Relationship Breakdown

[iloveglee]

I am coming on here again, as I often do to ask for the advice/experiences of anyone in or who has been in this situation.

One of my grand daughters is in a relationship, that she wants out of.  They are not married, nor in a civil partnership.  What they do have is a shared ownership house, 50% theirs, and 50% housing association to whom they pay rent. 

This split is amicable, for now, but there are issues which makes her not see them being together in the future.  I wish these young people would  discuss these issues properly before setting up home together, but there you are. 

He has nowhere else to go, his parents live abroad.  She can go to her parents, who have plenty of room, and live only around the corner.  They have a dog which they will share responsibility for.  She fully intends to continue to pay her half of the mortgage, and rent, so as to maintain her share of ownership of the house.  Her parents are flexible about her living/contribution whilst she is with them, until they can sort out a more permanent solution.  He wants to move to live with his parents in Spain, but of course this is now not so easy since Brexit.  In the long term it is what he is looking towards. 

They both freely admit they don't perfectly understand the legal ramifications behind this separation, but are loathe to get lawyers involved.  For one thing its pretty expensive, and neither of them are adversarial just now, and would like to keep it that way. 

As the person planning to move out of the house, are there any potential  pitfalls she should be aware of that could jeopordise her access to the house at some later stage.  I guess theoretically she becomes the landlord of her part of the house, and theoretically he should pay rent to her for his occuption of that, but as they are not allowed to sublet I guess that's not anything they might consider.

What slightly complicates the matter is that she paid the deposit and fees when they bought it, so how the division would be made when, if, they come to have to sell it.  He has done work on the house, and has paid bills other than mortgage and rent over the past couple of years, so could argue he's put in his share in a different way.  

It's potentially messy and they'd like it to be as non messy as possible.  They really care for each other as friends but nothing more than that. 

[barry1010]

My advice is what I tell any couple without children who separate.

Clean break. Sell the interest in the house, she moves in with parents and he rents elsewhere. 

[JinnyJoan]

co-ownership sounds what your granddaughter got involved - so did I when I started to buy this house and it was the worse thing I ever did, luckily after some years paying I got rid of the co-ownership.  and now I own all of my house 

[iloveglee]

Ultimately, I think they will totally separate and sell the house, although neither of them want to do that.  Besides, she is not able to have the dog at her parents, and many rentals do not allow pets.  They just lost of one of their cats, and would be heartbroken, on top of all the rest of it to have to rehome the dog.  It's almost more complicated than having kids. 

So for the moment it has to be the way it is, her at her parents, him in the house.  She is just wondering if there is anything she has to do, or not do, to risk losing access to the house if things cease to be civilised.  I am wonder whether citizens advice may be able to help her.

The ownership of the house is indeed co-ownership, or shared ownership.  They both co-own half of the house, the housing association owns the other half and they both have a rental agreement for the rent on that half.  Legally they are tied.

Selling a shared ownership house is not so easy as selling a fully owned house, and is more expensive with fees etc.  This is why they are reluctant to do it just now.  They have a little equity in the house as prices have increased and they have paid some off the mortgage.  Where the house is located is in demand so my guess is the value will only increase.  

Currently he is looking into how it would be possible for him to move to Spain.  If it works out that he could do that, and it is by no means certain, then she would have to look into the possibility of being able to afford to buy him out.  Otherwise it would have to be sold. 

[iloveglee]

Re the above situation.  The split has happened and so far its amicable.  She has moved in with her parents, and he continues to live in the house.  They are both paying mortgage/rent.

Currently neither can afford to buy the othe out, she has put in the deposit of £5000 and £2000 fees.  He cannot raise this amount to pay her, without selling the house, which they don't want to do just now. 

A suggestion has been made that she stop paying her share and saving it until the £7000 has been repaid to her, then recommence paying.  I fear that this might put her into a potential position, should this cease to be amicable, where it might look as though she has walked away, therefore he could claim it is his house.  Am I right about this, or being too fearful.  

[curlyfries81]

Realistically they are going to have to sell the house, or how else will they ever get their money back. 

And who would want co-ownership of a house they don't live in with a person they're never going to be with again?

It sounds like they're making it unnecessarily complicated for themselves.

[THECORBYLOON]

Are they each paying half of the mortgage and rent?

[iloveglee]

They're both paying half of the mortgage and rent. It's complicated but currently he has nowhere else to go. Rental property is scarce and mostly don't allow dogs. Her parents can't home the dog currently. They'd be heartbroken to lose the dog on top of everything else 

[THECORBYLOON]

Why was the possibility of his paying your daughter her share of the rent considered then?

She could remain there if she wanted to, couldn't she,

[iloveglee]

this may have looked easy to deal with but isnt.  the house appears to have increased in value, he wants to stay in the house, pay all of the mortgage and rent, but she wants a clean break.  we have suggested that she continue to pay her half of the mortgage as the house is an investment in time, but she can't afford to do that and live independently.

There is a dog, that lives with him.  They neither of them want to re-home the dog.  Rentals often don't allow animals, and besides his life is now in the village where they live, and he is settled there, for the first time in his life. 

She is talking about just walking away, having herself removed from the mortgage, but no-one seems to be able to get the unfairness of this.  She might have been the one who walked away from the relationship but she shouldn't be punished for that by losing her share of the house.  He would like to buy her out but cannot raise the necessary amount to do that, on top of taking on the whole of the mortgage.  He has the income, but not the capital.  

It's all round a very difficult situation and because she wants the 'clean break', looks like losing everything.  All the money she put in, plus the amount they have paid off the mortgage already, and the benefit of the increase in value of the house.  If anyone out there has any feasible solution to this, I'd like to hear it, so that both of them get the outcome they want.  If this is even possible. 

[DDIL]

Good Morning,

I don't think she can just remove herself from the mortgage.

As far as I see it she has the following options

continue paying the mortgage until he is in a position to buy her out

sell the property, there are people out there that will purchase the own and rent properties split everything and then walk away

They both move out and then rent the property out (seeking permission to do so) until they are in the position to do one of the above.

walk away and risk getting a default against her name

Hope this helps

[iloveglee]

Thanks for the insights.  She had no intention of defaulting on the mortgage, the plan was that he would take over the mortgage by himself and then that would end her interest in the house. 

Problem with that is, there is equity in the house, plus all the things you buy to live comfortably, furniture, carpets, tv's nice garden, etc etc.  Plus the increase in value, and the amount paid off the mortgage over the last couple of years.  If she just has herself removed from the ownership of the house, he has a nice house to live in, and she comes out with nothing.

Neither of them are properly thinking it through, and I know he would like to buy her out.  The more equity develops in the house over time, the harder it will be for him to raise a capital sum to buy her out.  If they were to do it now, which would be both of their choice, he has no capital to pay her share to her, and no way of raising any.  

This is the dilemma they are in. 

[iloveglee]

Renting it out is not an option, the landlord does not allow it.  Plus to do that they may as well sell, he does not want to leave.  She can currently still live in the village where the house is, as her parents live there. 

[Peter Pedant]

Echo barry - -  BUT.... selling the interest in the house may be more complex than she realises and has to  find out herself.

so having done that.... she has to plan, PlanB what to do if one or other party is 'stuck' with the house

sorry about  the break up

[Peter Pedant]

 Plus the increase in value, and the amount paid off the mortgage over the last couple of years.

as soon as one party says, 'I want the mortgage repayments taken into account' there will be trouble. The demander will  find it VERY difficult to accept that in fact it  is an expense. ( like never, and  bears  a grduge for  ever after. Yes I am talking from experience)

[iloveglee]

When i say mortgage repayments what i mean is the capital which reduces the size of the mortgage.  which would be reflected in the equity.

However it gets more complicated.  This house was allowed to be purchased because my grand daughter fitted the criteria to buy it.  i.e. she has links to and already lived in the village, and worked for the emergency services.  He does not fit the criteria then, and doesn't now.  So, they don't know whether he will be allowed to have sole ownership.

They don't want to contact the housing association just yet until they have come to some final consensus between them what's feasible.  They remain friends, and want to keep it that way. 

[rowanwitch]

Sorry it may not be what they want right now but they really need to see a solicitor. This is going to get messy.   Far too many factors involved and they may only have the option of selling back to the original seller and they won't get a good return if that is the case.