Tenants in common/buying out ex partner

[Simi]

Hi, I'm stuck in an awful situatuon and I hope somebody can give me some good advice - I'm not sure this is the right forum for my problem but here goes..

I purchased a house with  now ex partner in March 2002 for �47,950. My parents contributed �5000 for the deposit and bought me most of my furniture. My ex-partner spent nothing...

The mortgage is in both our names, but he never took financial responsibilty for anything. I have always paid the mortgage and all the bills. He left the home soon after. I have had the tenancy severed so we are now 'tenants in common' - but he is refusing to sign a transfer of equity document. The value of the house is now approx �100,000. he has said that the he wants  50% share of the current value. I earn about �20,000 and most of my salary goes on my mortgage and related bills..

It seems my only option is to buy him out - which would mean remortgaging for an extra �28,000. I don't want to go to court if it means I'm going to have an astronomical legal bill and lose my home anyway.

I'm not really sure what my options are and feel really stupid for being so gullible :-(

Thanks in advance for any responses..

[Loosehead]

Need more info Simi. When you said that the mortgage is in joint names but he hasn't taken financial reponsibility are saying that he has not paid anything towards the mortgage? Even to you so you can pay it? Are you saying he has paid nothing towards the bills at all? If he is joint owner as far as the land registery is concerned then he will be entitled to something but that would be vastly reduced if he has paid nothing so far. There is also the situation that your mortgage lender may object to you being solely responsible for the mortgage because, presumably you used your joint income when taking out the loan. It's worth talking to the lender because they could effectively prevent equity transfer by demanding you settle the loan. if at all possible avoid lawyers, in cases like this the lawyers for both of you will just string you both along until there is nothing left to fight over. In this sort of case if you can arrange some sort of settlement between yourselves it'll usually be a lot chearper for both sides that fighting it out with  lawyers.

[Simi]

Loosehead  -thanks for ur reply.

In answer to your question, in two years he made 2 mortgage payments - that's it. He never paid any household bills or to me for anything. My mortgage lender is OK about me taking sole responsibility for the mortgage - I earn about �20k so it shouldn't be too much of a problem. I also want to avoid lawyers as first of all, I wouldn't be able to afford one, and second, by the end of the probable ensuing legal saga there would probably be nothing left to fight over, as you said. The only thing I'm worried about is that me ex may force a sale just for the sake of it (by asking for a ridiculous amount of money that I can't afford). He moved in with a girfriend in 2003 (believe it or not, I wasn't aware of it, he told me was working away from home). He has nothing to lose, but it would probably give him great pleasure to see me on the streets.. :-( If u need more info let me know

Simi

[Loosehead]

OK, try this: Work out what you think he should have paid for his half of the property whilst you where living together. Include all bills + mortgage payments ie half of everything you have been paying that he has not. Don't forget to take into account his two mortgae payments. Figure out what the currentl evel of equity is, via a local estate agent, probably get 3 quotes and take the average then figure out what is fair to pay him and make hime an offer, amicably indicating that if you end up involving lawyers you'll both get nothing. For example (i'm guessing figures so fill in the real ones yourself)

Value: 100,000

outstanding mortgage: 44000

Total equity: 56000

add 2 mortgage payments �600 = 56600

subtract half of all bills �900 = 55700

subtract half  unpaid mortgage payments  5600 = 50100.

Subtract half of initial deposit �2500 = 47600

so true equity is 47600.

Make a fair offer based on this (say 15000, for these figures), make it sound attractive, ie "you can have x thousand now or nothing if the lawyers fight it out. Be firm and constructive, sound resonable. Remember the figures I used are just guesses, substitute your own.

[zmudge]

You are looking at it wrongly, Simi. Your situation is better expressed as consequent upon a payment of �5000 your ex entered into contract with you (verbal is as good as written) to jointly purchase a property by each of you making equal monthly payments to a mortgage over 25 years. The only determination (ending) clause was by mutual consent. Very early in its life your ex breached the contract by ceasing to make his due payments. You are now about to issue Proceedings against him for the full amount of the arrears to date plus interest plus costs together with a Court Order that he resumes  future payments due under the contract; alternatively you are prepared to consent to the ending of the contract by him signing the Transfer of Equity, LR Forms TR1 and AP 1, Revenue Form SD 60 in consideration for which you will forgive him the Stamp Duty that will become due.

[Simi]

Loosehead, zmudge, thank you both so much for your fantastic responses - I'm eternally grateful :-) Finally, I feel as if I'm being pointed in the right direction.

I've had three valuations done - �92k, �95k and �95k - the average therefore is �94k. Outstanding mortgage is �44k - so without deducting anything that leaves equity at �50k.

I paid a 10% deposit of the initial price - so should I not deduct 10% of the current value when working out true equity (and then half of all bills as you suggested) ?

I'm going to try and agree an offer with him and then get a solicitor to draft it into some sort of legal document. I definately don't want to get lawyers involved - he works for his brother (who pays him cash in hand) and also claims benefits - so he would be entitled to legal aid and I would be lumbered with legal bills!

What happens if he refuses to accept a reasonable and 'fair' offer ?

Zmudge - thanks for giving a different angle to my question  - it sounds great :-) How do I apply your suggestion practically ?.. (sorry if I sound so naiive)

Would I need to ask a solicitor to draft a letter stating that he's in breach of contract - he probably wouldn't respond. In fact, much as I would love to take a 'tough' stand with him - he would probably make my life even more difficult by refusing to co-operate with anything....

If I was to issue court proceedings what would the process be, is there the possibility that I could be even worse off financially. 

Thank u so much for both taking time out to help me understand all this, I don't feel so alone anymore.

Simi

[zmudge]

A "he owes me money" case is fairly easy to start and run, but if you are not used to it you will require assistance which burns up money, although you will receive about 80% back at the end. And, of course, if the person you are chasing has  no money then it is not worth doing. Regarding legals, if you think there is even a small chance of your matter going legal then so as not to adversely affect your future position you should head all offer letters with "Without  Prejudice" and commence with "This letter is written solely for the purpose of facilitating settlement...................". Otherwise you are doing the right thing in striving for a private settlement. There is a circumstance whereby a tenancy in common can become a real pain, so persevere and try to get rid of it quick

[zmudge]

Oh, Answerbank ..... "quickly"   !!!!

[jakes_7]

hey simi let me know how u get on,, im in exact same situation!! sux huh