Financial ties after seperation

Financial ties after seperation

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anonymous-user

Original Poster:

53 months

Sunday 4th December 2016
quotequote all
Hi, I was hoping to never need to ask this question. I've been engaged to my fiancée for 8 weeks and she's now told me she's is considering seperation. I think she's having a tough time, I've added to it and hoping to make it work however I'm trying to remain logical and define my next moves should the worst happen.

I currently own a flat with a mortgage. I rent this out and moved in with my fiancée where we planned to purchase and develop a chapel together into a residential property. My partner used her equity in the property to buy the chapel and she has the mortgage in her name as I kept my mortgage on my flat. We agreed to sign a declaration of trust as she'd put in around £50k deposit and another £25k in development costs. We agreed that any increase in value would be split and her interests remain solely hers.

We pay the mortgage from a joint account we both pay equally into. I took on the majority of the labour and low skilled building jobs, demolition, stud walls, plasterboarding, decorating etc. How do I stand now in relation to a claim on the increase? In a fit of rage my fiancée has told me I'll get nothing but although I see her money as hers, I can't go away empty handed after 9 months work and an agreement that we'd split profits.

BoRED S2upid

19,641 posts

239 months

Sunday 4th December 2016
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What did you put into the development apart from effort? Cash?

If you insist on something from the development be prepared for her to want something out of your rental.

anonymous-user

Original Poster:

53 months

Sunday 4th December 2016
quotequote all
Huge effort, as above, all stud work, plasterboarding, insulating, demolition etc. Plus some cash, far less than her. As I said, what's hers is hers. We agreed any increase in value would be split. Is that fair or am I out of order?

Lotus Notes

1,197 posts

190 months

BoRED S2upid

19,641 posts

239 months

Sunday 4th December 2016
quotequote all
How much do you think it's gone up then? Are we talking thousands or tens of thousands? And are you prepared for a fight and the legal bill?

anonymous-user

Original Poster:

53 months

Sunday 4th December 2016
quotequote all
Similar to that case but I've also jointly paid the mortgage too.

It's difficult to guess the price increase, purchase was £170k, spend around £30k. I'd expect it to be worth £250k.

davepoth

29,395 posts

198 months

Sunday 4th December 2016
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sebdangerfield said:
Similar to that case but I've also jointly paid the mortgage too.

It's difficult to guess the price increase, purchase was £170k, spend around £30k. I'd expect it to be worth £250k.
So you're in for about £5k? Give it up as a bad job and walk away, counting yourself lucky that you didn't sell your own property to get some equity.

If you get solicitors involved that £5k will evaporate faster than you can blink.

CharlesdeGaulle

26,091 posts

179 months

Sunday 4th December 2016
quotequote all
davepoth said:
Give it up as a bad job and walk away, counting yourself lucky that you didn't sell your own property to get some equity.

It's a horrible situation, and I feel for you. However, I'd agree that you should probably put that one down to experience (and good fortune - it could have been much worse). At least you know early in the engagement that it would never have worked.

anonymous-user

Original Poster:

53 months

Sunday 4th December 2016
quotequote all
Thankyou for the advice gents. It's a tough situation all round and I'll fight to sort things because it's worth it. If that fails then we both have many reasons to walk away. Thanks for the help

soprano

1,586 posts

199 months

Sunday 4th December 2016
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What does the TR1 say from the time you purchased the property?

Sarnie

8,025 posts

208 months

Sunday 4th December 2016
quotequote all
soprano said:
What does the TR1 say from the time you purchased the property?
It will state her as the sole owner..............I assume.........

Lotus Notes

1,197 posts

190 months

Monday 5th December 2016
quotequote all
So, very quick maths:

She invested £50k + £25k to profit from the investment = £75k (86% of investment)
You've invested £5k for materials and let's say 50 days labour at £150 per day (£7.5k) = £12.5k (14% of investment)

Overall profit on investment = 250 - (170 + 25 + 12.5) = £42.5k

Her profit from investment = £36.5k
Your profit from investment = £6k

You might want to take off any rent you should have paid her by living at hers..
She might want to argue loss of interest on £75k..




mjb1

2,552 posts

158 months

Monday 5th December 2016
quotequote all
Lotus Notes said:
So, very quick maths:

She invested £50k + £25k to profit from the investment = £75k (86% of investment)
You've invested £5k for materials and let's say 50 days labour at £150 per day (£7.5k) = £12.5k (14% of investment)

Overall profit on investment = 250 - (170 + 25 + 12.5) = £42.5k

Her profit from investment = £36.5k
Your profit from investment = £6k

You might want to take off any rent you should have paid her by living at hers..
She might want to argue loss of interest on £75k..
£6k profit plus his £12.5k (as you guestimate it) notional investment. And 9 months of full time labour is quite a bit more than your 50 days estimate. At the moment it sounds like she thinks he's entitled to no return at all, nevermind any profit. Hopefully, she just said that in the heat of the argument and will back off a little when things cool down.

Strength of OPs case is going to revolve around the exact content of the deed of trust. It's probably going to be better to come to some amicable agreement than try and fight it out through the legal system, assuming she softens a bit.

anonymous-user

Original Poster:

53 months

Monday 5th December 2016
quotequote all
Sarnie said:
soprano said:
What does the TR1 say from the time you purchased the property?
It will state her as the sole owner..............I assume.........
That's correct, as in the OP, the house was purchased in her name.

anonymous-user

Original Poster:

53 months

Monday 5th December 2016
quotequote all
mjb1 said:
Lotus Notes said:
So, very quick maths:

She invested £50k + £25k to profit from the investment = £75k (86% of investment)
You've invested £5k for materials and let's say 50 days labour at £150 per day (£7.5k) = £12.5k (14% of investment)

Overall profit on investment = 250 - (170 + 25 + 12.5) = £42.5k

Her profit from investment = £36.5k
Your profit from investment = £6k

You might want to take off any rent you should have paid her by living at hers..
She might want to argue loss of interest on £75k..
£6k profit plus his £12.5k (as you guestimate it) notional investment. And 9 months of full time labour is quite a bit more than your 50 days estimate. At the moment it sounds like she thinks he's entitled to no return at all, nevermind any profit. Hopefully, she just said that in the heat of the argument and will back off a little when things cool down.

Strength of OPs case is going to revolve around the exact content of the deed of trust. It's probably going to be better to come to some amicable agreement than try and fight it out through the legal system, assuming she softens a bit.
Thanks again for the advice, I'm a bit shocked I could be paying half the mortgage and then rent on top. I'll have to look into the deed of trust and as suggested, try not to go down the legal route and keep it amicable.

It's looking more likely as although I have tried to make it work, as the dust settles I'm more convinced I want to move on. I think it was fear of the unknown.

mjb1

2,552 posts

158 months

Monday 5th December 2016
quotequote all
sebdangerfield said:
Sarnie said:
soprano said:
What does the TR1 say from the time you purchased the property?
It will state her as the sole owner..............I assume.........
That's correct, as in the OP, the house was purchased in her name.
I'm a bit confused as to who owns what, can you clarify there a 3 properties between you:

Flat with mortgage - solely in your name and rented out,
House with mortgage - solely in her name, you live there together,
Development property - cash buyers, owned jointly with a non equal split as per a deed of trust?

The TR1 form for the development should name you both as tenants in common with an unequal share.
So when you say you've been paying equal amounts towards the mortgage, that's you contributing to her mortgage on her house (where you are living together), a separate thing to the development property?

anonymous-user

Original Poster:

53 months

Monday 5th December 2016
quotequote all
Ah sorry for the confusion. It's as you said but ex sold the house we lived in together and we moved into rented whilst purchasing the development. We lived in rented during the development and now have, since completion, lived in the development.

Welshbeef

49,633 posts

197 months

Tuesday 6th December 2016
quotequote all
How did you buy it on the deeds?

Tenants in common or joint?
If it's tenants in common then legally selling price less mortgage outstanding less selling fees is split by that ratio. If you want to give here something for her extra investment then that's up to you otherwise just the basics.

It's not like you are married so who cares

Sarnie

8,025 posts

208 months

Tuesday 6th December 2016
quotequote all
Welshbeef said:
How did you buy it on the deeds?

Tenants in common or joint?
If it's tenants in common then legally selling price less mortgage outstanding less selling fees is split by that ratio. If you want to give here something for her extra investment then that's up to you otherwise just the basics.

It's not like you are married so who cares
He's not on the deeds at all..........thats the point.

Welshbeef

49,633 posts

197 months

Tuesday 6th December 2016
quotequote all
Sarnie said:
He's not on the deeds at all..........thats the point.
Ahh....
Ask her nicely fingers crossed worst she will say on your bike.