To say FIL doesn't own a third of our house?

[winnie765]

We bought out first house earlier this year with a 30% deposit of approx £100k. Of this, FIL gifted dh &30k. He declared it was a gift in the paperwork during the process and his name is not on the deeds.

But he keeps saying things like 'I own a third of this house' and if it was sold in the future it would need to be divided three ways. He's even talking about getting us to sign something so he will get his money if we decide to sell and move.

AIBU to think this isn't quite right?

He declared it was a gift in the paperwork during the process and his name is not on the deeds

Do you mean a proper deed of gift was drawn up making it clear that he has no claim on the money (and therefore might be liable to tax if he dies within 7 yrs)? If so he is now saying he lied on a legal document to avoid tax.

Is he actually serious, having a wind up or someone who enjoys playing "games" with his family? If the first or third try to pay him back, if the middle one have a conversation first.

I would look into extending the mortgage or working out some other repayment scheme (but get formal receipts for payment and an agreement). If its a loan there are tax implications for him. No way does "own" a third of your house.

Lots of people claim that family loans are a gift on the official documents so that they don't count towards affordability checks. That doesn't mean there isn't an informal agreement in place that the money will be repaid.

If this is the case in OP's situation then it would pretty unkind of her to stand by the letter of the law and simply refuse - whatever the legal situation. The issue needs clarifying with her FIL.

As the OP said right from the start, it was a GIFT not an informal loan (whatever that is).

It may have been necessary or expedient to record it formally as a gift (see examples from other posters on this thread), but the OP's husband may have verbally agreed to pay it back. If interest-free, loaning 30k was still a kind thing to do. Sounds like some wires have got crossed here and I would not be remotely surprised if OP's husband may not have been clear enough when he and his father were arranging this between them.

Either way, it's clear the FIL views it as a loan. I would 100% hasten to repay it, whether or not the FIL could legally call it in.

Maybe sit him down (with a calculator). Say 'we understand that the £30k you gave us was a loan, we intend to pay it back as soon as we can. However, that is NOT a 'third of the house', and show him the calculations (on the calculator).

See what he says. He might backtrack, when the penny drops and he realises that his 'investment' is a tenth of the house and say that it was a gift, If not, then at least you will have pointed out what you actually do owe. Don't let it drag on, otherwise, in five years time, he might point out that your house is now worth £350,000 and you owe him a third of that value.

Get him paid back before inheritance and other siblings start becoming an issue.

Your DH needs to have a conversation with him about paying back the £30K.

I wouldn’t want this hanging over me.

I think it sounds very much like FIL and DH made a verbal agreement in private about the money being officially a gift but unofficially a loan. How important to your DH is an ongoing good relationship with his father and wider family? Is it worth more to him than £30K? You might not particularly care if your ILs fall out with you over this, but your DH might. If FIL is now going to insist that this money was a loan and is going to tell others as much, then you need to work out a way to give him back his £30K before the situation sours any more.

Pay him back the £30,000 asap. With interest.

Can you raise the 30k now ? What would he do if you paid it back ?

Yup what PP have said, legally it would be a "jog on".

But if you want to stay on good terms, say "now we've understood this was a loan, not a gift as we originally thought, what sort of period are you happy to have it paid back over? (Do this after you and your husband have agreed what you can manage - for instance, a five year period would commit you to £500 per month which is a big outlay.)

Or call his bluff and just say "oh, you are funny, fancy thinking you own a third of our house because you gifted us the deposit. I always thought you were joking when you said that..."

Been in this EXACT situation... You haven't had any legal agreement drawn up to say they own a percentage or momentary amount of the property, so no, legally they dont own anything. The money was a gift, has been listed as so, and a gift is not something you benefit back from. If it were received as a loan/investment with stipulations, such as "the amount increases or decreases in line with the value of the property", the solicitors would have drawn up a contract for this, and all parties would have had to sign with witnesses etc. He's talking out of his arse. We had a similar situation with family gifting us money to purchase property, then after moving suggested some of it should have been a loan, and asked for an agreement to be drawn up so if we made money off the house, they'd get "their share". It worried me at the time, and they'd make remarks about how they "owned some of our house" used to drive me nuts, we never got an agreement drawn up, as far as I was concerned that should have been discussed pre move, and afterwards I didn't want it to affect our mortgage agreement, as it would look a bit dodgy to suddenly say someone else owns a % of our house. We moved last year, and made a nice profit on the old house, but needed every penny we made to be able to afford our new house. I was worried they might bring it up, but nothing was said, and hasn't since. I knew legally they wouldn't have been able to take any money from us, but obviously wouldn't want a big family falling out over money. My argument has always been, if the money was always meant to be a loan, we should have been told this from day one, and it may have influenced the sort of house we bought. We purposely bought a "doer upper" so we could make a profit and climb the ladder. If we'd have thought that selling and making a profit would have meant we owed a % of that money, we would have gone for a house that was already sorted or a new build, and stayed there long term. As I said, luckily for us, it hasn't been brought up since we moved again, so hoping they've just written it off and it won't get brought up in the future. Sounds like your family member is just using it as a bragging sort of talk "I have investments in property" type of crap. Just ignore it. Legally nothing they can do, and if they do want to cause family drama over it, I'd offer to pay it back at £5 a month, or some measley sum that will never actually pay the loan off, and say that's all we can afford. Congrats on your new home. X

He owns nothing of the sort. If he wanted to go down that argument he could say he owns the proportion of £30k of the original price if you want so in fact he owns less than 10% as a percentage of the property value - £100k being 30% of the value. But that's only if you want to do that he signed any entitlement away.

He has no claim but I would be seriously trying to figure out how to repay him the 30k as he clearly thinks of that money as an investment to produce a profit, despite the fact that he made it a gift legally. I wouldn't want to feel beholden under these circumstances.

Does your DH have a good relationship with his dad? Also, is there any chance that your FIL misinterpreted the situation because he was accidentally given the impression that he would have some claim? Did he clearly identify the money as a gift as opposed to a loan?

Your DH or better both of you need to have the uncomfortable conversation with your FIL to make it absolutely clear that he has no claim on your home or even the money he gave as a gift but that you will endeavor to pay back the 30k as soon as possible.

I agree with Greyponcho, you need to sort out this issue now because it'll be an even bigger mess when you want to sell the property. The easiest solution would be to return the money but where would you find 30K?

Is he paying 30% of the mortgage then? Because that's the only way he would own 30% of the house.

Those pointing out the math aspect and saying he in theory would only own 10%: this simple mathematical mix up is one of reasons why I was suggesting dementia or perhaps other mental failings. His faculties may be going, either arithmetic-wise or is misremembering what he initially said or documents he signed.

Wht “isn’t quite right”
Is that you accepted a very large amount of money without having an open and frank discussion with your fil

Legally he does not have a leg to stand on, in the interests of good family relations your dh should be taking his father out for a beer and a chat and find out why his father would think such a thing. It really does need to be sorted out, as it could cause permanent rifts in the family.

Stay well out of it op, get your dh to talk to his family about it in private, and try and get it resolved.

It could be that FIL assumed it was a loan (it sounds like that to me) and you and DH assumed it was gifted. The paperwork could be simply a way to hand the money to you. Dealing with this with sensitivity is paramount.

@Amibeingdaft81 you don’t know that.

Are you absolutely sure it was not a loan? It is a pretty big misunderstanding op

Maybe sit him down (with a calculator). Say 'we understand that the £30k you gave us was a loan, we intend to pay it back as soon as we can. However, that is NOT a 'third of the house', and show him the calculations (on the calculator).

You see most people would do this in real life

Mumsnet seems to be a different world though, one where you don’t talk to family members but rather start threads seeking the opinions of complete strangers on the the matter

OP, I agree with @ComtesseDeSpair in that although FIL gifted the money it might have been intended to be a loan. As others have mentioned gifting the money avoids issues relating to mortgage affordability and/ or your FIL entering a charge on your property.

What does your dh say about it?

Poor maths and dubious morals. Ask him if he’s asking for his “gift” back?

^^ this with bells on!

1/3 of the house!!! Hahahahaha. I assume he's also been paying a third of the mortgage each month and 1/3 of the maintenance.

What a tit he is

Interesting thread as my ds is now dealing with the results of a similar situation. Ds and his wife are separating (he’s devastated but that’s a whole other thread). Anyway it turns out (I certainly never knew) that her parents gifted her 30k towards the deposit on their house when they got married. Now in accordance with the deed of trust Dil does of course get her deposit plus 50% of any profit on the house, but her parents are talking to ds as though it’s their money. They keep saying “we invested money in your house and we want it back.” Irritating but irrelevant to ds (it’s between her and her parents what she does with that money), and I’ve told him to ignore ignore ignore.

What’s more annoying is it turns out they also bought various household appliances for them such as washing machine etc (ds never told me any of this and frankly I’m shocked). Now of course they are telling ds he can’t have any of those things as they paid for them. Honestly I would have warned him about this kind of shitty situation if I’d known. But I suppose he never imagined his marriage ending.

Sorry didn’t mean to take over your thread OP. I suppose I’m trying to say sometimes it’s better not to accept monetary gifts from in laws if they think they are buying control over what happens to that gift.

Missyb1 I'm sorry for your son. Sounds like he is well out of it and I hope he will be able to see that as time goes on.

£30K is a large gift. There's no such thing as a free lunch.

Legally I doubt he has a leg to stand on if the deeds and mortgage are not in his name, but I'd be looking to raise and return the thirty grand as soon as possible. Even remortgage the property if necessary.

It sounds as if this was an effort to assert control, but this wasn't communicated to you until the money was used and you were safely under obligation. Time to discharge that obligation, OP.