Advice needed for friend being bought out

[CatEyeGlasses]

Hi All,

I’m writing on behalf of a friend and hoping that someone may be able to assist. I think I’m really just looking to sense check what our current understanding of the issue at hand is. I’ll preface this by saying that my friend has sought some legal advice and been advised on the basis of the information disclosed that a meeting with a solicitor for a few hours to fully discuss what the solicitor described as a “very straightforward” matter would be helpful and that doing so will cost approx £1.5 k (£500 per hour plus VAT). Whilst my friend does appreciate the need to obtain sound legal advice, as does my friend, if it is not absolutely necessary, and this matter is straightforward and there’s a risk that the solicitor will only confirm what my pal already knows-the preference would be not to spend that amount. The situation is as follows:

A and B ( and un unmarried couple) purchased a property together for £283,000 in 2018. There are no children.

A and B did not contribute equally to the deposit, A spent more.

Both A and B were in full term employment, throughout the course of the relationship A paid the mortgage and bills, B did not.

A and B are no longer together, A has continued to pay the mortgage in its entirety, despite no longer residing in the home. B remains in the home and pays the bills. A informed B a year after having left that this was not sustainable and so for the last 3 months B has contributed £400 to the mortgage which is approx £1200.

As far as I understand, with a joint tenancy and in the absence of specific steps to protect their financial interests-both parties own 50% each and are equally entitled to 50% of the equity in the home. It is irrelevant who paid the mortgage etc whilst they were a couple in this case. Furthermore, each remains joint and severally liable and the fact that A paid all of the bills and mortgage payments whilst in the relationship has no baring on what they are entitled to moving forward.

B has said that they will not, under any circumstances leave the property. B is looking to remortgage and has offered A £20k. 3 valuations of the property that B had done in April say that it should be marketed at £310,000, £315,000 and £320,000. The remortgage is based on the value of the property being £320,000. According to an online search, the average price of property in the postcode over the last year is £313,000.

B says that all of the agents valuing the property said that as it has issues, it is likely to sell for £10-15k less than the valuations. And that they have no way of raising more than £20k.

On the basis that the lowest valuation of £310,000 is accurate, that minus the remaining mortgage of £234,000 means that there is £76,000 of equity in the property-so each A and B are entitled to £38k.

A is unsure of how to proceed. £38k is almost double the amount being offered. B has previously refused to engage with a mediator. A cannot afford to continue to pay the mortgage and rent on another property, B will not leave the home. A does not want to take the matter to court if it is avoidable and would like for B to remain in the home if that is a possibility but does not feel £20k is a fair settlement. I think A would agree to around £30k but B says this is impossible.

Can anyone provide any guidance or advice? It would be greatly appreciated.

Tricky. I'm pretty sure A is due more for their share of the equity, but the cost of getting that - given B's refusal to engage - is likely to be high. And they're not married, and presumably they are joint tenants?

They're definitely not tenants in common, given they're not married? They didn't make any kind of agreement when they bought together as an unmarried couple? (NB - I made this mistake too first time round, no judgement)

@olderbutwiser first time poster so apologies if doing this incorrectly. Yes that’s very much what my thoughts are-due more but the cost both financially and in terms of the ongoing detrimental impact on A’s mental health may make it entirely pointless.

You’re completely correct, despite being unmarried they are definitely joint tenants. It’s a tough way to learn this lesson for A I think. I don’t judge either-they were young and naive and believed they would spend their lives together when they made the decisions that they did.

If B can't afford to buy A out the house will have to be sold and proceeds split equally if A didn't ring fence their higher deposit.

Why doesn’t A move back in for now and explain it’s impossible to accept the financial outcome so A can’t afford to rent and pay the mortgage.

A has every right to live there.

See if that forces B to compromise.

@notatinydancer I understand that that’s a real likely possibility- I suppose it’s about what the cost of getting to that point will be, both financially and in terms of the mental and emotional toll on A. Despite the breakdown of the relationship, A has no desire to force B out of the home that B wishes to remain in, but equally needs to ensure that the payment accepted is a fair one given the equity. B’s suggestion that the home would only sell for £290k despite valuations to the contrary implies that since 2018 there has only been a £7k increase in the value of the property-which isn’t the case.
Another friend has suggested that A stops paying the mortgage entirely, which I think is risky and unwise (and obviously A remains joint and severally liable for repayments).

@AnellaA yes, A has every right to live there! (Though I think I do recall that an issue can arise is not if when one party moves out of the property following the break up and then tries to regain access whisky the ex is residing there even if they both jointly own it).
That aside and without wishing to disclose too much personal information about A (who has fully consented to having the financial aspects of this shared), the environment is not safe for A. A left against B’s wishes. Notwithstanding the fact that the only people who fully understand a relationship are the people involved in it; from an outsiders perspective it feels as though this is a final and desperate attempt at control by B, who appears to me to be seeking to punish A for finding the courage to leave. B sends unkind correspondence and has outright said that the current situation is A’s fault entirely for leaving (whilst overlooking all of the reasons why A left) and that A should accept the £20k as it is A who has put them in this situation.

@AnellaA sorry, typo-i meant whilst the ex is still living there, not whisky.

@AnellaA sorry, I’m brand new and not doing very well clearly! I’ve just seen further typos in my original response, just for the sake of clarity it was supposed to read:

Though I think I do recall that an issue can if one party moves out of the property following the break up and then tries to regain access whilst the ex is residing there even if they both jointly own it.

Apologies also if there is a very obvious way to edit a post that I’ve missed.

A needs to show they aren’t a push over and if they aren’t willing to do this, in court or negotiations, then it’s best they take the 20k.

I have no idea what the question is re the solicitors work costing £1500. Are they drafting an agreement to the 20k or a letter saying no the property should be sold?

There is a good argument to say A should cut their loses and never have anything to do with B again. That’s a tough and expensive lesson learnt.

If A wants to get their fair share and stop bleeding money, they should stop contributing to the mortgage and let B pay. B can afford it because they are planning on paying it when they buy A out. They should ask for a 35k payout and then state if they go to court they will ask for costs.

What A shouldn’t do is continue to bleed money whilst not getting out of the joint mortgage and not getting their equity back. Because nothing is going to change.

The only thing is how do they hold the property? If it’s joint tenants it’s 50:50 regardless of who paid what

id it’s tenants in commons they either hold as 50:50 or they have a deed of trust stating its held in unequal shares ( and what % each)

thats it

that what they’re legally entitled to

But if the reality is that if A would have costs of more than 18K in taking this to Court, which is entirely possible, then they might be better off taking the 20K now.

Is A absolutely sure that their name can be taken off the mortgage?

.

B either had to buy out a share at least 38k or a needs go get an order to sell the house.

b also needs to have acveirance to take on all the mortgage plus another 38k min. If they can’t do this then will need to sell

A should move back in in the meantime to prevent b sabotaging viewings etc

Thank you all for your really helpful responses so far. I think A is overwhelmed by the whole thing and struggling with B’s behaviour and so it’s making such a difference to read informative and objective replies. My heart really does go out to A because I know how important they feel it is to do the right thing, but I don’t think that that necessarily means having to be done over financially for choosing to end a relationship which is what B is implying. I think it’s that desire to do right by B and an understanding that B didn’t ever believe A would actually leave which has resulted in A continuing to pay the mortgage on the property despite not having lived there for over a year.

@LemonTT forgive my ignorance, I wasn’t aware that A could ask for costs in court. I think A is at the point where there is some recognition that B is taking advantage of the situation and the fact that A pays the mortgage. However, even if A doesn’t want to continue to do so, is also very concerned about ruining both of their credit scores and is worrying that B just won’t pay the mortgage (though B has demonstrated that they are more than able to do so as their intention is to buy A out). B has said in an email that their mother will be assisting them in this, but I’m not sure if that involves the mother actually being added to the mortgage. I agree that nothing will change if A continues to pay-as there’s absolutely no motivation for B to change the current arrangement.

@millymollymoomoo yes-sorry, I may not have articulated that well enough. It’s joint tenants and A understands that it’s irrelevant that they contributed more at the outset and throughout. A is only interested in what they’re legally entitled to and is happy to compromise and settle for less than £38k (50%) but £20k feels like an unfair compromise.

@MooseBeTimeForSnow that is what a lot of our conversations have been around-whether the costs that will be incurred both financially and emotionally to get to the £38k are worth it. Obviously only A can make that decision but A is reluctant to force a sale and it isn’t what B wants either. A would be prepared to settle for less than £38k but not as little as £20k if it is possible to negotiate an increase. A is sure their name can be removed from the mortgage.

I wonder whether it is worth suggesting mediation again, I can’t imagine the courts look too favourably on cases where mediation hasn’t been utilised if it’s at all possible to. When B initially refused to engage with a mediator B said it was because it was unnecessary to do so as they had come to accept the house would have to be sold. B then made the buy out offer of £20k 5 months later. I don’t know if B would engage in negotiations with a mediator at this stage. On the basis of the emails I’ve seen from B I suspect not, unfortunately.

It is an expensive lesson to learn and A will no doubt be much more savvy in the future.

@millymollymoomoo yes, I understand. I don’t think A is as clear cut on having to have £38k, I thought A would settle for £30k but A informed me earlier that they’d be willing to accept £28k and take the hit on the £10k to just be able to move on-but B doesn’t appear to be willing to budge.

Both things cannot be true as far as I can tell, it can’t be the case that B says they will absolutely not leave the home but they will also absolutely not make a higher offer than £20k. If both A and B are entitled to 50% each of the equity in the property, B’s current position comes entirely at A’s expense-it is essentially saying “you will pay for me to remain here, there are no other options and you’ll have to lump it because you left me”. It’s horrid.

There are two roads.

Contact the mortgage provider and ask them to pause the repayment side of the mortgage asap and change it to interest only

Make an application to the court and yes B will have to likely pay the costs when judge has his say

or - just take the 20k because A is paying out £800 a month anyway!

in fact since they left how much have they paid out? Add that up and A could even win half of all that back

A is being very soft on B which is why B is doing this to A!

Also if I was A I would tell B today that I would cancel the DD too for the mortgage then see how B reacts when they get a letter through confirming as much

@Quitelikeit I’ve told A that I think that they’d be able to recoup some of the mortgage payments they have made since leaving (which was £1200 for 12 and has been £800 for the last 4 where B agreed to contribute £400 per month). A is happy to write this off, again, without wishing to disclose anything too personal-the dynamic isn’t a healthy one-A didn’t walk away from a loving, supportive partnership and B has (in my opinion) almost convinced A that it’s their responsibility to continue to incur the financial burden because it was their choice to leave B and B has suffered emotionally as a result. I don’t know quite how to articulate it, but it feels like B has manipulated A into a position of guilt-which is very much how their 9 year relationship operated from what I can see. A wouldn’t have left B high and dry and accepts that it was their decision and not B’s to end the relationship-which is why A was okay with continuing to make the repayments whilst B decided what to do in terms of leaving the home they shared or staying on there, but A moved out 16 months ago-that feels like a decent amount of time to enable B to make plans, financial arrangements etc.

I’ll absolutely suggest changing the mortgage repayment to interest only and A will look into whether that can be done by one person only (obviously it won’t be a possibility if B needs to agree to it). To clarify-ending the mortgage DD would be because of the temporary repayment pause, is that correct?

If it’s a joint mortgage both parties will need to agree and apppy to change it

As only options are

tell B they are applying to court for an order of sale and will ask for costs

accept scraps B offers simply to be done with it and move on

in the meantime A needs to move back in ( however hard that is)

has B got a mortgage in their own name in order to discharge A ?

@millymollymoomoo thanks. Yes, B has an agreement in principle for the remortgage and B’s mum is helping-that’s the information A has been provided by B.

B has also said that the fee for removing the name on the mortgage is £100.

Gosh A has already re-paid 16,000 since they left

Please contact the mortgage provider to discuss interest only payments at the very least

B is truly taking advantage and A is clearly very anxious

Yet B and their housing is no longer As responsibility

If A is as weak (and I mean that kindly) as described then they might as well just agree to the 20k!

B knows that the longer this drags on the more money they are extracting from A

B can clearly afford the mortgage alone since they are prepared to buy A out!

If you stop the direct debit a letter will be sent to the house addressed to both parties - it might be harmful to the credit scores though

I think if you told the mortgage provider legal action was being taken they might pause the mortgage all together if you provided proof of what you were doing legally

There is no harm in ringing them and explaining the scenario and asking for options

Also home insurance often has free legal advice - no harm in ringing them to present your dilemma