Deed of trust

[Emmahod]

Hi all
I really need some advice.
long story so please bear with me
15 years ago me and my boyfriend moved into a house his parents own and he was added to the mortgage. So it is him and his 2 parents as tenants in common.
a deed of trust was apparently put in place for 50k, which I believe was the deposit on the house originally.
a few years later we were married and now have a daughter. only us have paid this mortgage for the last 15 years. Due to a bad credit history we were never able to take on the mortgage ourselves.
we decided at the beginning of this year to put the house on the market and the estate agent valued it at 180k we spoke to the in-laws laying out the plan to release the equity (46k mortgage) and clear all our debt and save any remaining towards us potentially buying a new house in the future.
his parents told us they did not want the 50k back but that we had to put it in a savings account and provide them a statement from the savings account in line with this deed of trust.
But months and 20 + viewings later with all giving feedback that the house needs too much work we decided to put it to auction as we are paying rent and the mortgage at the moment.
the guide price given was 110k
we spoke again to the in-laws and said that if we did only get 110k this isn’t going to allow us to clear the debt and put the 50k away but his mum is insistent that there is a legal document signed that says 50k needs to go back.

my question is how do I stand with this. I am heartbroken to think that i have been paying for a mortgage for 15 years and I am looking to walk away with next to nothing.
Any advice would be greatly appreciated thank you

[NCA24]

I know about this very well. Outstanding mortgage gets settled first, then Deed of trust (ie 50k goes back to parents) and then you take away what's left after. The parents haven't benefited but it seems neither have you unfortunately. I'm sorry x

[Retrievemysanity]

Hard to say without viewing the documentation but yes, advice given to people in your PIL situation is usually to have some form of protection against their initial deposit so I think your MIL is right. From what you say, am I right that you’re not even on the title of the property anyway, just your DH?

[Emmahod]

No I’m not named on the mortgage at all.
so even thought they have made no contribution to the mortgage payments over the passed 15 years they will still walk away with the 50k
his mum said for us to put it in an account and provide them with a statement but I can’t get my head around that cause surely if it’s in an account in our name it’s ours?

[WillYouPutYourCoatOn]

@Emmahod

No I’m not named on the mortgage at all.
so even thought they have made no contribution to the mortgage payments over the passed 15 years they will still walk away with the 50k
his mum said for us to put it in an account and provide them with a statement but I can’t get my head around that cause surely if it’s in an account in our name it’s ours?

Are you sure they want it in an account in your name?

You aren't entitled to any of the £50k. Why do you think this is unfair?

[Emmahod]

Yes she definitely said she didn’t want it back and for it to go in an account in our name and us provide her with a statement
she said the money is to be used on a deposit for a house.

I don’t think I am entitled to the 50k but surely as I have paid 15 years worth of mortgage I am entitled to something.
if it sells at 110k at auction we would be lucky to walk away with 8k after legal and auction fees

[NCA24]

You wouldn't even have a house if it wasn't for the parents. Why should they lose out and not get their deposit back? They've benefited nothing from their deposit. If the house is in disrepair and you've not invested in it, I'm sorry but that is your brunt to bear.

[Emmahod]

His parents bought the house years before me and my husband took it on and used to rent it out!
it wasn’t bought to help us out in anyway! they asked if we wanted to move in and adjusted the mortgage accordingly.
We didn’t ask them to buy the house or put a deposit on it

[Thingsthatgo]

What do you think would be fair? That they get less than they put in? Why is it in such a bad state of repair? Have you not been looking after it whilst you lived in it?

[Bumblebeeinatree]

@Emmahod

Yes she definitely said she didn’t want it back and for it to go in an account in our name and us provide her with a statement
she said the money is to be used on a deposit for a house.

I don’t think I am entitled to the 50k but surely as I have paid 15 years worth of mortgage I am entitled to something.
if it sells at 110k at auction we would be lucky to walk away with 8k after legal and auction fees

I assume that is a deposit on a house for you? So she is giving you the money, but doesn't want you to fritter it away she wants it to go into another property. Seems more than reasonable.

[Emmahod]

Yes we have been looking after it and spent a fortune over the years
we always said we didn’t want to remain in that house especially now we have a child as the location isn’t ideal

I am trying to understand where we will stand especially with her saying that they don’t want the 50k they want it in an account in our name to use for a future property purchase

I am not trying to get my hands on anyone’s money I am trying to get the best advice to protect my own family

[Ilikewinter]

Im not really sure of your question - the £50k is to be saved for a deposit on a new property - are you not selling this house and buying a new one? If so then surle the £50k wont need to be put into trust?. If your not buying now where are you planning on living?

[WillYouPutYourCoatOn]

@Emmahod

Yes we have been looking after it and spent a fortune over the years
we always said we didn’t want to remain in that house especially now we have a child as the location isn’t ideal

I am trying to understand where we will stand especially with her saying that they don’t want the 50k they want it in an account in our name to use for a future property purchase

I am not trying to get my hands on anyone’s money I am trying to get the best advice to protect my own family

New property purchase for who?

[Emmahod]

We have moved into rental
the sold purpose of selling the house was to release equity to clear debts

I appreciate the gesture for having the 50k towards a deposit should we buy again in the future however until we clear debts and boost our credit scores we won’t be in a position to take on a mortgage.

paying our debts is my priority

i stupidly assumed that we would be entitled to more as we have been the ones paying the mortgage and upkeep of the house but it seems we have just been doing this to protect their investment

lesson learnt

[Ilikewinter]

Ah ok, did it sell at £110k at the auction?. Did his parents take £60k and then insist the remaining £50k go into trust?. If so I guess you have to look at it as though you've been renting, rather than owing the house. As your DH was on mortgage holder, what does he think?
I assume the rent is less than the mortgage payments and will enable you to pay off your debts quicker.

[StealthMama]

Why have the parents and your dh not done the paperwork to transfer the property wholly to your names? Then whatever you sell it for is legally yours? If they intend you to keep the £50k this should have already happened before you are trying to sell it.

It will also make it easier from a sellers perspective to not have any deed of trust taken into the legal purchase of the property.

[YourSnugHazelTraybake]

With respect op it's not the in-laws fault you've run up debts. They paid the £50k deposit and rinfenced it so it's out of the equation. Why on earth did you move out and start paying rent before it sold! To be honest I can see why your financial situation is so poor, you seem to have made a major financial decision without actually finding out what the options would mean.

[Emmahod]

@YourSnugHazelTraybake
not that it’s your place to comment on my finances but the house has a damp issue so I moved my daughter who has asthma out of it!
not a major financial mistake but the right thing to do to protect my young child!!!

[Emmahod]

@Ilikewinter

Ah ok, did it sell at £110k at the auction?. Did his parents take £60k and then insist the remaining £50k go into trust?. If so I guess you have to look at it as though you've been renting, rather than owing the house. As your DH was on mortgage holder, what does he think?
I assume the rent is less than the mortgage payments and will enable you to pay off your debts quicker.

The rent is a little more than the mortgage.
it’s not due to go to auction till later in the month
this has all come about due to needing their authority on the auction paperwork
we had been lead to believe that they wanted nothing from the sale when initially discussed but now the lower price has been quoted this is when the deed of trust has been mentioned.

[Emmahod]

@StealthMama

Why have the parents and your dh not done the paperwork to transfer the property wholly to your names? Then whatever you sell it for is legally yours? If they intend you to keep the £50k this should have already happened before you are trying to sell it.

It will also make it easier from a sellers perspective to not have any deed of trust taken into the legal purchase of the property.

I was lead to believe that as we did not qualify for the mortgage we could not have the property transferred into our name as the deeds need to match the mortgage.

[WillYouPutYourCoatOn]

@Emmahod

@YourSnugHazelTraybake
not that it’s your place to comment on my finances but the house has a damp issue so I moved my daughter who has asthma out of it!
not a major financial mistake but the right thing to do to protect my young child!!!

So why didn't you fix the damp in the house you expected the equity on to clear your personal debts, and you've been living in for the last 15yrs?

[wellthisislovely]

OP, the PIL are doing the right thing. They put in £50K to enable your DH to buy the house. When it sells they want the £50K to be kept for another deposit.

That is a very sensible thing to do. The fact that you have debts is not their problem and they are right not to want to pay those debts off.

The 50K is their money, they protected it with a Deed of Trust. They want to help you buy a house with it, that is their very sensible prerogative. They are also being exceedingly trusting in allowing you to have it and put it into savings.

You need to pay off your debts asap and then you can look at buying another house with their very generous deposit.

[Retrievemysanity]

Ok, so the DoT means the £50k is protected and goes to your PIL. If they then give it to you outright then you can do whatever you want with it. If it’s in an account in your and your DH’s names then it’s your money and they can’t dictate what you do with it. However it sounds like it would sour relations so probably best not to go against their wishes.