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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:
doziedoozie · 29/05/2014 10:54

Well, didn't parents help buy out DSis half of the 120,000 house. ie leant 60,000 to DH (to give to his sister) so that he could 'own' the whole house.

He owned the house and paid the mortgage then when it was sold they wanted their 60,000 back.

Yes, the 60,000 was the wrong amount as mortgage had been paid. But they could also ask for interest on their 'loan' which would be even more.
I think he is stuck with it.

He has paid the mortgage all this time, if he hadn't done he would have had to pay rent. He is out of pocket but largely because the house price stayed the same, it is assumed that they will go up.

Bearbehind · 29/05/2014 10:57

Well, didn't parents help buy out DSis half of the 120,000 house. ie leant 60,000 to DH (to give to his sister) so that he could 'own' the whole house.

But the sister didn't own 50% of the house, she owned £6k plus the small element of capital repayments she contributed to in the 2 years. The OP's DH has paid the very vast majority if the £108k mortgage.

ENormaSnob · 29/05/2014 10:58

Yanbu

I wouldnt give the 60k back for their fuck up.

BrianTheMole · 29/05/2014 10:59

They shouldn't gave given sil 60k. Thats where its wrong.

PrincessBabyCat · 29/05/2014 10:59

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

If he was told he'd have to pay them back and he agreed to it, then he has to whether he knew the amount or not. If I took out a loan and didn't look at the numbers, I'd still have to pay.

If he was just told don't worry it's sorted, then the money was a gift. They can't go back on it now.

It sucks because he didn't make a profit, but that's the risk you take when you buy a home/flat.

nauticant · 29/05/2014 11:00

Well, didn't parents help buy out DSis half of the 120,000 house. ie leant 60,000 to DH (to give to his sister) so that he could 'own' the whole house.

No, the PiLs didn't lend anything to the brother. As the OP wrote:

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

BlackDaisies · 29/05/2014 11:08

The thing is they didn't give the dh 60,000 at all. He didn't see any of that. He just effectively paid off the bulk of the mortgage all by himself. He didn't gain in any way from the 60,000. His sister did though. She now owns all of another flat with it. It's like saying they "gave" the sister half the flat but then expected the dh to pay for the whole flat himself, which he did. Why on earth does he owe money for half the flat when he's paid the whole mortgage (minus the initial deposit). Like someone else said, unless they're expecting the SIL to pay the 60 grand back, to make it fair they owe the dh money not the other way round. Otherwise he's had 12 grand towards a flat and she's had 60. It's crazy. No one buying a second person out of a home owes them the full half amount of the purchase price years before it's been paid off! At that point they just owe half the equity.

TheSultanofPing · 29/05/2014 11:09

Surely this would only be fair if Sil had used the 60k to pay off her half of the mortgage. Instead it sounds as though she used it as a deposit on another property.

She has done very well indeed out of this.

Apart from the deposit(paid for by Pil), and the 2 years that Sil paid her half of the mortgage, Op's Dh has paid the whole balance himself. Now he is being asked for another 60k on top. That's not right.

TheSultanofPing · 29/05/2014 11:16

I'm no expert, but I would estimate she was entitled to about 15k. Pil were far too generous.

nauticant · 29/05/2014 11:17

If you want to explain it to the PILs OP, then I'd suggest you draw up a table with three columns, PILs, DH, sister, and under each a set of numbers showing money paid out and money received, together with a total for each column.

Hopefully in your DH's column there'll be something around plus half of the deposit (depending on whether interest is included), in the PILs column there'll be minus £60,000 and also minus the deposit, and in the sister's column there'll be plus £60,000 and plus half of the deposit.

This might help them see where their money went to.

Bearbehind · 29/05/2014 11:20

I'm no expert, but I would estimate she was entitled to about 15k. Pil were far too generous.

Why? How did you get to that figure?

She's already had £60k more than her brother and her share of the house would be nowhere near £15k.

For it to be £15k she would have to have repaid £9k of the mortgage in 2 years (that has to exclude the interest on the mortgage)

Her share hasn't increased in value as the house hasn't gone up.

Damnautocorrect · 29/05/2014 11:24

When I was bought out of my 300k flat we split equity not value. So 10k equity equalled 5k.

The parents messed up but how you get round that without a massive fall out I don't know.

doziedoozie · 29/05/2014 11:27

Perhaps if he worked out how much he has actually paid (surely much more than 120000 over the years) he can say he has paid his whack.

Probably best to get a solicitor or mortgage expert involved to convince the DPs that he doesn't owe them.

erin99 · 29/05/2014 11:29

Yes OP, writing down what everyone has spent should help them understand. Your DH has paid off nearly £120k plus interest, your PIL should be able to see that he's paid so much more for a £120k flat, he can't possibly owe another £60k.

Would it help to turn it round the other way? Your PIL bought half the flat from your sister, but since that money did not go into the mortgage, effectively DH then paid their "half" of the mortgage.

NotAgainTrevor · 29/05/2014 11:30

Right so as I understand it.

The brother and sister receive £12,000 toward deposit on a £120,000 property.

Leaving a mortgage of £108,000.

Mortgage paid for 2 years, as a hypothetical figure lets say they paid off £8,000 in this time. Mortgage outstanding is £100,000.

Therefore the sisters share would be £10,000. Instead the PILS give her £60,000.

Your DH still has the mortgage of £100,000 to pay which he pays off my himself.

He then sells the property having paid for £110,000 of it.

The PIl expect him to pay £60,000 back so he has effectively paid £170,000 for the house.

It is really not that complicated. Your PILS have fucked up massively. The only person who owes them money is the SIL.

Bearbehind · 29/05/2014 11:32

Just a thought - do the parents know how much the house sold for?

It would be perfectly reasonable to assume the value had risen in 13 years, (in fact it is hugely unusual that it hasn't).

Could that be why they want some money back?

Bearbehind · 29/05/2014 11:36

It is really not that complicated. Your PILS have fucked up massively. The only person who owes them money is the SIL.

Totally agree.

OP you really don't need to pay for a solicitor or accountant to sort this out- it is a no brainer.

PIL gave the son £6k and the daughter £66k- end of.

If they want to treat the children fairly either the sister needs to pay her parents back the £60k or the parents need to give the son £60k.

georgeousgeorge · 29/05/2014 11:39

having read this through....

Pay an accountant (an impartial 3rd party who will be believed) to do the numbers and set them out like a balance sheet for your PIL

Effectively either SIL owes PIL circa £50k OR PIL owe your DH circa £50k to be fair, but it will need spelling out to them where it went wrong.

you need the impartiality to avoid a massive family row!

WutheringFrights · 29/05/2014 11:40

Quick Calculations based on a 4% repayment mortgage over 12 years.

Your PIL have paid out £72000 (£6000 depoist for SIL + £6000 deposit for DH + £60,000 to SIL)

Your SIL has essentially been given £66,000 by your PIL and paid out £11,352 (which is 50% of 24 months of mortgage payments based on above mortgage assumption)

Your DH has been given £6000 by your PIL and has paid out £124872 in mortgage repayments (base on 2 years of 50% payments and 10 years of full payments) he then has the £120000 for the equity in the house.

Taking into account all these calculation - this is how much in profit or loss each person is...

PIL -£72000
SIL +£54648
DH +£1128

As far as I can see it is irrelevant what your SIL choose to do with the money that your PIL gave her - that is a whole different situation and really nothing to do with this house. Your DH was paying the mortgage he didn't benefit in anyway from her receiving £60000!

A I say only quick calculations but it looks like your SIL has done very well out of this!

Dutch1e · 29/05/2014 11:43

When your DH originally told SIL that he couldn't afford to buy her out, what figures did they discuss that made him feel he couldn't afford it?

Those numbers would be a good place to start from.

NotAgainTrevor · 29/05/2014 11:44

I'd say the SIL has done even better than that Wuthering as I highly doubt it was a 12 year mortgage term. It was more likely 20 or 25 years and the DH has increased payments as his earning power went up. As he couldn't afford to buy his sister out 12 years ago it is likely much much less had been paid off in that time.

bedraggledmumoftwo · 29/05/2014 11:47

Ah, that answers my earlier question about whose mistake it was if dh was just told we've sorted it with sil- a fait accompli he had no part in. Had he been involved i assume he might have said hold on a minute...

part of me wonders whether sil has really never thought hold on a minute... And kept schtum as she benefitted from the error.

so if it was the parents error then no your dh shouldn't pay up, especially if he never agreed the figures.

the problem is if it wasn't family, what others are saying would stand up- you overpay or undersell something in the real world and you just have to chalk it up to experience and suck it up. If sil was a stranger there would be no comeback for her. But as she's family the original error still matters. I would discuss it with mil and sil, so everyone understands what went wrong. If sil isn't willing or able to repay her parents the excess gift of around £50k, i think this should be incorporated into their will to even things out later, as should any repayment from your dh to pils- the will needs to divide the estate to rectify this inequity later if it cant be properly resolved here and now.

i have to ask though- was there any legal transaction at the time? Surely land registry and the mortgage company must have been involved, to transfer her share of the equity and mortgage to him?

WutheringFrights · 29/05/2014 11:47

That's a fair point Trevor - OP's DH really needs to dig out some paperwork doesn't he!?

TheSultanofPing · 29/05/2014 11:49

Bear I meant 15k originally as opposed to 60k.
She should never have been given that much in the first place.

I got that figure by adding her share of the deposit ( paid for by Pil), to 2 yrs of mortgage payments. I did say that I'm no expert though Grin.

FraidyCat · 29/05/2014 12:07

To sum up, in round terms:

The parents have laid out £72K, £12K deposit plus £60K to sister.

The DH has laid out £108K in capital repayments.

The sister has walked away with 60K.

If the parents want 60K back and want to treat their children equally, 6K should come from DH and 54K from sister.

Maybe the parents are not financially challenged and were just having a senior moment when they said they wanted 60K rather than 6K from DH? Smile