Selling a share in my home

[ochreloca]

My first post here.
I was newly divorced 10 years ago with a young child. I was made homeless 3 times in 2 years. When my settlement came through it was not enough to buy a property outright, and I couldn't get a mortgage due to the contract nature of my work.
So, I am looking to sell a share in my home to a female single parent who is in a similar position. I live in a lovely area with great schools and facilities, quiet and safe.
Has anyone any advice, perhaps some one who has done this before? I have looked into the legal side and it can be done, but only with cash.
I have always shared my home and have lovely lodgers but am looking for something more.
TIA

@flapjackfairy

Sounds like a legal minefield tbh. I think you need specialist advice from a solicitor experienced in this scenario.

Already done so. And have a mortgage/financial adviser on board as always.

The legalities around making anyone’s interest in the property time-bound are incredibly complex. And from a “moral” basis, if your desire is to give a single mum a leg up, and she was in a worse not better position after the five year period had elapsed, are you going to turf her out or give her an extension - and then how long is a piece of string?

If you have a financial advisor and solicitor looking at this already, I’m not sure what MN can offer you. There are good reasons people don’t generally purchase property with anyone other than a partner, relative or friend, and the detail of doing other than that will need close legal attention.

You are mad. Sorry.

Of all things a woman, especially with a child, could afford to compromise on, housing security is not that.

@SecondRow

What percentage of the house would they be buying?

Say it's 50/50, then you are both mortgage-free and own half the house each - but you have to live together.

What would be the exit plan – can either party force the other to sell in the future? What if you still only have enough for half a house at that point?

Not 50/50, it's about a third of the property value. I would want the person to intend to stay for 5 years, so that there is some benefit for them down to increased property values. A share can be sold.

@MandalaYogaTapestry

You are mad. Sorry.

Of all things a woman, especially with a child, could afford to compromise on, housing security is not that.

Sorry not sorry? Having purchased a share in a house they can't be evicted. What's insecure about that?

What if after 2 years for example they meet someone else and want to move them in/move out and sell back their share?

A share can be sold.

Not particularly easily though… I’m really sorry OP but the more I think that whilst I really appreciate your desire to help others who have been in your position, there are surely better ways to do it. Taking on a mortgage with someone else is an enormous responsibility and there’s a reason it’s normally only done in already tested long term relationships. I worry you’re setting yourself up for problems in the future.

@ComtesseDeSpair

The legalities around making anyone’s interest in the property time-bound are incredibly complex. And from a “moral” basis, if your desire is to give a single mum a leg up, and she was in a worse not better position after the five year period had elapsed, are you going to turf her out or give her an extension - and then how long is a piece of string?

If you have a financial advisor and solicitor looking at this already, I’m not sure what MN can offer you. There are good reasons people don’t generally purchase property with anyone other than a partner, relative or friend, and the detail of doing other than that will need close legal attention.

As already said, I have spoken to a solicitor and financial advisers who I have known for years. You can't 'turf someone out' when they own a share. It's similar to people buying who aren't married. Apart from the suspicion, apparently!

Although I think I understand your intentions, I don't think this is something you'll get off the ground.

Far better all round is to just keep having a lodger surely? You could specify that you'd prefer a single mum.

When I was unmarried and single with kids, this idea would not have appealed

Not something I would ever consider. Why on earth would you want to get financially tied to a stranger? If things don't work out you could be left living a nightmare with someone who won't sell their share/leave. I wouldn't even get into such an arrangement with my best friend, let alone a stranger.

But given you have already had financial and legal advice it's up to you what you do.

You mentioned in a previous post having an initial arrangement for five years. This would imply that your intention would be that after that five years, if things weren’t working out, one or the other of you could terminate the co-ownership. And you’re correct that this is incredibly legally complex, because you couldn’t demand your co-owner to sell their share back to you, even if you no longer wanted to live with them, and it would become the same stressful process as in a separation of any other kind.

Are you just on MN to advertise and see if anyone here wants to buy into your property? If not, surely your solicitor and financial advisor will have this all covered?

Have you actually spoken to your mortgage company and asked them? I have never spoken to a mortgage company who are willing to only mortgage part of a property. What if you fail to pay and they want to repossess but someone else owns part of the property? There is no benefit to the mortgage company in this arrangement.

What about the other questions I posed? What plans will you have if one of you dies or wants to sell their share. I wish you luck but you really should cover yourself legally in case it doesn't work out.

I would want the person to intend to stay for 5 years, so that there is some benefit for them down to increased property values.

What if house prices went down though and they ended up in negative equity. What if they then sold their share to an abusive fuckwit or simply moved one in to what has become their home?

Very noble of you, but a particularly stupid risk to take given you have a child.

Can't you help someone another way, volunteering or providing a room to someone who'd otherwise find it difficult to rent somewhere or employing someone?

You can't 'turf someone out' when they own a share.

And that is a massive risk to both you and your child.

It takes most people years to get to know and decide that they’d like to live with a romantic partner - and yet you’re proposing just six months as a trial period to see if you like a stranger, after which you’ll essentially sign over all independent decision making and autonomy regarding the biggest asset you own and the place you call home. It seems like a strange thing for somebody whose first post detailed how stressful their life was a few years ago when they weren’t in control of where they lived. You could get really lucky and it would be a feminist dream, but the reality is it’s more likely to end up as a bad situation for you both.

I'm not entirely sure what it is that you are proposing. You say you wish to help a single parent but what is it that you are selling? Are you selling a third of your house? So presumably the other person would be on the deeds and able to force a sale? Or are you selling a sort of time limited lease that may not be mortgage-able?

A lot of friendship groups purchased properties together in the 1980s because their was a tax relief incentive to do so. It worked out for some but many found that it got very complicated and I know some people spent £000s in legal fees to extricate themselves.

The issues that some people I know encountered include:

• the recession of 1987 caused huge job losses which meant some of the joint owners were unable to pay - the others had to either cover or default on the mortgage
• huge arguments between the group that bought together but the others could not evict because it was an owner
• what seemed a good idea as young single 20 somethings did not work so well when the other person got into a relationship and a) moved a boyfriend or girlfriend into the home or b) moved out to live with OH and stopped paying the joint mortgage
• in one case insurance was very complicated

Sounds like a terrible idea
What if one of you dies?
What if one of you meets someone and wants to move them in?
What if your lifestyles don’t match?
How will you agree on all house related decisions?
Due to a set of circumstances I own a property abroad with someone I have no relationship with and it’s bloody hard, when this person dies it will be even worse.
You say you have a Solicitor- have they given advice on the practicalities?

Ps the fact that you are working on the assumption that house prices will always continue to increase shows a worrying naivety about the realities and risks with this venture.

So confused about what you are trying to achieve here. Just one of many questions I have though - what happens after 5 years if the part-owner wishes to sell (and actually manages to find someone who wants to buy a share in your house) - how are you going to stop them selling to someone you don't like/approve of? Will you have a right of veto over new owners? If that happens are you forced to buy the share back yourself - otherwise they might never be able to move out?

I wouldn't.....

You could invest in part of a new home for her... 50/50 and not have to live together?

See is an investment for the future.

She can buy you out or sell which sounds like a win win to me

It's similar to people buying who aren't married - it's nothing like the same situation! If you buy with a partner, you presumably know that person and you make the decisions together - and share the risks/benefits. In this case, you are proposing to sell a share to someone whom presumably you barely know and how are you planning to arrange ongoing costs/maintenance - what happens if you decide to lay a patio - are you paying for the whole thing yet your co-owner will benefit from the increase in value when they sell their share or are they expected to contribute in proportion to their share of the equity in the house - if they don't want a patio, how do you resolve it?

If a normal relationship breaks down one party may decide to take on the mortgage themselves or otherwise the property may be sold and both parties walk away with the proeeds - what happens here? Suppose you can't stand each other, your co-owner decides to marry again, your children hate each other, she gets a job offer at the other end of the country - is she going to be able to force you to sell in order to return her investment?

It sounds like an absolute logistical nightmare. What happens if you fall out or they decide to move in a partner and have more children? How will you decide to share the common areas? What happens if they want to build an extension, put in a new kitchen or en suite, put a shed in the garden, repaint the sitting room etc, and you don't agree?

That said, you can get a mortgage to buy a house with friends and split the ownership unevenly with a declaration of trust, so I don't see why it is so difficult to set up nor why they have to pay cash.

www.peabodysales.co.uk/blog/buy-sell/buying-a-home-with-a-friend/

Agree with PP that this is legally possible but practically a complete nightmare. What will you do if they want you to buy them out and you cannot afford to? They will sell their share to someone else or force the sale of the house.

What will you do if they want you to buy them out and you cannot afford to? They will sell their share to someone else or force the sale of the house.

This.

What happens if they die, will her family force you to sell up, to pay her share? What if she meets someone, brings him to live there and you all don't get on? I wouldn't consider it.