Still own home with ex...

*Dudette*

Hi there,

I bought as house with my ex boyfriend 12 years ago, right in the height of the boom and within a matter of months of buying, the house prices crashed in addition to our relationship!!! We have been renting the house out ever since in the hope that prices would increase so that we could sell it and break even on it but unfortunately that never happened and looks like we won't be able to sell it for at least another year at the very least. The house is about 25 mins from Dublin.

I am currently living abroad however plan on returning to Ireland in the next few months. I would preferably like to live in Dublin close to family and friends however house prices and rental prices won't allow me to do that so I am considering moving back into the house I own with my ex.

I haven't checked with the ex yet, however before I do, any recommendations on how I should approach this with him before I ask?

If I am paying the mortgage, in the event that we do sell it and make money, will I be entitled to more then him?

If anything goes wrong in the house while I am living there, should he still help me with sorting out any issues financially?

Any advice you can give me on this would be really appreciated.

Cheers

Dav010

Who has been paying mortgage for last 12 years? You, him, both, or was rent covering it?

If you are returning to Ireland and looking be in house, would you not just be paying half monthly rent to your ex?

If you can afford it, make your ex an offer to buy him out.

12 years of rent is a sizeable tax liability, while you have been away has tax been paid on your portion of rental income ncome?

m5ex9oqjawdg2i

If you both pay 50 50 then the amount recieved should also be 50 50. Why would you be entitled to more? Is your ex no longer paying the mortgage?

It's technically your house, so i don't see why you couldn't move back in. Might be an issue if you want to evict everybody and there's a financial shortfall.

Kenno90

If there is tenants in the property for the last 12 years, you'll have to give some time to allow them to find another place.

If you move into the house and take over the repayments, when it comes time to sell yore ex will be entitled to 50% of the money because he owns 50% of the house.

If there is issues with the house, he could choose to help but he's not obliged to since he wont be a landlord anymore as the owner is now occupying the property.

C3PO

Surely the OP would pay "rent" at the same amount as the current tenants? That would be fairest in my opinion. That rent would be applied to the mortgage and when the time comes to sell the OP would split any net proceeds/loss equally? Having said that, if I was the OPs ex, I wouldn't agree to her moving back into the house - too many potential issues!

PhoenixParker

I'd start by telling the ex that you'd like to get a full picture of where ye stand with respect to the house - get it valued, find out the mortgage redemption figure, what rent is being charged, how long the tenants have been there, when was the last rent increase, are all taxes up to date, costs to sell.

With that knowledge you'll both have a decent basis for discussion and analysis of scenarios.

If property is 25mins from Dublin and you've 12 years of mortgage repayments made, I would be surprised if you're in negative equity.

Claw Hammer

C3PO wrote: »

Surely the OP would pay "rent" at the same amount as the current tenants? That would be fairest in my opinion. That rent would be applied to the mortgage and when the time comes to sell the OP would split any net proceeds/loss equally? Having said that, if I was the OPs ex, I wouldn't agree to her moving back into the house - too many potential issues!

The ex-has no say on the o/p moving back into the house. She is an owner of the house and is entitled to live in it. Where it will get messy is when the time comes to sell the house as allowance may have to be made for differing contributions to the repayments and maintenance.

Fol20

Claw Hammer wrote: »

The ex-has no say on the o/p moving back into the house. She is an owner of the house and is entitled to live in it. Where it will get messy is when the time comes to sell the house as allowance may have to be made for differing contributions to the repayments and maintenance.

I would have thought the other person as part Owner would also have input on this.

Dr_Kolossus

Regardless of What you can or can't do, what you should do morally, is what c3po suggested.

Current situation is, you have been receiving rent, half goes to him, half goes to you. If you move in you should now take on the responsibility of paying the 'rent'.

E. G. If mortgage is currently 1000 eur and rent is 2k, and after all taxes paid you cleared 400 per month with 200 eur going to each of you.

You should now pay the mortgage and pay him 200 extra. I. E. You pay 1200, 1k mortgage and 200 to your ex. When you sell you split 50/50. No one is unfairly treated.

Yeah you may have a 'right' under law to simply move in, doesn't make it the right thing to do.

Sure your ex could just decide to move in with you again if he was being unfairly treated

Don't understand people advocating such behaviour.

The_Conductor

Dr_Kolossus wrote: »

E. G. If mortgage is currently 1000 eur and rent is 2k, and after all taxes paid you cleared 400 per month with 200 eur going to each of you.

You should now pay the mortgage and pay him 200 extra. I. E. You pay 1200, 1k mortgage and 200 to your ex. When you sell you split 50/50. No one is unfairly treated.

Actually I'd argue that if the rent is 2k per month- both are equally liable to pay the mortgage and any expenses associated with renting the property. The remainder, gross, is subject to equal division between the two of them- not the net after tax amount. So- if the rent is 2k, the OP owes his/her ex 1k per month- if they agree to stay in the property- and the ex still pays half the mortgage etc.

You can't look at two separate parties and apportion something as individual as after tax income equally to them- the only manner of equitably dealing with it is to do so with the gross- and let both parties sort the tax implications separately as they pertain to themselves.

If the OP has been living abroad for a number of years- he/she was liable to a flatrate 20% tax on their gross rental income for the duration. Their ex had entirely different tax obligations (which would of course factor a myriad of other factors into the equation, not leastly their other Irish income and what their marginal rate of tax might be.........

In practice- it doesn't work for one co-owner to move back into a property. It just doesn't work- unless they agree to buy out the other party. Its rife with opportunities for disagreements- and there is nothing worse than arguing about money.

Dr_Kolossus

The_Conductor wrote: »

Actually I'd argue that if the rent is 2k per month- both are equally liable to pay the mortgage and any expenses associated with renting the property. The remainder, gross, is subject to equal division between the two of them- not the net after tax amount. So- if the rent is 2k, the OP owes his/her ex 1k per month- if they agree to stay in the property- and the ex still pays half the mortgage etc.

You can't look at two separate parties and apportion something as individual as after tax income equally to them- the only manner of equitably dealing with it is to do so with the gross- and let both parties sort the tax implications separately as they pertain to themselves.

If the OP has been living abroad for a number of years- he/she was liable to a flatrate 20% tax on their gross rental income for the duration. Their ex had entirely different tax obligations (which would of course factor a myriad of other factors into the equation, not leastly their other Irish income and what their marginal rate of tax might be.........

In practice- it doesn't work for one co-owner to move back into a property. It just doesn't work- unless they agree to buy out the other party. Its rife with opportunities for disagreements- and there is nothing worse than arguing about money.

I get where you are coming from, but my argument is, they are in a situation now that one of them wishes to make a change. If that change ends up disproportionately benefiting the person who wants to make the change it is simply unfair.

Bandana boy

If house is still in negative equity after 12 years , and rent has been covering mortgage plus tax liability it sounds like interest only mortgage payments have been paid

Graham

Some people assume negative equity is the same as a property being worth less than its original purchase price

The_Conductor

Bandana boy wrote: »

If house is still in negative equity after 12 years , and rent has been covering mortgage plus tax liability it sounds like interest only mortgage payments have been paid

Not necessarily.
Lots of places are still massively below their peak property prices- you could have paid back 30-40% of the principle- and your o/s mortgage could still exceed the equity value of the property. Even the areas that have experienced the best recovery in prices- are still 12-15% below their former peak values. Keep in mind the OP said the property is not in Dublin- its within commuting distance- but you're not going to be looking at max recovery in prices territory by a long shot.

riclad

You can check your most recent mortgage statement from the bank,
it will say mortage is say 250, k, interest rate x per cent,
capital owed, in my experience it takes 10-11 years before the capital starts to get paid off .
Capital is the money you borrowed to buy the house.
i know someone who bought a brand new apartment in 2005,
its now worth 85k.
The mortgage is 140k.
40 minutes drive from dublin .Prices have risen at different rates in
different towns , area,s outside dublin .A few miles make a difference in terms of house value rise,s since 2009 in rural area,s .

cruizer101

riclad wrote: »

in my experience it takes 10-11 years before the capital starts to get paid off .

Capital gets paid of from the very first payment, unless you are going interest only.
e.g. 300k mortgage, @4.5% over 30 years repayment amount is 1520 and first payment is 1125 interest, 395 principal, over time interest decreases and principal increase.
@3% that would be 1265 split 750 interest 515 principal.

After 10 years principal is ~240k.
So you are paying more in interest at the beginning but that is still 20% of mortgage paid off after 33% of term so its not that bad.

In relation to OP cleanest solution is buyout the ex if you can.
If you can rent a room out after you move in I have heard some banks will consider this as income in mortgage application.

Bandana boy

riclad wrote: »

it takes 10-11 years before the capital starts to get paid off

Capital starts getting paid of immediately , the ratio of the payment that is capital will start small and raise over time.
if nothing was paid of the capital from the start the loan could never get paid off !

Gael23

Firstly you would need to give the tenants the relevant notice to vacate the property, I dont know exactly how long that is but its several weeks.

Secondly, and perhaps where the biggest issue lies is that your ex partner would effectively have to pay his half of the mortgage out of his pocket due to the loss of rental income. Thats a problem that doesn't have an easy solution short of renting out one of the rooms to cover him.

Bandana boy

you need to sit down with your ex
if you can put together an arrangement that is more beneficial to him than right now I cant see why he would have an issue.

If you have rent of 2000 today after tax this is creating roughly 1200 towards the mortgage.
I assume you work out the shortfall and pay this equally today.

So in a world that lets say your mortgage is 1400 a month .
you have a liability of 1200 a year each after you cleared your tax

You can structure the rent if you are a tenant without the same tax liability so you should be able to agree to pay the mortgage of 1400 as your rent and he saves 1200 a year and still retains his 50% share when eventually sold

if you are currently interest only then agree a rate of rent that works for you that starts to pay something of the principle so he can see a way out at some point.

LionelNashe

OP would have to pay half the value of the rent to the other owner, plus half the cost of the mortgage, so I think it would be simpler and possibly cheaper to just rent an apartment.

Gael23

LionelNashe wrote: »

OP would have to pay half the value of the rent to the other owner, plus half the cost of the mortgage, so I think it would be simpler and possibly cheaper to just rent an apartment.

This is quite possibly the best solution

Bandana boy

LionelNashe wrote: »

OP would have to pay half the value of the rent to the other owner, plus half the cost of the mortgage, so I think it would be simpler and possibly cheaper to just rent an apartment.

this solution though would most likely be several thousand a year cheaper than renting similar on her own .
plus as going this way reduces a potentially very large tax bill there is room to negotiate with her ex on rent part to a solution that is better for both.

riclad

You owe your ex, the amount he paid off the loan, plus 50 per cent of the rent you recieved on the house .
IF he paid half the mortgage every month .

I understand ,
He may not have paid half the mortgage every month.
Who paid the tax on the rental income ,
who paid the house insurance, maintenance expense,s , .
You can deduct expenses you paid from the amount you owe him.
You need to keep records of all the bills on the house, all payments you make , keep all your bank statements .
Even if the rent is less than expense,s and the mortgage you are still
supposed to make a tax return every year declaring all rental income recieved on the house. Evn if you make no profit on the house rental after
expense.s
See www,revenue.ie
Its very important to keep all reciepts and documents re expenses and bills paid bank on the house,
as at some point ,if you sell the house, you,ll have to settle up with with ex .