Really need some impartial advice on money row with sister!

[Cornberry]

I am in desperate need of an impartial opinion on a sensitive issue.

My parents gave my sister and I a substantial deposit to buy a flat a few years ago. Since that time I have lived in the flat and my sister has lived elsewhere in rented accommodation and now she lives abroad - she had the option to live in the flat too but chose not to. In that time I have taken care of the flat and obviously I (and later on my husband) have paid all the bills and the mortgage etc. We agreed at the outset that my sister and I should split the proceeds 50-50 when it came time to sell.

Now that is time to sell and looking at the figures I realise that our mortgage has come down £30,000 which obviously I have paid since I have been living here. And when we split the money left over after repaying it my sister will get half which seems fair enough because that is what we agreed. However I realise that to bring down our mortgage by £30,000 I have paid in over 50,000 because of the interest. So now it occurs to me that if we split everything 50-50 my sister will get back 15 K, which is half of the money repaid on the mortgage but I will also get in 15 K having paid in 50. This strikes me as unfair. She hasn’t paid anything at all into the flat, which was the agreement and that’s fine, but it seems to me that she should receive a proportion of the increase in value on the property but I am unsure why after I have paid over 50 K into the mortgage to bring it down 30k that she should get 15,000 of it having paid nothing and I should get in 15,000 of it having paid in 50,000. Does that make sense?

Interestingly, my parents do not agree. One of them thinks my sister should get half as agreed and the other one thinks that the point about the interest is a relevant one. I would dearly like to have some opinions from people who are unbiased because I honestly don’t think it’s possible for any of us to be completely impartial on this. I suggested to my sister that she should indeed receive her half of the increase in value but not the repayments, bearing in mind she has never put a cent, and if we split it with her we will she will get more out of the money we paid in than we will.

One issue seems to be one of “changing the goalposts” and my sister has accused me of going back on our agreement to get more money. But the problem is that I was very clueless going into this and I am certain that we had known the considerations at the outset we would have made a different agreement.

Am I being unreasonable?

@Tistheseason17 You're not taking into account the money OP's sister COULD have made from renting out her share of the flat.

You made an agreement. Stick to it. Is this really more important than your relationship with your sister?

I think you're confused here

Deposit 50K property £150k now worth £200K

She gets £25k half the deposit plus £25k have the increase in value

She doesn't get 150k-30k payments £120k

200000-120= 80 'profit' shared

Green you forgot to add

She (OP sister) gets half the market rental value for every single month OP has lived in the property

She (OP sister) gets half the market rental value for every single month OP has lived in the property

So as well as paying £20,000 in interest repayments the op now has to give her sister half the rental value as well.

The OP only has to give her the rental value if OP insists that all (not just 50%) of the interest payments belong to OP. That’s the way to make it fair if people insist on saying that the OP should take the mortgage payments for herself.

Can you withdraw the extra money from the overpayments made? If so I’d do that. We pay more on our mortgage and at any time can just transfer it to our main bank if we need to.

I also think the fact that she loved with your parents rent free complicates things as ( lucky for her) she has managed to benefit substantially from both arrangements.

That would irritate me.

However, working out 50% of the mortgage repayments and the market value 50% rent for the time between buying and of the selling of the property deals with her true share of the property.

How long have you lived there and what is market rent for your property - split that in half and multiply by number of months you lived there - that is the rent you should have paid your dsis. Bills and utilities do not come in to the equation.

& this is why when my ( early 20s) son says he can't see being able to afford a flat on his own and so is thinking ( when education and training done) of buying one jointly with a friend , I say - fabulous , but get a proper agreement signed by both of you covering everyone properly and legally - worth paying for. - a tangent - I know but . ...

You keep saying that your sister CHOSE to live elsewhere

But you CHOSE to live in the flat, you CHOSE to move your partner in and you CHOSE to pay extraneous costs such as building insurance etc

You could have asked your sister for half of these costs

I'm not sure how your sister could (comfortably) have lived in the flat once you'd moved your DP in

You come across as jealous/envious of your sister

Split everything 50/50 and take more care in future with your financial arrangements

And let it go now

You could have chosen to rent out her room to pay her half of the mortgage. You preferred to live alone and then with dp.

But you CHOSE to live in the flat, you CHOSE to move your partner in and you CHOSE to pay extraneous costs such as building insurance etc

I thought the idea was both sisters were supposed to live in the flat and both were to share costs such as mortgage etc.

I don't think people choose to pay building insurance. If there is a mortgage involved you have to have building insurance.

It sounds like your sister wanted to keep all her money and not pay for any upkeep and flit around. If sister had been paying into the house I doubt she would now be living abroad. Taking responsibility means you aren't free to move at a whim. Does her job abroad allow her to pay for half the expenses that should be her responsibility. Seems she wants all of the pay day but none of the work and to benefit from op keeping everything going.

Op might have chose not to pay the mortgage in which case sister would have 50% of nothing and there would have been no argument.

It looks like your parents bought a place for you both but then allowed you to be saddled with a load of debt and let your dsis off but at least one is now saying on top of that you have to give her half of the £30k you have paid separately to pay the mortgage off on top of the £20k mortgage interest.

I too would be mightily pissed off

When you purchased the property you will have agreed and signed documents as to how you own the property. Deeds of trust, tenants in common/ joint tenants. These will have been lodged with the land registry. However, much anyone might want to change these terms the solicitor has to distribute the sale proceeds in accordance with these documents.

90% of people on here disagree with you. Bear that in mind.

Your sister had to rent privately at a premium.

You moved your husband in (who you describe as "staying out of this" - LOL I bet he is!).

Your sister could have decided she just wanted to get a buy to let. She didn't. She could have insisted on getting a lodger into your flat. She didn't.

You are greedy and grabby.

I'll go back on that last comment if you can convincingly answer one question you have studiously ignored:

Why did you overpay the mortgage payments? Why would you do that?

I think the answer is because you considered the house yours from the get go.

You've lived in a proper owned home, with more freedom and less expense than if you were renting. You probably thought you were made when your sister decided not to live in it.

Stop being so ungrateful and venal.

If your parents had given you each a deposit and your sister took her half then - at that time - and not invested her money in the flat

Would you have afforded the mortgage solo?
How much is the calculation of the mortgage amount without her half of the deposit- after all having that half of the deposit has saved you interest over the time of the mortgage- so have you calculated how much it’s saved you?

Err, the sister didn't choose to pay rent in other private rental she and her husband stayed rent free with her parents. Thpugh how long for before moving abroad is unclear.

I am split on this:

Did you had an agreement on selling the property to split 50-50?

You could suggest returning her half of the deposit and 50% of the increase in value of the house. You could even lay it out so she sees exactly what she would get.

She may be accusing you of changing the goalposts to get more money, but its more accurate you’re changing them based on experience.

Importantly though, Do you think she should be compensated for paying rent for however many hears though - she did have to do that, which seems unfair. If you hadn’t lived in the property you wouldn’t see that 50k returned. That would have gone on rent.

So as an alternative view you’re paying rent to live in the house, and maybe half that rent went to your sister as part landlord?

You had the benefit of sole use of the flat, also your DH lived there for some of it. Did you both pay her proportionate rent for her part of the property whilst you were there?

I think it should be split 50/50, she could have asked that you paid her out at any time and that may have meant you had to sell.

Sorry OP, I am also team 50/50. You seem confused as to what facts are pertinent. It doesn't matter that your sister lived rent free with your parents, or how she lived during the rest of the time.

You can't claim you don't think of the flat as a commercial enterprise, while still going after the extra money you think you've earned. You can't claim your sister 'chose' not to live in it as a reason you're owed more, presumably by the same token you 'chose' not to also live with your parents rent free and you both enjoy rental income from the flat.

If you insist on being brutal about it, work out the total market value of rent for the time you lived there. This is the potential income your shared asset could have generated. Then deduct costs like improvements, but you can't deduct council tax or property management fees as any tenant would have had to pay them and not the owner.

Then work out the total mortgage repayments (excluding your overpayments) made over this time. If you subtract this from the hypothetical rental income, how much is left? Half of this is what you owe your sister in my mind. If your overpayments exceed half of that, you could claim she owes you that difference. But if prices are anything like what they are around me, you may find you end up oweing her money!

I think you are confused between your sister investing in 50% of the flat (which deserves 50 % of the rental income) and loaning/giving you her deposit amount, which doesn't buy her a stake in the flat and it's generated income and increased value.

The situation you describe sister owned half - half of flat and half of mortgage. She could have rented out her half, but instead OP had the whole apartment. As others have said, think about if neither of you had lived there.

Random tenant paid the rent each month, which covered the mortgage and other flat expenses (as you said mortgage payment was cheaper than rental value). At the end, mortgage paid down with rental, sell the flat and each get half. Most people would agree with this surely, simple "went halves, split in half at end, market value increase is a shared bonus".

Now consider that OP is this "tenant". Neither sister has had the hassle of gaps between tenancies, inspections, damage etc. Both still own 50% of the total equity and sister deserves half of total equity.

If the flat was £200k and the deposit was £50k - £25 each
Leaving you with a £150 mortgage
How much would the mortgage have cost over the years you’ve lived there if it had been £175k?
What is the difference in mortgage cost between £150k and £175k?

Because that extra £25k deposit will have saved money on the mortgage repayments over the years you have lived in the property

See roughly after 10 years of paying £711 on £150k you’d have £102,00 left

With £175k you’d pay £830 and after 10 years have £120k left

So not only has your sister saved you in the region of £120 a month in mortgage repayments the money she had invested would have saved you £18k I’m interested

Based on obviously a £25k deposit each on a £200k property at 3%

So based on those figures a 50:50 split op is you being fair with your sister

The sister only lived with their pare ta for a year. It sounds like they rented for most of that time.

I think people are being unfair to OP. She had her views and this was supported by one of their parents. They came her to gage the opinion of people not emotionally involved which show an interest in considering what is fair.

OP now knows that the vast majority didn't agree with her and she is taking this into consideration. What more is she supposed to do?

OP remember that no matter what, a sibling is priceless so don't let this get between you. Agree and make up. You might need each other at another time.

Gosh jt me sad what money Does to people. Just pay your sister get half as per the agreement. She's legally entitled to that if she wants it so unless you plan on taking her to court over it than that's what you need to do

I think it's weird and unfair to want your mortgage payments/ interest back. If you had lived elsewhere would you get your rental payments back? No, that's the cost of housing yourself. Your sister paid rent and she won't get that back. I think you should stick to the original agreement because if your sister had known that you would question it in this way she might've made different decisions e.g lived in the flat herself or told you not to. You've both made lots of money and you didn't pay rent to your sister, neither did she benefit from her property until now