Selling so soon?

RoyalMarine

Hi all.

Thanks for all the comments.

We have had a serious discussion today, with a friend who is a solicitor.

We have both agree'd to keep the house in both our names, and pay 50% of the mortgage. I'll pay the bills, and remain living here.
She is going to move out.

We will sell in a few years, and split everything 50-50.
I get a house to live in, which I love.
She moves out.
We both have a semi reasonable investment.

She's not the type of person to go ape **** banana's in 12 months time looking for money. She has a real head on her shoulders when it comes to this stuff. We split for a valid reason, not due to arguments etc, So I think it's all good there.

And we were together for 3 years. Not the longest, but not the shortest either. In the end, we bought it as an investment and a place to live.
Ill still be using it for both, her just for one.

Either way, I think were both happy with the outcome. No expensive solicitors involved for both, no issues with the bank, no issues with repayments etc. We will keep our joint account open with standing orders paid directly into it for the mortgage.

All in all I think it's a good scenario. We were friends for years before, so we trust each other.

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Eric Cartman

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welcome to the issue every man who's ever divorced in this country has faced.

James 007

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Sounds like a threesome required in this case, all jokes aside, if new lady moves in is she then entitled to a share of the house if living there for over 2.5-3 years or is this incorrect.

RoyalMarine

deposit is sorted between myself and parents. once house is sold, deposit is taken out first, profits split.

if new lady enters the equation, then we re-evaluate it then.
could possibly look at buying her out at that stage.

antoinolachtnai

This is not a good outcome for you. You (and your ex) need a solicitor of your own, on record, paid a fee. Any agreement you make without separate solicitors and legal advice isn't really going to be binding, certainly not the agreement you have proposed.

I don't mean to be ageist, but you really need an old hand of a solicitor for this sort of stuff. You want someone who has been doing legal comings and goings with family property for at least 20 years. I have a feeling your advisor is more like your own age.

Solicitor fees will probably be less than two mortgage payments. That is 1/150th of the total amount you will pay back on the mortgage. If you get the best advice and come to a good agreement, it is honestly the best money you will ever spend.

It is very likely you will end up in a dispute if you go down the road you are on. I would say that there is a better than 50-50 chance. If you end up in a dispute over this, it will likely end up with counsel and the High Court because of the value of the asset. It will cost you in the order of €10,000 euros even if you don't go to Court. That is likely to destroy the whole profitability of the investment. You should make sure your solicitor friend's advice is in writing, so that you can recover those fees from his insurance company at that time.

Quite apart from the money side, you face the very real possibility of having your home (which you say you love) sold from under you at any time with very little notice. Your ex will not want to do this to you, but if her circumstances change (for example, if she needs to buy a house of her own, or loses her job) then she will have little choice.

Having trust in your business partner is a great start. I admire you and your ex for having the courage to sit down and discuss this face to face and try to come to an agreement that works for both of you. You still need a written, binding legal agreement. This is probably the biggest business matter either of you have ever dealt with and may be the biggest one you ever deal with.

I would also add that this is not a suitable investment vehicle for either of you.

Tigger99

RoyalMarine wrote: »

deposit is sorted between myself and parents. once house is sold, deposit is taken out first, profits split.

if new lady enters the equation, then we re-evaluate it then.
could possibly look at buying her out at that stage.

You are assuming that a sale would result in profit. What if you make a loss or not enough to give your parents back the money. You are making a lot of assumptions about the future. I think spending money on a solicitor now could end up saving you a lot of heartache down the line.

Water John

Assuming your going with the arrangement ye have come up with, I'd say get some tenants in ASAP. The 12/14K can be used to lower both your payments.
I'm sure both of you will appreciate that. For little ongoing financial input both of you have the possibility of a dividend on a house sale in the future, or you buying out her share.
You have a roof over your head. I would use the time and lower cost to put as much money aside as possible. This will give you a lump sum and thus options.

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Mrs OBumble

RoyalMarine wrote: »

We were friends for years before, so we trust each other.

But yet you split up three months after you bought a house together.

<mod snip>

Go and see a solicitor who has experience in family law

Pawwed Rig

Your ex cannot claim rent a room scheme by the way. She will be taxable on her portion of the rental income at her marginal rate.

newacc2015

RoyalMarine wrote: »

Hi all.

We have both agree'd to keep the house in both our names, and pay 50% of the mortgage. I'll pay the bills, and remain living here.
She is going to move out.

We will sell in a few years, and split everything 50-50.
I get a house to live in, which I love.
She moves out.
We both have a semi reasonable investment.

And what are you going to do if the property market starts declining in 12/18 months? You have assumed house prices can only go up which is clearly not the case

Is she entirely comfortable losing tens of thousands if the house has to be sold if it is in negative equity? Are you comfortable with the fact you might not be able to sell the house if its in massive negative equity?

seamus

antoinolachtnai wrote: »

This is not a good outcome for you. You (and your ex) need a solicitor of your own, on record, paid a fee. Any agreement you make without separate solicitors and legal advice isn't really going to be binding, certainly not the agreement you have proposed.

I don't mean to be ageist, but you really need an old hand of a solicitor for this sort of stuff. You want someone who has been doing legal comings and goings with family property for at least 20 years. I have a feeling your advisor is more like your own age.

Solicitor fees will probably be less than two mortgage payments. That is 1/150th of the total amount you will pay back on the mortgage. If you get the best advice and come to a good agreement, it is honestly the best money you will ever spend.

It is very likely you will end up in a dispute if you go down the road you are on. I would say that there is a better than 50-50 chance. If you end up in a dispute over this, it will likely end up with counsel and the High Court because of the value of the asset. It will cost you in the order of €10,000 euros even if you don't go to Court. That is likely to destroy the whole profitability of the investment. You should make sure your solicitor friend's advice is in writing, so that you can recover those fees from his insurance company at that time.

Quite apart from the money side, you face the very real possibility of having your home (which you say you love) sold from under you at any time with very little notice. Your ex will not want to do this to you, but if her circumstances change (for example, if she needs to buy a house of her own, or loses her job) then she will have little choice.

Having trust in your business partner is a great start. I admire you and your ex for having the courage to sit down and discuss this face to face and try to come to an agreement that works for both of you. You still need a written, binding legal agreement. This is probably the biggest business matter either of you have ever dealt with and may be the biggest one you ever deal with.

I would also add that this is not a suitable investment vehicle for either of you.

All of this OP. I know you think you have a great plan put together, but it's based on a lot of assumptions which you cannot possibly take for granted;

- That your salary will be stable or increasing
- That your ex's salary will be stable or increasing
- That property prices will continue increasing
- That your ex will not change her mind under any circumstances
- That future partners of either you or your ex will not try to take a stake in the property

The amount of people everyone here knows who bought with a partner during the boom, split up and are now stuck tied to someone they haven't gone out with in 10 years, is frightening.

A friend of mine was going out with a guy for 18 years, bought a house, split up 18 months later. He said at the time that he'd just sign the papers, let her have the house with no claim on the money he put in, the break up was all very amicable. She decided to let it lie for a while. He went off travelling/working to find himself or some nonsense and arrived back 9 months later talking about being short of cash and looking for a significant cash sum now to sign the house over.

When it comes to money and friendships, do not assume the rules that held true in the past will hold true when you're both tied to a large asset. The rules are now different.

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asteroids over berlin

love is a dangerous thing, i would cut your losses and sell and try and break even. Whilst your ex may indeed be a nice level headed person, she may fall in love again and the guy may have different ideas/views, this can influence her and she may change!! Particularly in the current property market (which is only going to keep climbing) - Sell now and try and buy asap

spaceHopper

Tell the bank you need to take her name off the morthage, give them evidence you can afford it and rent out two of the rooms as soon as possible. While you don't have much choice neither do they. If they don't agree to it they would have to go to court to forecolse and they would look very stupid in front of the court if you are not in arrears

JuliusCaesar

spaceHopper wrote: »

Tell the bank you need to take her name off the morthage, give them evidence you can afford it and rent out two of the rooms as soon as possible. While you don't have much choice neither do they. If they don't agree to it they would have to go to court to forecolse and they would look very stupid in front of the court if you are not in arrears

Go and talk to a number of different banks, see what they all say - don't accept that what one bank will say will apply for them all. You will need to take out a new mortgage.

While you are doing this, get in a few lodgers up to the limit of 12k per year.

Save like crazy, while paying the full mortgage.

How long would it take you to get up to a viable interest in the house? Can you hold off with your ex for that amount of time? WITHOUT her paying towards the mortgage at all. How large are your mortgage repayments? How much equity do you have in the house (i.e. how much is the house worth minus how much you owe)? How large was the deposit? Can your parents wait to be repaid?

cronos

JuliusCaesar wrote: »

While you are doing this, get in a few lodgers up to the limit of 12k per year.

It's 14k, not 12k

RoyalMarine

We reviewed all feedback from friends, family, you guys and others etc.

Best we go separate ways now rather than later.
Getting a lodger and taking full mortgage myself. Will save like crazy, repay full amount, and prove to the bank I can do this.

Thankfully it's a very large new 4 bed house so it shouldn't be impossible to find 1 or 2 tenants.

Spanish Eyes

RoyalMarine wrote: »

We reviewed all feedback from friends, family, you guys and others etc.

Best we go separate ways now rather than later.
Getting a lodger and taking full mortgage myself. Will save like crazy, repay full amount, and prove to the bank I can do this.

Thankfully it's a very large new 4 bed house so it shouldn't be impossible to find 1 or 2 tenants.

Best of luck.

Remember lodgers are NOT tenants. They do not have any rights, they are licencees. You can kick them out at any time.

AND you have a potential €14 grand a year in rent tax free as long as you are living there too.

The potential pitfalls are frying my brain now. Hope you have covered all angles.

rustynutz

RoyalMarine wrote: »

We reviewed all feedback from friends, family, you guys and others etc.

Best we go separate ways now rather than later.
Getting a lodger and taking full mortgage myself. Will save like crazy, repay full amount, and prove to the bank I can do this.

Thankfully it's a very large new 4 bed house so it shouldn't be impossible to find 1 or 2 tenants.

Good move, just make sure you get your ex partners name off the mortgage immediately, these situations never end well otherwise, too many variables at play.

Good luck

Moonbeam

RoyalMarine wrote: »

I'd considered a parent going on, but they have some property already and not sure if they would get bank approval to take over her commitment.

She's also on the deeds.

We spoke about it, and I trust her not to cause issues. She's happy to remain on it, and even suggested she sign a legal document stating she will hold no claim. But im not sure if that's possible.

I like the idea of renting a room. Didn't know I could rent it and earn up to 14k tax free.
It's a 4 bedroom house. so the options are there I think.

You can't rent the house out but you can rent out a room and earn 14k tax exempt.

You could rent it out and foot the bill 50/50 with her

RoyalMarine

sorry, didn't mean to mix tenant and lodger up.

And I'll be staying in the house full time.

Will be calling the bank in the morning to discuss options.

Passtheremote

100% sell the property asap while your ex is on terms with you and it sounds like you might get out of this mess relatively lightly.

It makes absolutely no sense to tie yourselves together with this house for X years now that your going your separate ways.

Out of curiosity, was she your fiance?

antoinolachtnai

RoyalMarine wrote: »

We reviewed all feedback from friends, family, you guys and others etc.

Best we go separate ways now rather than later.
Getting a lodger and taking full mortgage myself. Will save like crazy, repay full amount, and prove to the bank I can do this.

You need to have a legal agreement in place immediately. Don't wait for the bank to give its approval.

The bank doesn't really care what you prove by the way. They won't take her name off the hook for the mortgage unless you put forward a new name which is a better mark for the bank than your ex, or you pay off a significant proportion (say, half) of the outstanding amount.

It is sad to say but the bank does not care about your private life and your problems. The bank is legally obliged to be primarily concerned with protecting depositors' interests.

But this lack of agreement from the bank should not be a barrier to putting in place a binding legal agreement about who is entitled to what. And it should not be a barrier to you both getting on with your lives.