Buying out ex parents share of house?

[Grandadwasthatyou]

Probably like thousands of others have done have woken up this morning thinking I've had enough. No big fall outs, no affairs, simply have become bored with partner and want more out of life.

Not married, no children. I had a declaration of trust drawn up when we first took our mortgage out stating if ever we split up that he would get the first 20% and me the rest.

Am trying to get my ducks in a row. I really don't want to leave this house. How would it work if I bought him out?
To enable his name to be removed from the mortgage would I have to take out a completely new mortgage and borrow the extra to pay him off?

For example the house is worth £300k with a mortgage of £72k outstanding.
So is it right I would need to remortgage for £72k plus an extra £60k to pay him off?
The trouble is I'm now self employed and although perfectly capable of paying the mortgage myself would they do all the checks as I I was a completely new applicant?

I know I will definitely need legal advice and intend to do so but wondered if anybody else has been in the same situation and can offer advice?

Title should read ex partner not parents!

Yes to all the checks it is new lending for the mortgage company.

You’ll need a solicitor to do the transfer of equity as well.

@JKScot4 .. you are absolutely right!i I can't believe I was thinking I would have to take on the full liability of the remaining mortgage! But would he not just have to pay 20% of it?

How long have you been self employed for?

10 years in which I have earned a good salary but unfortunately I can never predict the forthcoming year's profit which I imagine the mortgage companies will not like.

And who should I see first? Solicitor or mortgage adviser?
Will the mortgage adviser have to inform my partner I have gone to see them as both our names are on the mortgage?

So it's not clear to me and depends on the original split in terms of both deposit and mortgage - E.g. If he paid 20 pc of deposit and you paid nothing but agreed you were to pay remaining 80pc of cost via a mortgage, then yes he would be entitled to the full £60k.

@Kazplus2 I had funds from the sale of a previous property which I used as a deposit and then we worked out what would be a fair contribution to the mortgage each as I earned so much more than him. I therefore paid 80% of the monthly mortgage and him 20%.
So declaration of trust was drawn up. Of course it did not take into account a good few months of unemployment when he made no contribution at all which of course the DOT does not take into account at all!
With hindsight the DOT should have been much more watertight.

And how do I find a solicitor who is good at this type of thing? I really don't want to use the solicitor who drew up the DOT as I think he should have put more provisos in.

Most lenders go on last two years profits averaged out. Usually 4 to 4.5 x your income. It's a small mortgage and low LTV. Definitely see a mortgage broker.

Don’t go off the suggestions posters here have made. You need to look at the precise wording of the deed of trust. That is the beginning and end of it. What you may have thought it intended is irrelevant if the deed is clear how the split is to be.

Grandadwasthatyou
As Collaborate has said, the key here are the terms of the Deed of Trust ("DOT"). I would add that a lot would depend upon whether your (soon to be ex) partner 1) agrees to move out of the house 2) agrees that you buy his equity share and 3) does not dispute the terms of the DOT in order to receive a larger settlement.
For example, does the 20% refer to the house value or net proceeds, does it mean you have to pay his legal costs and as referred to above, who is liable to repay the mortgage and to what extent?
I have worked on very similar cases to these (unmarried/no children) where the dispute relates to the construction of the deed of trust and amount of equity each party should be entitled to. If it ends up in dispute, solicitors can make it very complicated and expensive.
Whether you approach a lawyer or mortgage broker/lender first depends upon the above questions and how contentious all this will likely be between you both; the more contentious you think it might be the more I would favour going to a solicitor first. I would look at small/mid-size firm which covers 'property litigation' rather than a bog standard conveyancer.

@Astonlegalbrain ..it is a very short and succinct DOT , which at the time I thought would suffice to enable me to get my fair share back. As I said hindsight is a marvellous thing although I do think the solicitor at the time should have warned me of various caveats. Worded as follows;

The property shall be held by Mr X and Miss Y upon trust to sell it with power to postpone the sale for so long as they think fit and they shall hold the proceeds of the sale less any sum due on the mortgage, legal fees and fees of any estate agent. ( the net sale proceeds) and the net income until such sale and investments from time to time representing the same upon the following trusts:
In the event of a sale of the property the net sale proceeds shall be dealt with as follows;

1. The first 20% shall be paid to Mr X
2. The remaining 80% shall be paid to Mrs Y

And that is all there is to it.

Although we are perfectly friendly at the moment, as with many splits, things could change. He could well refuse to move out or sell but I will have to persuade him that he will lose money if it goes on the market, what with estate agents fees etc.
Also can he contest a DOT? I thought that was the whole point of having one drawn up so that it couldn't be contested.

He can contest it if you promised he would get a greater share if he did something to his detriment. That is hopefully unlikely.

The use of the word "first" when describing Mr X's equity share is a bit odd. How can you have a first percentage?! This would usually be used when dealing with a pound value eg "the first £20k ..."

If you say the solicitors didn't advise/draft the deed properly then there is nothing to stop Mr X saying that as well and try to invalidate the deed (in order to get a 50% share).

But on the whole it's clear what was meant by the deed and I think the realistic dispute would be more about what could be deducted from the 20% (if anything) and of course what the value of the property is.

Thank you for your time and advice @Astonlegalbrain

I definitely think the solicitor should have advised me at the time to put some wording in the DOT along the lines that this percentage split would only be adhered to if both parties continued to pay towards the mortgage throughout the relationship. Partner had a period of unemployment and also a 6 month temporary separation when I was the only one paying into the mortgage.
I imagine I can't try now and say that he needs to have his half for those missing months taken out of his percentage? He will just say well that wasn't written into the DOT!

I think if it turns into a dispute then that could be raised by you in order to gain leverage to reach settlement of a better figure. Certainly don't rule it out at this stage.

See my public profile for my details and disclaimer.

It seems clear enough to me with no room for dispute. No need to consult a litigation solicitor provided you can agree the value of the house.

You will never get credit for any extra you paid towards the mortgage prior to separation.

I agree (and word first is weird but I am pretty sure it just means 20% to him and 80% to you).

If he could also buy you out and he wants to stay though there is then the issue of which can force the other out. Logically yo uwould expect the 80%er could force the 20%er out as that feels more equitable but I am not sure a court would say so.The court might say if you both cannot agree who buys the other out then it must be sold instead.

On can you get a mortgage the mortgage company will want to see the statement part of your tax return result which you can download from the HMRC website which will show your gross profit after expenses and before tax and look at whether that amount is big enough to cover the sum,.;... the sum I am not sure about - if there were no existing mortgage then you would be paying your ex 20% of the £300k value of the house I supppose.

Alos when the transfer from you to him or vice versa takes place as there is a mortgage stampo duty land tax of about £5000 is due (which is not the case when couples put a house into joint names or vice versa where there is no mortgage.

Well it would seem my soon to be Xdp may well have had a charge put on the house a good few years ago by a credit card company. He has shown me documentation saying the charge was then set aside and a follow up letter from the Land Registry confirming this.
However I want to check this up for myself. I know I can go on the Land Registry site and download a document for £3 which will say if there is a charge but I am not sure what to click on to get the right document.
Anyone able to point me in the right direction please?

@Astonlegalbrain are you able to advise please?
How would I make sure my Xdp paid off this charging order ( if it's still there) when he receives the money I pay him to buy him out. Does the solicitor ensure this happens before forwarding him the difference?

you will want the "title register", find our address from postcode search here: eservices.landregistry.gov.uk/eservices/FindAProperty/view/QuickEnquiryInit.do?id=p_search_link
you should find whether it is listed or not under the 'charges register' at the end of the register. you will see your mortgage on two lines and hopefully nothing else.
and yes, the solicitor will ensure this is removed before funds are released just like a normal sale and purchase

Thank you @Astonlegalbrain. Following your link found 2 charges, both looking like credit card companies from 2009. Is there a statue of limitation on charges?
My next task is to try and find out how much these charges are for, not that it is me who will have to pay them.
Although soon to be xp has agreed to let me stay in the house and pay him off he really does not want us to separate and has said he will do nothing to help facilitate it.
So far I have got 3 valuations on the house , got in touch with the mortgage company to see if they will let me borrow more money in order to pay him off and now I will have to try and find out how much he owes on the charges so that I can tell him what his final offer will be.
He says he does not intend to consult a solicitor and actually wouldn't have any funds to be able to do so. He wouldn't even know where the copy of the DOT is. If I said I was going to take off from his lump sum his missed contributions towards the mortgage when we were separated a few years ago would my solicitor say that's not morally right as it wasn't written into the trust and he hasn't got a solicitor to argue his side?

You don’t have to bother finding out how much is owed on the charges. Assuming they were charging orders they only attach to your ex’s 20%.