Partner disputes mortgage profit split

[olivia12]

Hello, I would like some advice regarding my tenants in common joint house purchase. My partner and I bought a property 6 years ago. He paid 100K deposit, I paid 5K deposit.

All mortgage payments/bills/maintenance are split 50/50.
We agreed to sign a deed of trust that in the event of us selling the house before our mortgage is paid off, we would each get our deposit back, pay the remaining mortgage, and any profits would be split 50/50.

He was happy with this at the time, but for the past two years he occasionally brings it up, saying it’s unfair and he should get more profit in case we split.

I know legally he has agreed and signed the trust, but the fact he keeps bringing it up at every argument, and feels very resentful, it’s starting to affect our relationship. If he had wanted a proportional split, I think our mortgage payments should have reflected this, but I’ve always paid 50/50.

I have been to a solicitor that also agrees with me, but I am not sure that my partner will ever see it that way, even though at first he did!

Any advice? Should this be in the relationship forum?

Thank you

I can see why he is thinking this. He has paid in 95k more than you, but will only get back the same ‘profit’ as you if/when you sell.

What would happen if the house sells for less than you bought it for? He will lose much more of his initial investment than you.

Paying in 50/50 each month doesn’t shut down the 95k gap between your investments in this.

That’s a really weird thing for him to bring up! Is he going somewhere?
I think the arrangement you have is perfectly fair. That would really annoy me the way he brings this up.

What are his arguments for his totally ridiculous logic?

This would’ve only ever entered my mind around the time I was planning to get divorced
That was a number of years before I got divorced
What else is going on in the background?

I agree one of my children is about to enter a similar arrangement but it will be in her favour and we are ring Fencing her deposit proportionately and percentage.
If they split up, he won’t be walking away with a 50% profit

I can see his point as profits would be determined by the amount of equity and yours is made up largely of his deposit. I feel that if you only paid a proportion of the mortgage that wouldn't really be fair either as the mortgage is only the price it is due to his input and would be more (or more likely wouldn't exist) if you only had your original £5k to invest. But him going on about it doesn't bode well for the relationship and isn't very pleasant, to say the least.

But he has purchased a higher percentage than you and quite substantially, so I can see his point. However, the time to discuss it was before you bought, not years later.

It doesn’t really matter how he feels about it now tbh. You have both signed a contract to say that it’s your monthly contributions that dictate what you get out of it, not your initial deposit.

Next time he brings it up I’d suggest selling the house and going your separate ways so that he can reinvest his money in a way that doesn’t make him feel so resentful. Sounds like he’s got one foot out the door anyway if he’s not seeing it as a long term investment for you two as a couple.

In what way is it totally ridiculous? He should have thought it through beforehand and should stop banging on about it or change the agreement, but it's not illogical.

I mean the set up is obviously not fair and in your favour so that's clear.

It is weird that it's only just occurred to him though and why is he concerned about it now? Does he plan to split?

Imo if he is bringing this up it is because he is going to leave you and is resentful you'll end up with the same profit as him.

I'd start planning for a future without him.

When I bought a property with my ex, we worked out the proportion by the actual percentage we would contribute for the whole purchase price, so for example.

He paid a 10% deposit, I paid a 2% deposit, we then paid the mortgage 50% each (so 50% of the remaining 88% = 44%) so he was assigned 54%, I was assigned 46%

This meant both of us would see the growth on our investment of our deposits in proportion - but if you make a loss, the person who invested more loses more, but thems the breaks!

I don’t think you should get 50% of equity left after repaying his deposit of 100k and yours of 5k. I agree it is unfair. I would talk to a financial advisor who will calculate a fairer tenants in common split than what you currently have.

If he was unhappy with the arrangement the time to bring it up was when you were sorting out the legalities.

I would ask him does he see your future as:
A) splitting up and sorting out the finances
B) Getting married and (if you want them) having kids.

Tell him.that if the answer is splitting up you can get on with it now and not waste any more of your time. If the answer is marriage and kids then your finances will become more intertwined and the tenants in common framework won't safeguard even his initial investment as (in a longer marriage/with kids) this will all become assets of the marriage. So does he want to be single with his pot of gold or part of a relationship?

He isn’t necessarily thinking of divorce or splitting by relooking at the fairness of the biggest asset they own. They are tenants in common, not joint tenants, which is usually done when one or more partners have children from a prior relationship that would inherit their share. If this is why they are tenants in common, then he is looking out for his children and their inheritance.

He should have mentioned it at the time but it is unfair to him. He paid £95k more than you. I don’t think you paying half the mortgage payments changes my opinion as the mortgage you pay is lower than it would have been if you have both paid £5k.

the tenants in common framework won't safeguard even his initial investment
Marriage doesn’t override tenants in common with a will stating his share goes to his children. Only if spouses are joint tenants does the surviving spouse inherit the rest of the house.

You are a partnership. Is he forgetting that?

You are paying 50% each from that mortgage point on, so 50% of profit is fair enough.

My kids will be in his position. I do want to encourage them to ring fence their deposit but demanding more is not working together as a partnership, sharing everything from the mortgage point onwards.

You signed a deed of trust, you've paid half ever since, it's a pretty normal way to split things.

Would he want to cover 100:5 ratio of any losses if the value dropped? Doubt it.

He's showing his true colours, and they're not good ones. Think this is a sign he's not a keeper - why would it matter if he weren't pondering separation?

Maybe you need to suggest that he talks to a solicitor like you have. What financial/legal advice did you both seek at the time of buying the property? Why has it changed for him? Why now? What happened 2 years ago for this to be brought up again?

An argument should always be about whatever the issue is. To bring up other things from the past is not a good way to communicate and is considered abusive and point scoring. You are meant to be a team, a partnership working together toward a harmonious life with give and take.

What proportional split would he want if there were no deed of trust?

It is unfair. He was a fool to sign the trust deed- did he have legal advice?

I'd feel a bit uncomfortable about it in your shoes

I can see his point he paid 95% of the deposit but will only get 50% of any profit. Financially he has put significantly more into the property than you and therefore it feels fair that any profit should be split accordingly. However he signed the 50 / 50 profit agreement when you bought so unless you are willing to adjust this the 50 / 50 agreement stands. He could argue that he didn’t receive appropriate advice as frankly agreeing 50/50 profit share based on your relative shares of the deposit is inequitable and wouldn’t happen in any other financial transaction. While you are paying the mortgage 50/50 the fact is at the transactional level he put much more in to the property which you would then benefit from in the event of a split and there is a profit.

You need to decide if your relationship can stand his obvious festering ill feeling about the financials and leave as things are or whether it is appropriate to amend the deed to reflect the respective financial contributions.

I got well and truly shafted having the same sort of agreement . After 15 years and the house value having doubled I did get my big deposit back at the original cash value. But DP got half the increased value of my deposit. It was a LOT of money. My deposit was bigger than your DP’s.

Much fairer to split it by %.

i.e:

Split the value of the property into two sections, the part paid for by deposit and the part paid by mortgage.

Each person owns the % of the property paid for by their deposit
plus
50% of the equity paid for by the mortgage - if the mortgage is paid 50/50.

Then allocate the specific %s in the event of a split / sale.

This is weird IMO. You are in a long term relationship, not a business partnership.

Do you intend to marry/have children? Do you share money at all?

I can see his point, and let’s be clear, the only reason you are now a homeowner is because of his deposit - there’s no way you were buying any property with a 5k deposit.

However, he should have taken legal advice at the time and not signed a contract he didn’t understand the full implications of. What a muppet.