Tricky q about splitting assets in a non-marital separation

[Mykittensmittens]

I’ll try to be succinct. This isn’t me but I direct relative, DSis and her P

DSis and he bought a house together. Now have no mortgage. She owns 80% and he owns 20% this was all drawn up properly and done correctly.

they are now separating. They’ve done a bit on the house, paid for with relatively equal contributions, odd bits here and there over 5 years. General decoration, new downstairs bathroom etc.

the house has been valued and a sale agreed. As per the agreement he will leave with 20% of the sale and her 80%. She has agreed as a goodwill gesture to cover all the agents and legal costs of selling.

he is now arguing as they roughly equally spent on decorating and some improvements, he should get more than 20%.

does he have any basis for this argument?

People who want things 50 50 need to get married.

So he's arguing that he should get 50/50 of the increased value?

Impossible to know if the increased value is from normal house increases (which should be split 80/20) or from the changes 50/50. I think he has a case of he can prove the above. Unmarried couples do have a claim on property they have contributed materially to, even if they don't own it. If they paid for a kitchen for example.

What were the changes and the cost of the changes? How much has the value of the house gone up and how long have they owned it?

Thank you I completely agree - am trying to be factual but he was down on his luck when they met. Her 80% was already hers through hard work and diligence. He had to mortgage his 20% and did eventually pay it off. The profit he will effectively made has been proportionately elevated due to her larger stake meaning they had a larger house which has gained more profit.

I think she needs to tell him a firm no, and that the goodwill for the legal expenses is generous enough. But he is getting very nasty, abusive and threatening legal action. I don’t believe he has any recourse?

@MooQuackNeigh
roughly-
purchased for 300 6 years ago
now worth 380
they replaced a rotten conservatory roof with a proper roof, patio, downstairs bathroom, very good wooden floors, those sorts of things. Plus decor and carpets. Roughly £40k over those years.

Unless the changes they made were very significant in value e.g. significant renovations in the 10s of thousands then it's unlikely to be even worth it for him. The costs could be very large for what would only be a 30% difference in the increased value.

What are the amounts we are taking about? If the value has gone up by 100k since they bought. He is currently getting 20k verses 50k if his claim is successful for example. Does he have proof that he made an equal contribution?

Thanks @MooQuackNeigh hopefully I’ve now explained above.

So if he paid half the 40k. So 20k he would get 4k back as his 20% but WANTS 10k back.

He's arguing about 6k. Yeah no chance.

He could certainly take it to court but in all
likelihood it would be very expensive.

What did he pay for? new windows? an extension?

And if he is claiming that he should get 50% of the total value increase then that's only 12k difference.

I would tell your dsis to refuse to take on the costs if the sale anymore and it will now be split 50/50 (or at least 20/80). Give him some consequences.

Exactly. He wants it both ways. No to the 50/50, your sister is being generous about the legal fees, l wouldn’t do that in her situation.

@MooQuackNeigh I’ve messaged you precise numbers so I’m making sure I’m very clear!

he’s really bullying her and it’s all because his 30% won’t leave him enough to buy what he wants - he needs more for that.

@MooseBeTimeForSnow they jointly (not to the penny, but roughly jointly) paid for various things - not one massive job.

In that case, she should withdraw her offer to pay the legal costs etc.

see how he likes that !

and he needs to realise that the new bathroom etc. helped to increase the current value of the property.

thus his 20% increased !

@OlderGlaswegianLivingInDevon this is my point but she’s getting desperate to get away from his verbal abuse and is starting to worry she is wrong!

How much was the house when they purchased it and what is its value now?

“Drawn up properly and done correctly” do you mean they signed a deed of trust regarding ownership shares? If so it is binding and he would have no legal recourse

@MooseBeTimeForSnow ive messaged you with very precise figures as worried they are outing

@Karensalright yes, deed of trust. All done and signed

He gets 20% of the sale. The cost of renovations etc are part of the sale, so he’s getting exactly that. He can pay for the sale costs then too if he keeps pushing it 😏

She paid £240+20= £260 76%
He paid £60+20=£80. 24%
Total = £300+40=£340

Split 80/20 would give him £76K, less than he has paid towards the property.

76/24 would give him £91k, returning what he has invested in the property and a profit of £11k (less his share of the selling costs) rather than £76k which is less than he has paid in.

In the 24/76 scenario, your sister would get £289 which is her money back and a profit of £29k (less share of selling costs) rather than £304k and a profit of £44k which includes £4k of her ex partners investment in the property and gives her 100% of the profit.

He should have had the agreement adjusted for significant expenditure or invested in proportion to his original investment.

She will have to weigh up the benefit of taking all of the property with the challenge of continuing to experience his abuse.

What a horrible situation to be in.

@Mykittensmittens he cannot argue for more because he signed a deed of trust which is binding, so he cannot take her to court so she should just tell him that. And to take a running jump!

She’s not wrong, but she’s doing her ex out of money in the fair sense. She will leave this transaction with considerable profit on the transaction, he will leave with less money than he has put in.

She holds all the cards and can play it how she wants, but it depends if she’s looking to be reasonable or not.

@BeavisMcTavish but she isn’t - because she’s paying all the legal fees and selling fees and a £9k goodwill gesture and that isn’t enough for him.

Assuming costs of sale at 5%, there would be 360K for division.

Let’s assume they each take 20k, for their equal share of the renovations. That leaves 320K. An 80/20 split of that would be 256/64. He would receive 84K, which is 24%.

A straight 80/20 split of the 360K would be 288/72.

Seems to me he’s arguing over 12K. Which he would easily burn through in legal fees if he took this to Court.

first, they each get back what they paid for renovations - so he gets 20k and she gets 20k

second, they each get back what they paid to buy it - which was 300k - so he paid 60k and she paid 240k

now he has 80k and she has 260k

then they the remaining profit after costs is 31k - 40k profit - 9k costs

Then this 31k could either be split 80:20 or she could assume a bit more of the costs to reflect that she is getting more of the profit (if there had been no renovation, her absorbing 80% of costs not 50% would be reasonable)

How much are the legal fees? I wouldn't have thought more than £7k.. £5 for her and £2 for him.. what is the £9k goodwill gesture? If she shares the fees of £9k with him, I think ot would guve her £22k instead of £35k.. £13k is a lot of money.. I get it.... amd legally he is not entitled to anymore than a straight 20%.

I had an ex who tried this - exactly the same situation. Think a solicitor was egging him on. I told him it was nonsense and pointed out that he'd had the benefit of sharing the house with me for all that time, rather than living in 20% of it.

He apologised later.