Financial ties after seperation

[anonymous-user]

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.

[anonymous-user]

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?

[anonymous-user]

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.

[anonymous-user]

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

[anonymous-user]

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]

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.

[anonymous-user]

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.

[anonymous-user]

Thanks for that. What is a form A/B? I've had a quick google but struggling to find it.

[anonymous-user]

Thankyou for posting. That explains an awful lot.

I've now got a copy of the deeds. Would the words 'declaration of trust' or similar appear specifically? I'm unable to find any reference to it on the deeds.

Failing that, I need a copy of the declaration of trust which is in the house and I'm not going back there any time soon!

[anonymous-user]

Sarnie said:

sebdangerfield said:

Thankyou for posting. That explains an awful lot.

I've now got a copy of the deeds. Would the words 'declaration of trust' or similar appear specifically? I'm unable to find any reference to it on the deeds.

Failing that, I need a copy of the declaration of trust which is in the house and I'm not going back there any time soon!

Can you not go back to the solicitor that did this for you? They should have office copies at least?

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.

[anonymous-user]

Welshbeef said:

OP

How much £ are you wanting?

It's difficult to put a figure on without getting the property valued as it's a 2 bed converted chapel and nothing similar in the local area so It's very remote so difficult value. The most local 2 bed period conversion albeit with less land recently sold for £300k. We anticipated a value of anything between £250-£300k+

What I'm looking for is my half of what we've added to the property/paid off on the mortgage whilst we've had it.

[anonymous-user]

Welshbeef said:

sebdangerfield said:

It's difficult to put a figure on without getting the property valued as it's a 2 bed converted chapel and nothing similar in the local area so It's very remote so difficult value. The most local 2 bed period conversion albeit with less land recently sold for £300k. We anticipated a value of anything between £250-£300k+

What I'm looking for is my half of what we've added to the property/paid off on the mortgage whilst we've had it.

How much have you actually paid off the mortgage together?
Given she stumped up the big deposit v zero from you how much benefit in and capital gain do you think she deserves from taking that risk- I ask as if it hassle made a loss would you be willing to pay her for the lost deposit? You risked zero in this respect.

I'm not sure, that's why I'm asking for advice. In terms of the mortgage, it's been paid jointly since the outset. The total paid off is probably around 12 months.

Edited by anonymous-user on Thursday 8th December 18:26

[anonymous-user]

Welshbeef said:

sebdangerfield said:

It's difficult to put a figure on without getting the property valued as it's a 2 bed converted chapel and nothing similar in the local area so It's very remote so difficult value. The most local 2 bed period conversion albeit with less land recently sold for £300k. We anticipated a value of anything between £250-£300k+

What I'm looking for is my half of what we've added to the property/paid off on the mortgage whilst we've had it.

So bought for £170k
Possibly worth £250-300k

She paid in £50k deposit plus £25k development £75k

Worst case sell £250k
Less purchase price £(170)k
Less her £(25)k
Less selling fees £?
Total potential gain is £55k

But the property isn't sold isn't on the market - what if it takes a decade to sell?or let's say you want to push for a fast sell but in doing so it means it sells for much less meaning zero gains.

Also who's name is the mortgage in?

As in the OP, the mortgage is in her name. Had it been in joint, it wouldnt be a question of what to do.

[anonymous-user]

Welshbeef said:

1 year you'll have paid hardly anything off of the mortgage

Thankyou, I'm aware of that and done all of my amortisation calculations etc. in terms of overpayments but I was genuinely just asking the question in the OP. I can do the maths, I just wanted to know if anyone is aware of how binding a declaration of trust would be in terms of the original agreement with my then fiancée.

[anonymous-user]

But the question I'm asking is, 'am I entitled to a part of the profit we made on the house as agreed when we purchased it, developed it and paid the mortgage on it?' Would that entitlement be different if the claim was £25k or £250k? Whatever value that is can be agreed later. I just feel there's little to benefit from guessing at figures.

[anonymous-user]

Ah ok, that makes more sense. Thankyou. Apart from the mortgage being interest only; I'd not said that but it's insignificant either way. Thanks again

[anonymous-user]

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.

[anonymous-user]

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.

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.

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.

[anonymous-user]

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.

[anonymous-user]

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.