DP's mum wants him to leave her half our flat

[Kfcinbed]

My DP’s mother wants him to leave half of our new flat to her if he dies.

My DP and I are in the process of buying a flat- I had saved my half of the deposit and he borrowed some of his half from his mum, who said he could pay in back within the next five years with no problems/ terms etc. The amount he borrowed is not a big loan in terms of how much of the property it is worth - (2.5%).

We had decided together to buy the flat as joint tenants meaning that if something happens to one of us, the other inherits the flat with no problems.

We’re two weeks away from our estimated completion date and his mum has now said we have to change it to tenants in common, and that he must leave a will stipulating that if he dies, his half of the flat will go to her. If not, she wants her money back now.

She lives all the way across the world and would have no use for a flat in london.

Her reasoning is that she wants to protect her investment (though it is a loan, not an investment) and is not open to anything other than this option (we have suggested a contract stating I will pay her back).

I feel that this is grossly unfair considering it was not mentioned at the time of lending (months ago) and DP and I both feel that we would want each other to inherit if the worst was to happen.

Am I wrong to feel insulted and like this is unfair of her to ask?

OP - you should only consider a joint tenency. Anything else will be putting you at financial risk.

I am not an expert, but as far as I am aware property that is jointly owned is automatically passed to the surving partner. I believe that the value does not then form part of the total estate for inheritance tax purposes (I may be wrong, and happy to be corrected). However, if a property is owned by tenants in common, then the value is included as part of the estate. The thresholds for paying inhertiance tax aren't that high now, compared to the price of property. If the worse case scenario happened, you could be forced out of your home to pay a tax bill.

Have you had a discussion with your DP as to who you would leave your share of the flat to should you pass away before him? Surely he would't think it was going too him, after all you've paid your own deposit!

Please don't do this. As other posters have said, it is all about control. His mother is doing a pretty fine job of meddling in your relationship even from a long distance.

if you need the cash do it as she asks then just change it back?

I think you're safer buying alone. This event says a lot about your partner and his priorities. Getting further involved with him, children, marriage etc will always have that cloud of his mother hanging over it.
Also as the higher earner, if you are contributing more to bills/renovations, you will be left out of pocket only being entitled to half the property.
I imagine if DP dies MIL will force you to sell up and give her her share. You need more security.

I'd do nothing less than joint tenants.

The most I'd agree to is that she gets left 2.5% value of the house as that's her contribution.

Absolutely no way would I be agreeing to her gaining 47.5% value. Bearing in mind her 2.5% is an investment if the property value increases.

Tbh on the information you've given I'd be wary of any future with a DP who values his mothers unreasonable demands over your future monetary security. Therefore the option of you buying and him renting from you seems the most sensible and safe for you.

Go it alone then his mum can buy him a buy to let if she wants him on the property ladder and she can inherit that!

@BerylStreep repaying her is solely his responsibility - we have discussed that she is not loaning us the money, she's loaning him. I won't be repaying her at all.

All your replies are making me more confident in my initial response of disgust at her request- thank you.

@OffToBedhampton do you have any more information about changing to joint tenancy? From what I can see on the land registry website it looks fairly simple but if this isn't the case I'd like to know before we agree to anything

So, for a decreasing loan of 2.5% of the value of the property, she could, if the worst was to happen, own 50% of your flat/house. No way.

In terms of DP not contributing half- he would be paying half of the mortgage and half of the deposit (through his mother), even though my salary is higher. We agreed we wanted everything to be equal to avoid any uncertainty down the line.

After further thought I wouldn't buy with him, he doesn't seem ready yet.If you do decide to buy with him please take legal advice not on what the intentions will be but what they actually are and can be banked on.

I'd forget all the bullshit rigmarole and just buy on my own. Your primary concern should be protecting yourself. As it stands, the only one being protected is him, as he gets ownership in a property that he could not otherwise afford. TBH, I would never buy a property with someone to whom I am not married. I know others do with no problem, but I would not.

If his earnings should improve (or you should marry) he could always 'buy' half of the flat from you and you could get the title changed and re-mortgage in both names.

Don’t give her the final say. You need to decide whether you are willing to abandon the purchase or not and how to protect your deposit money. Given the circumstances, you are not willing to get married but quite happy to be subsiding a partner whose mother has a hold over him.

Also when agreeing how to pay the 2.5% be very clear if it is x sum as a loan or 2.5% of the property. Do not give her a percentage of the house (in the will or any other document) for a relatively small loan without being totally sure of the potential impact.

Eg hypothetically

House currently worth £400k
Her loan 10k (2.5%)
Your deposit 50k (12.5%)
You take out a mortgage of £340k at 3% (1612 per month)

In ten years time you and DP have paid £193440 in mortgage payments (although you a higher percentage as the higher earner). She has spent nothing other than the original loan.

After 10 years your remaining debt is approx 234k. The house is currently worth £500k due to inflation. You have built up £266k of equity. Your DP then dies.

If you say she is owed £2.5% of the house value you would need to give her £12.5k although 2.5% of total equity would be £6.5k. The numbers aren’t outrageous at that percentage level but you might have already paid off the loan so you would need to be very careful how you word any absolute entitlement to a percentage so to not double pay.

At 50% (which is totally bonkers) those figures would be £250k(total) and £133k (of equity). Those numbers alone should show how unreasonable she has been to suggest the 50% share. I’m glad you’ve taken that option off the table but do not under any circumstances let yourself be bullied into reconsidering it.

I really think buying alone would be best your move.

He could save up and then buy 50% off you. He now knows any money from his DM comes with strings attached...

The thing is that unless you are saving your excess salary you will inevitably be contributing more to your joint cost of living as a couple. If you can afford to save the excess then it gets back to just buy yourself and charge him rent. You could charge him below the rent a room tax free limit and then there would be no tax implications and you would be giving him the opportunity to save to buy in to your joint property later or invest separately to protect himself - it sounds like his DM will be right there for him should he ever find himself without you anyway.

KFC, I'll give you the 2.5% for a 25% stake in your new flat.
Put that to your boyfriend, it's a great deal isn't it? 🤣

I'd suggest not giving his mother any options as to what you do. You two should decide yourselves and inform her. I also would want him to show in his actions that he's committed to you.

1. If you can find the 2.5% yourself, pay it (and have this reflected in your %holding). Bf returns the money.

1. Tell your seller that unfortunately you can no longer offer the full money and reduce your offer accordingly. Bf returns the money.

1. Put a pause on the house buying for now. Bf returns the money and saves.

So are you saying that you can buy alone without his deposit?

Even if he was expecting money from his mum, you'd have thought that he would have wanted to have saved as much as possible to reduce any mortgage.

Like others, I wouldn't be buying with this man at all and neither would I marry him as things stand

Avoiding family discord is a noble aim, but not at this price. The three "alternatives" mentioned are great, but don't address the underlying issues of his determination not to "upset" his DM, not to mention the appeasement

Sooner or later you'll need to find out where his loyalties really lie and it might as well be now, before you get too enmeshed financially and they're both in a position to make claims

BTW, can I ask where his mother actually lives?

DianaBlythe love your would be response to MIL. Perfect, hope the OP reads it.

Can't he just leave her the amount he borrowed?

DP's mother is only doing what any solicitor would advise her to do. Well, he wouldn't have advised her to sign a document saying that her loan was a gift, because that would be illegal. And any official document making it clear that it's not a gift would put her - and her son - in a risky position. But, once she'd done this, as a favour to her son, she has no security for her money.

He's family and she trusts him. But if he dies, under joint tenancy, she'd have no guarantee of getting her money back. Also, couples split up. Sorting out the flat could be very messy. Op and her Dp might be happy now for each other to get the entire flat, but that would change if the relationship soured.

She may well be a manipulative controlling cow and her son might be a weak wuss without the guts to stand up to her, but the same issue would apply to anyone, related or not, who got involved in pretending their loan was really a gift to con the bank into granting a mortgage.

Which is why it's illegal, in case anyone was thinking of doing it.

OP, this is what you both need to do if you want to buy this property with the 'gift' from your DPs mother.
I'm assuming that she has already given the money to you? If so, you don't actually need to do anything. You've got the money, buy the house and set up a standing order to repay her once the purchase has gone through.
If she hasn't given you the money yet, then you should agree to her request in order to be able to buy, but once you've got the house then you need to change the tenancy as outlined here.
www.gov.uk/joint-property-ownership/change-from-tenants-in-common-to-joint-tenants
It's easy to do, you don't need her agreement, and the ownership of the property will go to the surviving person should one of you die. It does not form part of their estate so it's irrelevant what a will says. She has no need to be informed about this! What you could also do is set up a reducing term life insurance policy for the amount she has lent you so that if he does die, she gets her money back less what you've paid her already.
My DD is buying a house, I am gifting her some money but I would never dream of demanding she makes a will to give me any share in the property should she die!

Just RTFT - please don't agree to what his mother wants Op as it does nothing but jeopardise your position. Either pull out completely or buy it alone if you can afford it. Anything else is madness on your part.

@diddl I can afford to buy alone, but a smaller property

@Soontobe60 she has already gifted us the money, but DP doesn't want to go ahead against her explicit wishes so we will be returning the money if we can't come to an agreement. A reducing life insurance policy is interesting. I will look into it!

Just go for Option 3. If you can afford it - it'll also be so satisfying to listen to your DP telling her that you've bought it all in your name because 1. She was pissing you both around and 2. He's said No to her. And now he's not on the property ladder and no, she's not welcome to stay in your flat.