Ensuring fair division of property assets - unmarried

[herbaceous]

Hello

I'm after some advice. DP and I own a house in London, and are thinking of moving out to the Kent coast for schools, and also to release the equity, and buy an investment property. I don't really have a pension to speak of, but a lot of equity, so getting the finances right at this stage is pretty imperative.

We bought the house in 2005 for £272K with a £140K deposit from me, thanks to a profit made on my old flat. Before we exchanged contacts we were going to sort out a deed of trust enshrining that money as mine, but the solicitor left the practice, events galloped along and I thought 'I'll sort it out afterwards'. Of course, I didn't.

For three years we both paid into the mortgage equally. Then in 2008 we had our son, so (by mutual consent) I stopped working full time and my income just paid for childcare, and bits and bobs. DP paid the mortgage.

The house is now worth £825K, so this means £700K equity once we pay off the mortgage. But how to decide who 'owns' what?

Do I just take 'my' £140K out, do a proper Declaration of Trust in our next property, and that's that? Or as I could be said that my deposit paid for half of the house, do I now own half of the house, i.e. £400K's worth?

DP did pay more of the mortgage off, but it could be said he would have paid rent anyway, and without my deposit he would have no house. Or does he own £40K more than me (how much of the mortgage he's paid) of the equity?

DP refuses to discuss any of this, as he feels this implies that if we split up he wouldn't 'do the right thing'. This is of course highly enraging. And what, exactly, is 'the right thing'? He also has refused in the past to get married, which would solve the problem but probably mean I'd lose out financially.

So, before we make a big move with big amounts of money, I want to create a solution to propose to him. If he doesn't agree, is this the sort of thing a solicitor could advise on?

Thanks!

I don't think you can take out the money that's you put in if your not willing to give him the money that he put in.

Putting in a huge deposit is not the same as paying more of the mortgage when you were being primary carer to your joint child. This is an object lesson in why things should be sorted out up front. But hindsight is a wonderful thing. His refusal to discuss reasonably, almost certainly means that he would not be fair in the event of a split. I would look for a compromise that protects your 140k and how it has increased as a stake in the property, whilst allowing him some leeway for the additional payments. Don't let this issue roll on into the next property, whatever you do.

Do you think it just evens out - your £140k v he paying the mortgage since the child came (not sure how many years you 've been at home with the child however)? If you do think it pretty much evens out. I tink it's not been very long as you have just paid £7k off the original loan.

if it went to court you would probably get 50% each as that is what the registration says, the legal title. So it would not be a bad idea to start from the point of view of 50%. You may feel you are entitled to more particularly as ever with so many women you've sacrificed your whole career on the altar of a husband's and been the one holding the baby at home.

Find out how much equity you can take out (based on his salary presumably not yours as you are not working) - it may be you cannot have the property in your name at all and you will be done over yet again. I don't understand why you let the original arrangements just not be put in place right at the start. SO you may be in even more of a financial mess if you buy an investment property as a buy to let with a buy to let loan as it may have to be in his name unless it can be bought entirely in cash.
If it can be bought in cash perhaps argue your original deposit was 50% of the purchase price so you could try to say you are entitled to 50% of the equity gain i.e. 350,000 plus some of the other £350 gain as you paid mortgage and minded his child - say 50% of that. So perhaps your entitlement shoudl be to 75% of £700k = £525k therefore take out your equity and buy a property just in your name for cash but you probably would not get a lender happy to do that.

I would probably just ringfence your original deposit and not the entire half of the equity.

I don't think he needs any break for his mortgage payments - you went parttime to mind your mutual child - presumably you didn't charge him childcare fees?

Given your loss of earnings, already and going forward, loss of income etc. I'd want half the property as mine due to the deposit plus half of the rest, as an equally shared asset as you are looking after your mutual child.

Thanks all for thoughts so far.

My thinking is ring fence my original deposit, as that's pretty substantial, and the rest 'comes out in the wash'. Though some of my stroppier friends still think I'd be getting a bad deal.

Lucysky - I do of course wish I'd sorted it out earlier. I thought it would be simple to do so, after buying this house, and we could do it while we sort out our wills. But that hasn't happened either. Re new mortgage, we'd hope to buy both a 'live in' house and the investment one for cash, and have no mortgage. Or a very small BTL interest-only one.

There is of course the general issue of his refusal to discuss anything important, which isn't great.

I think these suggestions are reasonable ^^ but I think you will have a battle on your hands and you have no legal rights. He cannot cancel out your huge deposit because he kept earning whilst you jointly agreed to be a stay at home parent.

Sorry - cross-posted.

Oh yes - his mortgage payments while I was on childcare duty are a mere £40K or so, which is a drop in the ocean. And, indeed, could be classed as 'joint' as it was mutually agreed that he'd earn and I'd look after child.

The reason not much of the mortgage has been paid off is because we added £25K to it a few years ago to do up the kitchen and stuff.

What's so vexing is he won't discuss it, and doesn't understand why I need to get it sorted. The sums of money we're talking about are the difference between penury and relative luxury in my old age...

It is an interesting issue. In our case (divorce after 19 years) the only reason we afforded this big house which went up in value is because I earned so much we could take out a massive loan (the gearing) - we both worked full time always. So equitably more of the equity should be mine. Most of the reason we had a big deposit for this house was because of my earnings. Not that any of that mattered as divorce law is totally different and irrelevant to this thread.

So you might own two properties without any mortgage worth together £700k both in joint names but make sure perhaps in relation to the buy to let one that you have £140k more equity than your partner does and perhaps do a trust deed this time saying how both these properties will be owned and what if one wants to sell one and the other doesn't - quite a common clause to put into cohabitation agreements. You might also want all the buy to let in your name or more than him so that the rent comes to you and is not taxed if rent is under your single person allowance as you are not earnings but then bear in mind on the buy to let you will both have 18 % or 28% capital gains tax to pay on any future gain oin that property but not on theh ome you live in. Also check the stamp duty position on having two properties under the new rules - you may be okay as one property is just replacing a current home.

So you put in 50% of the original price, and since then, you paid half the mortgage each for 3 years, and then his income was freed up to pay the mortgage while you contributed by looking after DS, paying childcare fees and other bit and bobs.
That sounds like a pretty equal contribution since Ds was born, so I'd say you should get 50% for your downpayment, and the other 50% should be divided equally between you.
And I'd recommend that from now on you pay towards the mortgage rather than being solely responsible for the childcare fees, which is after all, a joint expense.

Well, yes. Both those scenarios are fair, making it even harder to come to a decision!

Before we had DS, we both earned about the same. Since having him, I have retrained as a teacher, so have the holidays free, but have a commensurately lower salary. Meanwhile DP's career has taken off.

In the future, DB, the idea is there will be no mortgage.

It's risky because you aren't married. If you were married and it all went wrong and you'd given up making serious money then on divorce you might get even 60% or 100% of all the family assets to make up for your lower earnings and possibly even spousal support for say 5 years.

As you aren't married none of that comes into play. Instead you just get half the current house equity - £350k and each keep your own earnings. As you earn less because of your partner perhaps (a) he should pay into a pensino. My mother taught for 11 years and kept my father most of that time whilst he qualified - Physics degree 3 years, then 5 - 7 years of medicine etc etc; she stopped work when I was born and my father made sure he paid into a pension in her name, that she was given assets - when she died she actually had more in shares and savings than my father !! which surprised me (and they were married) and she had her teacher's pension and the additional prviate pension my father set up (and her usual state pension).

It sounds like your other half wants to protect his position. I suspect he will want 50/50 on the new house and the buy to let property and it will be very hard now to keep £140k for yourself of that. May be get to become a super head on £150k a year and out earn him - that will teach him to keep assets to himself and sunny Jim can arrange childcare as needed, not you lumbered with it all.

If he blocks all efforts to resolve it I would see a solicitor and get a fair draft agreement drawn up to reinstate your position. If he refuses to sign it, I would consider it a lesson learned the hard way, take my 50% and call it a day. He's having a laugh.

You've lived together for ages, you have a child. Just get married for goodness sake. Stop all this what's mine what's his - you have a family together for gods sake it all belongs to both of you.
If he refuses - you know he is thinking exactly what he accuses you of thinking. You don't need a wedding. Get down the registry office with £215 and solve this issue in about 2 minutes flat. !

Wow people are really suggesting the op should own 75% of the house juat think if the roles were reversed no on on here would suggest the bloke should have 75% or the vast majority of the equity what would be fair is ring fence the 100k (-40k) extra he has extra contrubted as yours and then split the rest 50/50 or just get married but then it would be hard to ring fence the money in the case of divorce

Why dont you just get married?
I would be very disappointed if the father of my child didnt want to commit to me.

Do be aware that if your dp should become seriously ill or, God forbid, die, you are not his legal next of kin.
If there is no will, his assets will go to his legal NOK.
Anything can happen to anyone at any time. I lost my adult son suddenly last year. He didnt have a will, but no partner and few assets.
I have impressed upon my other adult dc to make wills now.
If your partner is reluctant to sort this out, I would be wanting to know why.

His refusal to discuss reasonably, almost certainly means that he would not be fair in the event of a split. I agree. And his refusal to marry when he is quite happy to buy a house and have a child is also telling.

I would say that the initial money is clearly yours. And any equity is half and half. You mutually agreeing for you to SAH doesn't mean you stopped contributing.

For future reference, don't become a SAHM when you're not married.

(endof, so so sorry to hear about your son. I had my 3 sons when the twins turned 18 make a new will when I made mine earlier this year. I made my own when I turned 18 at university - I was studying law)

Whether people ring fence initial mone when they are not married but in a long relationship and one has given up work is up to them. In some countries prior assets are kept separate even on divorce but not in England on divorce and here unless they can prove an agreement that she would keep £140k the house is held 50/50 so they are entitled to a straight half each. Certainly be very careful how you own any new buy to let you are planning to buy.

My DH and I had a deed of trust before we got married and we owned our house as tenants in common, as opposed to joint tenants. The trust deed stipulated the % amount and % we had each put in and stated that if we were to sell we would each get out the same % value of the house. (E.g. I put in 25% equity so Id get 25% of the sale price out once the mortgage was paid). The rest of the money would be split 50-50 as we were contributing equally to running costs and mortgage.

Op seriously see a solicitor. Protect yourself.

Get a solicitor.

Get married.

Don't listen to your friends and don't take the word of strangers on the internet.

Op's partner doesnt want to get married. What is she supposed to do to make
Him?! And why would she want to force him?