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Joint mortgage with friend

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  • 04-02-2019 11:19am
    #1
    Chilligurl
    Registered Users Posts: 5 ✭


    If 2 friends bought a house together and one still resides in the property with her partner, what rights does the other person have with regards to selling the property?
    Basically the house is still in negative equity but nearly breaking even. The person living in the house wants to stay there until it starts making a profit. The person who left is now looking to get a mortgage with their own partner and may wish to sell up soon i.e. when the house moves out of negative equity. Can they legally force the person living in the house to move out or sell? Thanks


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    #2
    Rulmeq
    Registered Users Posts: 1,079 ✭✭✭Rulmeq


    What does the original contract you guys drew up say? Can the person staying there get a mortgage to buy out the friend (is there a tracker that could be lost as a result)?


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    #3
    C3PO
    Registered Users Posts: 3,759 ✭✭✭C3PO


    The courts can order the sale but that really should be a last resort - it will be very expensive to go the legal route!


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    #4
    ldy4mxonucwsq6
    Closed Accounts Posts: 1,537 ✭✭✭ldy4mxonucwsq6


    Are both paying the mortgage/equally fund the purchase? Do you have a co-ownership agreement? Are you joint tenants or tenants in common?

    Usually each of the co-owners has an equal right to possession of the entire property. If you can't agree to sell or buy out then only option really is to go to court requesting that they order the sale of the property.


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    #5
    Chilligurl
    Registered Users Posts: 5 ✭Chilligurl


    Rulmeq wrote: »
    What does the original contract you guys drew up say? Can the person staying there get a mortgage to buy out the friend (is there a tracker that could be lost as a result)?

    Yes it's a tracker so I'm assuming that would be lost if the person living there managed to get a mortgage to buy out the friend.


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    #6
    Chilligurl
    Registered Users Posts: 5 ✭Chilligurl


    Sullivan Sweet Birdhouse wrote: »
    Are both paying the mortgage/equally fund the purchase? Do you have a co-ownership agreement? Are you joint tenants or tenants in common?

    Usually each of the co-owners has an equal right to possession of the entire property. If you can't agree to sell or buy out then only option really is to go to court requesting that they order the sale of the property.

    The person living there is paying half the mortgage monthly repayment amount. Their boyfriend who is living there with them is paying the other half (technically "renting a room" off the other owner). So the owner who is not living there is not paying anything towards the mortgage and hasn't been for a few years.

    I'm not sure if they are tenants in common or joint tenants. What would the difference be with regards to rights?

    The problem is the person living there is probably unable to secure a new mortgage with their boyfriend because of his low salary and their debts. They also do not want to move out as they don't want to rent the house to strangers when they would not make much of a profit on the rental income when you take into account taxes and fees etc.

    However the other owner is in a position where they may want to sell the house or take over the tracker mortgage themselves as they feel the property us holding them back from getting their own mortgage.

    I understand they need to meet with their bank to go through their options based on their personal circumstances but I was just wondering what the general options are in this instance.


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    #7
    mrs.doubt.fire
    Registered Users Posts: 103 ✭✭mrs.doubt.fire


    I dont understand why 2 friends would take out a joint mortgage and then one of them not pay their share of the re-payments regardless if they live there or not.


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    #8
    CalamariFritti
    Registered Users Posts: 5,622 ✭✭✭CalamariFritti


    mrs.doubt.fire wrote: »
    I dont understand why 2 friends would take out a joint mortgage and then one of them not pay their share of the re-payments regardless if they live there or not.

    But strictly speaking the other still pays from what I read. They rent it to the others partner and use the rent to pay their share of the mortgage.

    Nice little mess they got themselves Into by the sound of it.


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    #9
    C3PO
    Registered Users Posts: 3,759 ✭✭✭C3PO


    I know "hindsight" and all that but surely you thought about this or a similar possibility when you took out the mortgage in the first place?


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    #10
    PhoenixParker
    Registered Users Posts: 2,677 ✭✭✭PhoenixParker


    Start small, get a valuation and find out what's left on the mortgage.


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    #11
    mrs.doubt.fire
    Registered Users Posts: 103 ✭✭mrs.doubt.fire


    CalamariFritti wrote: »
    But strictly speaking the other still pays from what I read. They rent it to the others partner and use the rent to pay their share of the mortgage.

    Nice little mess they got themselves Into by the sound of it.

    Yep, bit of a mess alright.
    I think the friend that dont live there needs some proper legal advise.

    I remember years ago my brother got a car loan with his girlfriend and they had a joint bank account. About a year into the car loan they split up, he came to me for advice. The best way I could give him sound advice was to first say to him...ok I cant be on either side (his or hers) but the first mistake you BOTH made was to get the car loan and open the join account when your not engaged to be married or already married to each other''. I continued...so what you BOTH do is this..either sell the car or one of you buys out the other's share by going to the bank manager and telling him/her that now only one of you has the car loan, and while you both at the bank TOGETHER, close the joint account and only take your own money out of the joint account and not a penny more!! and if you dont do that, I'll smack your head off!!''. I also explained to him that by closing the joint account and getting his name off the car loan, it PROTECTS him (and her) of their bank credit for the future. He did as I instructed and then I said to him....dont ever do that again, wait until your married to do joint anything!! Now a few years later he's married with kids and yep..financially I'm still bailing the little F***er out LOL


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    #12
    ldy4mxonucwsq6
    Closed Accounts Posts: 1,537 ✭✭✭ldy4mxonucwsq6


    The person still in the property could claim that they and the boyfriend have been paying the mortgage themselves for the past few years.

    Could leave the other owner at a disadvantage.

    If there's no written agreement in place and the person currently living there is not in a position to buy out then I think legal advice is needed.


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    #13
    Chilligurl
    Registered Users Posts: 5 ✭Chilligurl


    C3PO wrote: »
    I know "hindsight" and all that but surely you thought about this or a similar possibility when you took out the mortgage in the first place?

    I don't think they did, no. It was during the boom. Banks were handing out 100% mortgages and they were encouraged by friends and family to buy instead of rent ("dead money") and to get on the property ladder they needed each other. They had planned to only live there for a couple of years the sell at a profit and go there separate ways with enough for a deposit on their own houses. Was it naive on their part? Yes. But that's not going to help them now


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    #14
    Chilligurl
    Registered Users Posts: 5 ✭Chilligurl


    CalamariFritti wrote: »
    But strictly speaking the other still pays from what I read. They rent it to the others partner and use the rent to pay their share of the mortgage.

    Nice little mess they got themselves Into by the sound of it.

    Unfortunately yes. A mess I'm trying to help them get out of. Both now have families of their own and want to do what's best for them. Neither of them want to be screwed over but trying to come up with a solution that suits them both is hard.


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    #15
    ldy4mxonucwsq6
    Closed Accounts Posts: 1,537 ✭✭✭ldy4mxonucwsq6


    Could they move back in to the co-owned property with their partner?


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    #16
    wally79
    Registered Users Posts: 2,936 ✭✭✭wally79


    Chilligurl wrote: »
    Unfortunately yes. A mess I'm trying to help them get out of. Both now have families of their own and want to do what's best for them. Neither of them want to be screwed over but trying to come up with a solution that suits them both is hard.

    Aren’t there only 2 solutions

    Sell up and split profit or loss

    Or

    One buys the other out at agreed value


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    #17
    P2C
    Registered Users Posts: 251 ✭✭P2C


    In a similar situation. You can if the back allows go from a joint to sole or joint to joint morgage and keep the tracker. PTSB wil allow same. In our position we had a contract signed by both parties when we took out the morgage. The house is out of negative equity and one person wants to buy out the other out as both have families. Both parties are agreeable, however the bank won't lend the money to the party who wants to take over sole ownership even though he has the ability to pay. I suspect they want us to sell the property so the tracker is paid off.

    The dude that isn't living in the house and is paying zero probably has a liability to revenue for income tax from the rent of the property


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