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?

hrd she should get half the equity.

OP has been paying no rent (0 cents) to live in her sisters half of the house for years (and even moved in her husband).

If she’d been properly paying her sister the market rate rent for using the sisters half of the property, then yes you might have a valid point. But she didn’t.

If the property had been rented out, do you still think it would be fair for one sister to get more than 50% of the equity?

Tbh you should have both paid half the mortgage and then you paid her half rent. So in those terms, YABU.

You're sister has not made a penny from the house when she could have rented it out for a lot.
You have enjoyed living there and paying off your mortgage and will also reap the benefits.
50:50 split absolutely. I think you're a CF

Many thanks indeed your comments. This has been very helpful. I suppose that we have never considered the flat as a commercial endeavour, and my perspective has been that my sister has literally signed a piece of paper and has done nothing else. I agree with the poster above who said the mortgage payments are separate, the deposit should be split along with the profit. Many people have made the point of my sister paying rent elsewhere. This is of course relevant, but becomes more complicated when, as I said she chose not to live in a flat, and she and her husband both lived with my parents rent-free for a year, and so there are many complicating factors. Also the point about us not paying rent I don’t understand. We pay the mortgage which is equivalent of paying rent. We also paid all the associated costs with the joint freehold, buildings insurance, extra payments to the bank for mortgage fixed rate agreements, and i do all the leg work - for the purchase and and sale. Solicitors, estate agents, repairs on the flat. All things which would be her responsibility but are not by virtue of her sister being the live in landlord. I feel like it’s petty to bring this up but it contributes to the overall picture. I have also made overpayments on our mortgage, which of course bring down the overall costs quite a bit. I think it depends on how you look at it. I suppose my sister’s perspective is that which many people have given, which is that rent is more than our mortgage. However my perspective, and I’m sorry if this seems greedy, but I don’t think it is, is that my parents gave her a certain amount of money to put into the flat, and we have had the benefit of living here, yes but also the work and responsibility of running and maintaining the property. My sister just signed a document. It seems to me that she should get back how deposit plus her share of the increase in value. But I take the point about the rental value. Thank you again for your comments.

Whose name is the flat in, both of yours or your po

Parents

Both our names

You sound bitter OP.
Just split half and be done with it. Stop going around in circles nit picking every single bit of cash.
You've been given a flat. And all you can say is how your sister lived rent free at your parents. FFS 🙈

You should definitely, definitely IMO get mortgage overpayments and maintenance charges back in full. Not to get these back before splitting profit would be very unfair.

You dont see the mortgage as the equilvalent of paying rent though as you want it back from the sale

I sold my mums house when she died. I cleaned it, put it on market and did all the awful paperwork. That does not entitle me to extra money from the house. It doesn't work like that

Could you buy her out of it ?

You paid the mortgage which is the same as rent, yes, but now you want it back. You wouldn’t get rent back. Yabu.

Why on earth did you over pay the mortgage? You should have communicated with your sister. You’ve been treating and thinking about this flat as if it is your own. It isn’t.

Sorry oppressively but your a massive cf.
Legally you don't have a leg to stand on.
Stop being greedy and causing family upset

we have had the benefit of living here, yes but also the work and responsibility of running and maintaining the property

You say that the mortgage payments are lower than the market rent you would have paid if you'd rented the flat commercially. So the running costs in your time etc, are making up the difference.

And you'd have had to do them in any property you owned. You are naive to think otherwise. If you had both chosen not to live there and rented it out commercially, you'd either have had to pay someone to do these things, ir done them between yourselves.

I think you are grasping at straws frankly. If I were your sister, I'd be fuming if I read your most recent post, as you are making some moral judgements about her behaviour (living rent-free with your parents) - she could counter by saying that you "moved your husband in."

You bought a flat together with an agreement about both buying and selling it. You made different living choices, but your choice has had impact on her choice, and vice versa - her choice has made an impact on your choice.

You now want to renege on your agreement? Do you really want to cause what could be a lifetime rift between you?

YABU by persistently ignoring the clear financial benefit you have gained from living in a place at under market costs.

YABU to not factor in the rent she has paid living elsewhere as well as the mortgage you have paid - ignoring it and saying you take back from the sale what you have put in means she has had to pay for accommodation all these years but you have lived for free - that doesn’t sound fair either.

You are being greedy and grabby btw. I can’t believe you’d fall out with your sister over this, which is what will happen if you keep stamping your trotters about wanting more money. How revolting.

YABU. The property is held in trust for the two of you equally, as you agreed. There has been no change to the agreement so it stands. You have had the benefit of living at the property whilst she has not. The mortgage payments recognise that benefit, they are known in law as an occupation rent. That is all there is to it, I’m afraid.

OP would you show your parents or your sister what you've said on this thread?

Your instinctive response to that question might give you some guidance.

Why did you over pay on a property jointly split with your sister without an agreement or a conversation about what would happen?

Wow you are going to end up with a very bad relationship with your sister. She lived rent free with your parents for a yet, compared to you living rent free in her half of the house for many years! You said that paying the mortgage is equivalent of rent, but you want to keep the half of the rent that would have gone to your sister to yourself.

Why don’t you sit down and work out the actual financial position of the two scenarios, or how much each of you would end up with if...
1 - the position you’re proposing
2 - where you’d have ended up if the house had been rented out from the start and you and your sister had shared all rental income 50/50 and paid essential maintenance and insurances 50/50

You will see that 1 ends up with your sister in a much worse position than 2 - how is that fair to her?

If the property had lost value and was worth less than the mortgage, would your sister be helping to pay off the mortgage 50:50 if you had to sell it?

I dont think so, she would say the mortgage deficit was on you.

I think she gets her 50% of the deposit back, any increase in value that the 50% has generated and is lucky that she was able to invest in a propert that someone else looked after and maintained for her all those years and she just had to sit back and collect her profit at the end of it.

You've been very foolish. Paying down a joint mortgage to which the other person is not contributing whilst they live rent free? What were you thinking? You've learnt a very expensive lesson. I think you have no choice now but to cut your losses.

Mortgage is different to rent. The capital that you have paid off should be yours. If you had had an interest only mortgage you wouldn’t have had to pay these. Why not work out the costs you have incurred whilst living in the property and deduct those from any profit made before splitting it 50/50.

Ok you were silly over paying a joint mortgage - what were you thinking. How much did you overpay?

How much were mortgage payments in comparison to rental value? If mortgage was less than what you would have been paying in rent then you need to agree to 50:50 split.