignoring the £60k gift, SIL share of the proceeds is £6k plus 'X'- the rest belongs to the OP's DH.

If PIL want their deposit back both children need to repay it from their share of the equity (SIL would then only be left with 'X')

If PIL want to treat the children fairly they need to give the son £60k not the other way round!

erin99 · 29/05/2014 10:51

Where did the £60k end up? In SIL's pocket? If so that's what was wrong. The problem was that your SIL didn't own £60k of property at the time, she owned a much smaller proportion and the rest was owned by the bank. Either PIL should have paid her a smaller amount and DH carried on servicing the whole mortgage, or they should have paid off half the mortgage. 60k into SIL's pocket when most of that was not owned was the mistake.

Had they given it straight to your DH to buy out his sister, he could have reduced the mortgage with it and then he would owe them £60k. But to pay 90% of the mortgage off and still owe anyone £60k makes no sense. Or something.