Financial ties after seperation
Discussion
sebdangerfield said:
Apart from the mortgage being interest only; I'd not said that but it's insignificant either way
Not really.......that means that the balance hasnt reduced and all you've done is service the debt..........no change there.The key is going to be what the DoT says about sharing the profit in any value appreciation.
The next question will be how that profit is realised. You could get a bunch of surveyors round to ascertain current value but even if they all said £300k, what then then? How do you get your money? She may not have the cash? She may not have the means to raise it via a mortgage? You could get a charging order but you wouldn't see anything until the property was sold.........
Sarnie said:
Not really.......that means that the balance hasnt reduced and all you've done is service the debt..........no change there.
The key is going to be what the DoT says about sharing the profit in any value appreciation.
The next question will be how that profit is realised. You could get a bunch of surveyors round to ascertain current value but even if they all said £300k, what then then? How do you get your money? She may not have the cash? She may not have the means to raise it via a mortgage? You could get a charging order but you wouldn't see anything until the property was sold.........
Sorry Sarnie, what I meant was the mortgage isn't interest only. It's repayment. The interest only part is something which appeared in Welshbeef's post. The key is going to be what the DoT says about sharing the profit in any value appreciation.
The next question will be how that profit is realised. You could get a bunch of surveyors round to ascertain current value but even if they all said £300k, what then then? How do you get your money? She may not have the cash? She may not have the means to raise it via a mortgage? You could get a charging order but you wouldn't see anything until the property was sold.........
mjb1 said:
Welshbeef said:
The agreement is verbal.
Paid mortgage... you paid half of one year interest only mortgage a tiny amount - drop that one seriously.
The agreement isn't verbal, it's whatever is specified in the deed of trust. It shouldn't be a case of 'how much does he want', it should be clearly defined by the deed. The only uncertain variable is what the property is actually worth now. Local estate agents should be able to give you a reasonable idea. I suppose the real acid test would be to put it on the market and see what (if any) offers you get. You/her don't have to accept them, but at least you'd know for real what someone else is prepared to pay.Paid mortgage... you paid half of one year interest only mortgage a tiny amount - drop that one seriously.
All this assumes that the deed has been correctly executed and is legally binding. I'd expect it's Form A/B restriction to be pretty obvious if it's in there, so that might be a worry.
sebdangerfield said:
I'm assuming so. Just getting all details together, or at least as many as possible before we sit down and talk it out. I can the request a copy from the ex or go to the solicitor if things aren't amicable.
I think you'd be better getting a copy of the deed without her knowledge, well before you start negotiating with her. She'll know exactly how it defines the share, and it might be good or bad for you, but you want to know either way asap. Probably best to get a copy from the solicitor.sebdangerfield said:
Thankyou for all the advice. I've looked again at the deeds and can't find any mention of an A/B form. I'll I be able to obtain a copy from the solicitors? Obviously they were working on behalf of my ex as they did the conveyancing. They're also a family friend of hers. Her father was out for dinner with the two partners last night.
Really you do need your own council representing you and your interests. But again this starts to cost £ and goes back to my question about what you think you are due is key. Is it worth burning £1k on a solicitor now? Possibly but not if you believe your due £1k or less.
sebdangerfield said:
Thankyou for all the advice. I've looked again at the deeds and can't find any mention of an A/B form. I'll I be able to obtain a copy from the solicitors? Obviously they were working on behalf of my ex as they did the conveyancing. They're also a family friend of hers. Her father was out for dinner with the two partners last night.
Are you sure you did actually have a deed of trust drawn up and executed? Or did you just discuss the idea and then never got around to it? I'd have thought you'd remember signing such a document, and at least reading it, if not having significant input into it's content.The deed could say anything from you own 50% each of the property (on the basis that the value of your labour matches her cash deposit), through to you own none, but pay half of the interest only mortgage for the benefit of living there. So it's critical you find out what it says before you start and arguments over the property. It might say you're be entitled to nothing, or it might work out £50k+. I'm just very surprised that you don't seem to have any idea what is in this deed?
Her conveyancer should have suggested you took your own legal advice regarding the deed of trust, but it's possible they just did it all for you jointly, but you still must have signed something for the deed to exist. You should be able to request a copy of the deed from her solicitor (don't see how they can refuse you a copy of a document that you are named on, data protection etc). But since they're friends of your ex, it's pretty likely they will let her know what you're up to. Might be better to go back to the house when she's out and view her copy of it.
Not being funny, but how long were you together before you took on this project? It almost sounds as if she had some cash, wanted to do some property development, and used you as cheap/free labour. Now the work is done, she's lost interest in you.
Welshbeef said:
Really you do need your own council representing you and your interests. But again this starts to cost £ and goes back to my question about what you think you are due is key.
Is it worth burning £1k on a solicitor now? Possibly but not if you believe your due £1k or less.
How could he possibly believe that he's due less than 1k from it?Is it worth burning £1k on a solicitor now? Possibly but not if you believe your due £1k or less.
It looks on the face of it like there's about 50k of 'profit' in there to be split - if the house is now worth £250k and the costs are £170k purchase + £30k materials. He should get back his £5k plus £25k (half of the profit). The other consideration is his labour - he says he's put in 9 months of work into it (sounds about right for converting a chapel into a house). At a day rate of £100, that's 20k of labour there.
OP says the only thing similar sold recently for £300k and his has more land, so could easily be worth more. Lets take best case of £320k value. Take off her 50k deposit, 25k development costs, his 5k materials and 20k of labour. That leaves a profit of £100k (ignoring selling fees). So he should get back 25k (labour & materials ) plus £50k profit.
At the very least he's talking about 25k return here, maybe as much as 75k (optimistic).
OP - I haven't read all of the above but in summary:
You need to check the TR1 to see who is the legal owner(s) of the property. I think you have done this and the property is in your partners name.
You say that there is a declaration of trust. What makes you say this? A declaration of trust would be used in this instance to determine that your partner holds the property on trust for the two of you in either equal or unequal shares. To put it another way, it would define your beneficial interest. An express declaration of trust must be in writing. You cannot have an oral express declaration of trust.
If you do not have anything in writing you will need to check with the conveyancing solicitor to see whether there is such declaration.
If there is nothing in writing you could either try to assert that there is a common intention constructive trust, or bring a claim in proprietary estoppel. If you have to go this route, you have an uphill struggle. The presumption is that the equitable ownership follows the legal ownership of the property. That presumption is rebuttable but it is you that must rebut it.
You will have an evidential difficulty because it was bought as a development property while you were together and the obvious question is, if it was commonly intended that you would have an interest in the property, why was it not recorded in an express declaration of trust?
The other issue you have is the short duration of ownership. Common intention constructive trusts are ambulatory in nature. I.e. They can change over time. You can imagine one party owning a property and then meeting a new partner who heavily invests in that property over years. That may demonstrate a common intention that party B would gain a beneficial interest in the property. The evidential issue you have is that you were together when the property was purchased, it was purchased to develop and you separate soon after. It is far less likely in those circumstances that the common intention is different or has changed since the property was purchased.
The potential benefit is relevant here because you are going to sink a good portion of funds into legal costs which, if your potential benefit is 5k, for example, would not be worth pursuing.
You need to check the TR1 to see who is the legal owner(s) of the property. I think you have done this and the property is in your partners name.
You say that there is a declaration of trust. What makes you say this? A declaration of trust would be used in this instance to determine that your partner holds the property on trust for the two of you in either equal or unequal shares. To put it another way, it would define your beneficial interest. An express declaration of trust must be in writing. You cannot have an oral express declaration of trust.
If you do not have anything in writing you will need to check with the conveyancing solicitor to see whether there is such declaration.
If there is nothing in writing you could either try to assert that there is a common intention constructive trust, or bring a claim in proprietary estoppel. If you have to go this route, you have an uphill struggle. The presumption is that the equitable ownership follows the legal ownership of the property. That presumption is rebuttable but it is you that must rebut it.
You will have an evidential difficulty because it was bought as a development property while you were together and the obvious question is, if it was commonly intended that you would have an interest in the property, why was it not recorded in an express declaration of trust?
The other issue you have is the short duration of ownership. Common intention constructive trusts are ambulatory in nature. I.e. They can change over time. You can imagine one party owning a property and then meeting a new partner who heavily invests in that property over years. That may demonstrate a common intention that party B would gain a beneficial interest in the property. The evidential issue you have is that you were together when the property was purchased, it was purchased to develop and you separate soon after. It is far less likely in those circumstances that the common intention is different or has changed since the property was purchased.
The potential benefit is relevant here because you are going to sink a good portion of funds into legal costs which, if your potential benefit is 5k, for example, would not be worth pursuing.
Thank you so much for all of the replies, I appreciate the effort people have made.
Firstly, although it's been hard with such high emotion we've ended up on talking terms and are going for a meal tomorrow to just see how we get on. The main thing for me is to fix this.
I've been really struggling with what has gone on and tried to focus on a few things to keep me sane. My finances have been one of those things.
To clarify, I'm definitely not on the TR1. We discussed taking a joint mortgage and joint ownership but decided due to my other mortgage and property I'd not make the affordability tests and so went this way.
I can find no mention on the TR1 about the declaration of trust. I remember signing a legal document on the day we went to the solicitors for my partner to sign and exchange contracts. The document was brief and clearly defined my partner's deposit and development money.
I'm going to see what tomorrow brings and request a copy from the conveyancer.
Firstly, although it's been hard with such high emotion we've ended up on talking terms and are going for a meal tomorrow to just see how we get on. The main thing for me is to fix this.
I've been really struggling with what has gone on and tried to focus on a few things to keep me sane. My finances have been one of those things.
To clarify, I'm definitely not on the TR1. We discussed taking a joint mortgage and joint ownership but decided due to my other mortgage and property I'd not make the affordability tests and so went this way.
I can find no mention on the TR1 about the declaration of trust. I remember signing a legal document on the day we went to the solicitors for my partner to sign and exchange contracts. The document was brief and clearly defined my partner's deposit and development money.
I'm going to see what tomorrow brings and request a copy from the conveyancer.
There is a chance, we're both talking and plan to discuss things further. It's still raw and with a lot of emotion at the moment but if it were to be saved then we've both discussed mediation. We both need to be at that point though and currently we aren't as it's only been almost two weeks.
sebdangerfield said:
There is a chance, we're both talking and plan to discuss things further. It's still raw and with a lot of emotion at the moment but if it were to be saved then we've both discussed mediation. We both need to be at that point though and currently we aren't as it's only been almost two weeks.
Given this is an outside chance put all those other plans on hold as once you go down that route it will be game over. sebdangerfield said:
I can find no mention on the TR1 about the declaration of trust. I remember signing a legal document on the day we went to the solicitors for my partner to sign and exchange contracts. The document was brief and clearly defined my partner's deposit and development money.
Check box 10 on the TR1 which states "Declaration of trust." - though note that this may well have been left blank because it strictly applies where there is more than one registered owner, so being blank is not definitive.The registered title (part B, the Proprietorship Register) is where you'd find the Form A restriction mentioned earlier in the thread; have a look at Appendix B (section 7) of this Land Registry practice guide: https://www.gov.uk/government/publications/notices... - however, it wouldn't surprise me if this is not on the title because it's a real pain where there's only one person registered as proprietor.
The other brief document you refer to sounds exactly what you're looking for. Ask for a copy of that. This will be what determines your interest as beneficiary of the trust. The title points above just deal with whether she can sell the property without your consent; your entitlement to the proceeds is fixed by the declaration of trust.
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