Breakup and property rights / share

anon amus

I have a question that may be ticky to answer.

I have a mortgage with an ex who no longer lives at the property. At the time of the breakup neither of us was in a position to buy the others share. Since then (a few years), I have been paying the mortgage withuout any assistance from said partner, does this entitled me to a bigger share of the property's equity?

To make things more complicated, the partner paid a larger share of the deposit and an agreement was drawn up to ensure that their share would be reimbursed before any splitting of the reminder of the equity but this agreement does not take any of the subsequent payments by (only) me into account.

At this stage the Capital share from my payments should equal that original deposist payment. Does this entitle me to an equal share or any share in the equity???

Thanks for the advice

Del2005

Talk to a solicitor. Property and money are 2 things that should be dealt with correctly.

Edgware

anon amus wrote: »

I have a question that may be ticky to answer.

I have a mortgage with an ex who no longer lives at the property. At the time of the breakup neither of us was in a position to buy the others share. Since then (a few years), I have been paying the mortgage withuout any assistance from said partner, does this entitled me to a bigger share of the property's equity?

To make things more complicated, the partner paid a larger share of the deposit and an agreement was drawn up to ensure that their share would be reimbursed before any splitting of the reminder of the equity but this agreement does not take any of the subsequent payments by (only) me into account.

At this stage the Capital share from my payments should equal that original deposist payment. Does this entitle me to an equal share or any share in the equity???

Thanks for the advice

I would suggest getting an accountant to go through all the figures, then establish a bottom line figure that you would be happy to settle on. Having done so start some form of mediation to clear up the matter. The less involvement with courts or solicitors the better.
If you can get anywhere near your bottom line take it and walk away. Life is too short

Wabbit Ears

First step is accountant. Know exactly how much you have put into the house, things you have paid for that increase its value etc where you have a paper trail of money spent.

Like any good negotiation go in with your facts and figures clearly understood and understandable. Know your lowest price that lets you walk away with a done deal that you can both walk away from.

judeboy101

Ex wife or ex gf you didn't make that clear.

anon amus

Thanks for the help everyone.

judeboy101 wrote: »

Ex wife or ex gf you didn't make that clear.

We were unmarried.

C3PO

Playing devils advocate here but it could be argued that you have also been living in the house and thus the mortgage payment could equate to rent? That would be the argument that will probably be made!
I know from personal experience of a similar situation that you should avoid legal fees and court cases if at all possible - the costs will be huge!

anon amus

C3PO wrote: »

Playing devils advocate here but it could be argued that you have also been living in the house and thus the mortgage payment could equate to rent? That would be the argument that will probably be made!
I know from personal experience of a similar situation that you should avoid legal fees and court cases if at all possible - the costs will be huge!

I realise that arguement could be made and that would be my main worry. I suppose the flipside would be that the original equity would be worthless if I hadn't paid the mortgage, so there is defintely instrinsic value there. Also I could argue that the interest (the majority of the payments) could equte to rent but the capital payments should count for something.

I think mediation is the only way forward, hopefully solicitors can straighten out the finer points.

The_Conductor

The argument that your ex will make- is that while you have been paying the mortgage- he/she has had equity tied up in the property- and is entitled to have this recognised as part of any agreement between you.

Lets run through a possible example for you-

Property cost 300,000 at the outset

Party A 30,000 deposit
Party B 10,000 deposit

Couple split- a few years later- property is now worth 200,000 and the mortgage has had 40k paid off its capital

A few years hence- she comes back to you looking for a share of the property- as she paid more of the deposit- and you never took her off the mortgage.

First off- both she and you are severally and individually liable for the mortgage- and also have equal rights in the property- save any pre-existing agreements (such as you having agreed to repay her her share of the deposit- before any other factors are taken into account).

Wholly aside from what the mortgage was- what the deposit was- who paid what- and who repaid a larger share of the capital than the other- the bigger question- that you haven't looked at at all is:

What price was the property bought for
What price is it now worth

Aka- is there equity in the property?

If you remember the thread in this forum from about a month ago- where it was pointed out that the CSO graph for property prices starts on the 1st of Jan 2005- aka 100 is on the first of Jan 2005- Feb 2007 hit about 140- and we're now at approx 87 again on the graph.............

It is not a given that there is equity in the property- and before you exert yourself running after an accountant and a solicitor- it would probably be wise to see that you're not chasing a magical unicorn that doesn't exist...........

If there is equity in the property- you have a pre-existing roadmap- she gets her portion of the deposit back (and you yours) and the fairest manner of proceeding thereafter- wholly aside of the fact that you paid the mortgage on your own for a duration- and regardless of what portion of the capital you repaid- you had use of the utility for the duration too. I would argue a straight split of any o/s balance *after* the mortgage is cleared and both of you have your deposit back- is the most equitable manner of proceeding.............

You did get use of the property- when she didn't- if you want to spend more money trying to defend the portion of capital you paid down- the solicitor and accountant will end up with more money than either you or your ex.............

I'd suggest:

Mediation.
Both parties get their deposits back.
Mortgage cleared with the lender.
Any o/s balance split equally between the two parties.
You part as amiably as possible- both of you relieved that you haven't wasted more money- and keep the hell out of each other's lives for ever after.

One way or the other- whether, or not, there is equity in the property- is key here- not what the property originally cost- who paid which portion of the deposit etc etc. The bank get their pound of flesh first. If you're lucky- you both get your deposit back. If you're exceptionally lucky- after costs- you still have a small balance to split between you. I wouldn't be hopeful that you have a large sum over- particularly as you're suggesting that the capital repayments are akin to the portion of the deposit that she paid at the outset- but key to this- is whether or not there is equity in the property- there is no point at all in fighting over a unicorn.

The_Conductor

anon amus wrote: »

I realise that arguement could be made and that would be my main worry. I suppose the flipside would be that the original equity would be worthless if I hadn't paid the mortgage, so there is defintely instrinsic value there. Also I could argue that the interest (the majority of the payments) could equte to rent but the capital payments should count for something.

I think mediation is the only way forward, hopefully solicitors can straighten out the finer points.

The counter argument to this- is you very possibly paid less in mortgage payments- than it would have cost you to rent a commensurate property- wholly aside as to what portion of the mortgage was capital and what was interest...........

You haven't paid a lot of the mortgage back (yet).

If you want to make the argument that you're making- you're going to spend more on solicitors than you'll ever see yourself- and frankly- given the jointly and severally nature of mortgages- you'll likely end up in court- and you'll likely loose...........

I know you paid X amount of the capital back.

At the exact same time- your ex paid a large sum towards renting somewhere else.

She could just as easily pull the argument- her rent should also be taken into the equation- and then where do you go?

Take the moral high road. You have already agreed to give her her portion of the deposit back- do this first- then your portion of the deposit- and then a straight split of whatever is over after the mortgage is cleared- and move on...........

anon amus

What about this example:

House is bought for 100k

Partner deposit €10k
My deposit €5k

My contributions equals a further €10k of capital.

House value is now €110k, mortgage is now €75k

I try to buy my share from him, I would owe the original €10k + half of the €10k I paid off and half the €10k additional profit. Meaning I loose half of the capital I paid.

Would it not be more reasonable to park the €10k I paid off, cover mortgage and partners deposit and then split the profit?

I can see situations were you could end up owing someone the same amount you paid on the capital, paying it twice???

Seems pretty unreasonable, or am I just too close to this?

C3PO

If those values are the real numbers then going to court is really not an option, the costs will be way higher than any possible benefit!
Mediation or just suck it up and move on!

Cuddlesworth

anon amus wrote: »

Seems pretty unreasonable, or am I just too close to this?

Unreasonable. If you both were still living in the property during this period it would make sense.

I think you will find that rents in the area during the same period were far past the capital payments you were making, probably exceeding the mortgage itself.

Xterminator

OP

you are seeing it from your perspective only.
if you paid rent, like your ex partner had to, and paid the mortgage then you would be on solid ground.

Do you not understand that you have actually been saving money by continuing to live here and pay the mortgage? you cannot claim 100% of that outgoing from accrued equity. Its not reasonable.

However if you work out how much of the mortgage was paid off while you lived there alone, IE how much of the outstanding balance was paid down, you could argue that you want that amount taken into consideration. IE when partner left outstanding balance on mortgage was 100k, now it is 98k and you want that 2k before remaining equity is split.

Bear in mind the house value will appreciate further, and faster than the mortgage is paid down most likely and if in 2 years and the asset appreciates by another 10% you will end up paying them more, than if you make a final settlement today.

so a faster settlement is more practical than one that gets you a small increase.