Legal advice - how is equity split on a jointly owned house?
Discussion
Hello All
Sorry for posting in business, but you seem the most sensible people around here....
I could do with a bit of advice (before I speak to my solicitor). i'd like to know what other people's experience has been of similar situations. let me tell you a story...
In June 2003 I bought a house with my now ex. We both signed a declaration of trust saying that she would come out with £7,500 if/when we split it. She contributed 50% to bills and mortgage.
In August 2004 she stopped work (to go to university) and didn't make contributions to bills and mortgage.
We sold the house in October 2006. At this point (due to the declaration) she would take out £7,500, I would have taken out around £45,000.
We bought another house, but this time I did not sign the declaration of trust. This declaration said she would take out £10,000 (but was unsigned). She did not contribute to bills and mortgage, and I spent a further £40,000 on the property (on top of the above deposit). She made no contribution to the costs of moving.
In August 2007 we split up and she moved out. We are now sorting out the settlement. I have offered her £10,000, less what she owes me (I lent her £1,000 for a deposit on a new place) but she says this was a 'gift' and I have to give her the full £10k. She has now said she will take legal advice.
So....Worst case is I have to pay her £10k. I feel I actually owe her £9k. If she stands firm, and the signed declaration is ignored, what would the legal situation be? Since we bought this house, I have spend about £35,000 in mortgage payments, and a further £15,000 or so in household bills, ignoring the extra payments I made in the previous house and the cost to move (about £15k to £20k I guess)
I'd be happy to pay the £9k, but if she tries to argue for £10k, what is the probability that I would come out better off?? Any goodwill has now gone so I'm to receive ruthless advice.
Thanks for your help, advice and experience. Advice to stay single and re-start the lapsed subscription to Razzle probably not too helpful but welcome nontheless....
Sorry for posting in business, but you seem the most sensible people around here....
I could do with a bit of advice (before I speak to my solicitor). i'd like to know what other people's experience has been of similar situations. let me tell you a story...
In June 2003 I bought a house with my now ex. We both signed a declaration of trust saying that she would come out with £7,500 if/when we split it. She contributed 50% to bills and mortgage.
In August 2004 she stopped work (to go to university) and didn't make contributions to bills and mortgage.
We sold the house in October 2006. At this point (due to the declaration) she would take out £7,500, I would have taken out around £45,000.
We bought another house, but this time I did not sign the declaration of trust. This declaration said she would take out £10,000 (but was unsigned). She did not contribute to bills and mortgage, and I spent a further £40,000 on the property (on top of the above deposit). She made no contribution to the costs of moving.
In August 2007 we split up and she moved out. We are now sorting out the settlement. I have offered her £10,000, less what she owes me (I lent her £1,000 for a deposit on a new place) but she says this was a 'gift' and I have to give her the full £10k. She has now said she will take legal advice.
So....Worst case is I have to pay her £10k. I feel I actually owe her £9k. If she stands firm, and the signed declaration is ignored, what would the legal situation be? Since we bought this house, I have spend about £35,000 in mortgage payments, and a further £15,000 or so in household bills, ignoring the extra payments I made in the previous house and the cost to move (about £15k to £20k I guess)
I'd be happy to pay the £9k, but if she tries to argue for £10k, what is the probability that I would come out better off?? Any goodwill has now gone so I'm to receive ruthless advice.
Thanks for your help, advice and experience. Advice to stay single and re-start the lapsed subscription to Razzle probably not too helpful but welcome nontheless....
Pay her £10k before it goes legal or you will end up paying her, her solicitors and yours a whole lot more.
What is not clear from your post is:
- For each property, how much deposit you each put in
- how much profit you jointly made on the first house (and what you did with it, and what deposit you each put in)
- the value of your current property
- whether you were / are married
What is not clear from your post is:
- For each property, how much deposit you each put in
- how much profit you jointly made on the first house (and what you did with it, and what deposit you each put in)
- the value of your current property
- whether you were / are married
Edited by UpTheIron on Sunday 6th April 13:35
Edited by UpTheIron on Sunday 6th April 13:38
rsv gone! said:
UpTheIron said:
Pay her £10k before it goes legal or you will end up paying her, her solicitors and yours a whole lot more.
Edited by UpTheIron on Sunday 6th April 13:35
My worry would be that if the declaration of trust was not signed for the second property, with some clever advice she may rethink her position with regards to her rights over your house and the increase in value of it. Since it was purchased.
If they start talking about that that then you may be seriously out of pocket. I will make a grand look like a p1ss in the sea.
I would speak to her and keep the subject on the £1000. She says it is a gift. Seems a bit unlikely to me, and it might do too for a court. She may be trying it on. Ask her about it and why she thinks it is a gift, say you don't agree, and offer to split the difference as you don't want to go to court. If a cheque for £9500 turns up on her doorstep she will most likely cash it. Cover your behind by writing a covering letter saying it is in full and final settlement of her equity in your house, and send it recorded.
Not married.
On the first house, bought for £250k, sold for £305k. However, the declaration of trust said that she only took £7.5k at this point.
So she put in £7.5k to this house, I put in a deposit of about £45k, and I paid the costs of moving, around £20k. Since then, I have paid about £35k in mortgage payments, £15k in bills, £40k in improvements to the house.
So... since October 06, she lived here for 10 months, paid £7.5k, and I have contributed £155k.
House was bought for about £375k, now worth maybe £425k (so no increase in value if you account for the costs of improvements).
Time isn't a problem, I'm not planning on selling soon. And I have more capacity to pay for legal fees than she does, not that this is a reason to do anything different.
There is no way I will pay her the full £10k, it may only be £1k that I can afford, but its a matter of principle, isn't it?
Edited to add that worst case is I sign the declaration and have to pay £10k and forget the so-called 'gift'.
On the first house, bought for £250k, sold for £305k. However, the declaration of trust said that she only took £7.5k at this point.
So she put in £7.5k to this house, I put in a deposit of about £45k, and I paid the costs of moving, around £20k. Since then, I have paid about £35k in mortgage payments, £15k in bills, £40k in improvements to the house.
So... since October 06, she lived here for 10 months, paid £7.5k, and I have contributed £155k.
House was bought for about £375k, now worth maybe £425k (so no increase in value if you account for the costs of improvements).
Time isn't a problem, I'm not planning on selling soon. And I have more capacity to pay for legal fees than she does, not that this is a reason to do anything different.
There is no way I will pay her the full £10k, it may only be £1k that I can afford, but its a matter of principle, isn't it?
Edited to add that worst case is I sign the declaration and have to pay £10k and forget the so-called 'gift'.
Edited by clarkey on Sunday 6th April 14:20
clarkey said:
One further bit to add - the declaration that I haven't signed says that we "shall share equally the cost for all repairs and maintenance of the Property".
Does this include improvements? And what about mortgage payments?
As far as I can see, if you look at the basic definitions of what could be understood by the terms, no, and no. Does this include improvements? And what about mortgage payments?
I think this issue is over the gift. The problem you have is if the situation is expanded to the living costs and gains, there is no way you could claim for the costs of her living there if it was agreed that you would cover these.
On the other hand, with £10k invested in the house, she could make your life very difficult as she has a legitimate claim to a percentage of the property. If nothing else, remember that her £10k has devalued due to inflation over this time, whilst simultaneously it will have in percentage terms if you compare her investment to yours reduced a lot.
Therefore, you have a real risk that if you fall out you will lose more than a grand.
What were the circumstances of the gift? Was it made while you were both together, if it was for a deposit, what for and why?
It was after we had split up - she couldn't afford the deposit, so was going to ask her mum to lend it to her. Her mum couldn't really afford it, so I did the correct thing and loaned it to her. Nothing written down of course. To me it was always an advance on the money I owed her (which I have never disputed). I don't doubt that she sincerely believes it was a final actual of unbelievable generosity on my part though.
Why would you give your ex £1000 a day before they move into a new place.
Anyway, advice seems to be give the money grabbing cow what she wants and come out of it knowing I hold the moral high ground (on this point, anyway, but that is another matter).
Pity, you work hard for your money, are generous with it, and then people f*ck you. The world is an unfair place sometimes.
Why would you give your ex £1000 a day before they move into a new place.
Anyway, advice seems to be give the money grabbing cow what she wants and come out of it knowing I hold the moral high ground (on this point, anyway, but that is another matter).
Pity, you work hard for your money, are generous with it, and then people f*ck you. The world is an unfair place sometimes.
Edited by clarkey on Sunday 6th April 17:11
clarkey said:
It was after we had split up - she couldn't afford the deposit, so was going to ask her mum to lend it to her. Her mum couldn't really afford it, so I did the correct thing and loaned it to her. Nothing written down of course. To me it was always an advance on the money I owed her (which I have never disputed). I don't doubt that she sincerely believes it was a final actual of unbelievable generosity on my part though.
Why would you give your ex £1000 a day before they move into a new place.
Anyway, advice seems to be give the money grabbing cow what she wants and come out of it knowing I hold the moral high ground (on this point, anyway, but that is another matter).
Pity, you work hard for your money, are generous with it, and then people f*ck you. The world is an unfair place sometimes.
I feel for you, in hindsight life is a sh***er.Why would you give your ex £1000 a day before they move into a new place.
Anyway, advice seems to be give the money grabbing cow what she wants and come out of it knowing I hold the moral high ground (on this point, anyway, but that is another matter).
Pity, you work hard for your money, are generous with it, and then people f*ck you. The world is an unfair place sometimes.
Edited by clarkey on Sunday 6th April 17:11
With regard to the £1000, if she genuinely believed that it was a gift, then in practical sense that it what it is. In court she would say that she thought it was a gift in all honesty. Unfortunately if it was not a gift, and it was an advance or a loan, then in a legal sense you really should have outlined this. The problem is that if it was a loan then you would have to show evidence of a contract, even a verbal one. Your only legal argument is that it was obvious that what you were doing was not a gift. IMHO that would be difficult but not impossible.
My opening gambit would be to say that it was obvious it was not a gift as you were splitting up and therefore splitting your finances. If she argues, tell her you don't want to leave on bad terms and offer to split the difference. That at least saves you £500 which could probably be appropriated better in something to cheer you up like a PS3 or a new TV.
Not wound up by it, I just have my principles and like to think I know right from wrong - therefore I try to collect all money I am due, and pay out all money that I owe. Sensible advice (and thanks to all of you for it) seems to be pay the £10k, then do what I can to recover the £1k, but if I can't, life is too short and learn from the mistake....
£1k is a lot of Razzle subscriptions though.
£1k is a lot of Razzle subscriptions though.
You seem clued up enough to have planned most of this, its just the betrayal is clouding your judgement. Cross fingers you wont let this stand in the way of doing the right thing, as you've posted above.
You can retrieve the £1k by going out again and buying a new toy, but making sure you've paid £1k less than you might have expected to. Even better if its something that would have narked her.
Man maths can be comforting sometimes...
You can retrieve the £1k by going out again and buying a new toy, but making sure you've paid £1k less than you might have expected to. Even better if its something that would have narked her.
Man maths can be comforting sometimes...
I did litigation for a while (before I realised that ALL of the client's were pissed off at the end, whether they won or lost!!)
In my view whenever we got to the end of something nasty that had consumed someone for two years, made them incredibly unhappy, chewed up their time and their money - there was usually a point 18 months before where those involved could have settled sensibly if they had looked at their situation rationally. By the time they'd started litigation they had invested in legal costs etc. and had too much to lose to back down.
The words I hated hearing were "it's not the money it's the principle" - settle this now, pay her £10k and tell her to piss off...if you really want to try once more send her £9.5k in full and final settlement and see what happens.
In my view whenever we got to the end of something nasty that had consumed someone for two years, made them incredibly unhappy, chewed up their time and their money - there was usually a point 18 months before where those involved could have settled sensibly if they had looked at their situation rationally. By the time they'd started litigation they had invested in legal costs etc. and had too much to lose to back down.
The words I hated hearing were "it's not the money it's the principle" - settle this now, pay her £10k and tell her to piss off...if you really want to try once more send her £9.5k in full and final settlement and see what happens.
Edited by Piglet on Sunday 6th April 20:09
Thanks Chaps, you're all right. Man maths wins the day, i reckon I need a new toy....
P.S Just to say (in case some of you have a soft side) I have a new girlfriend now, who is great. And I won't be making the same mistakes again...
P.P.S And she's a nurse....
P.P.P.S Pity she doesn't have a uniform though.
P.S Just to say (in case some of you have a soft side) I have a new girlfriend now, who is great. And I won't be making the same mistakes again...
P.P.S And she's a nurse....
P.P.P.S Pity she doesn't have a uniform though.
My advice with all the usual disclaimers is don't pay her the £10k. I have noticed in past experience with litigiation etc people always advise you to get out early. What you want to achieve is the financially optimum settlement, and you won't do this if you are risk adverse. Throw principle out of the window and think about game theory and your risk.
She owes you £1k you loaned her. She also owes you maintenance and repair costs of the property. I'm sure some of the £40k you spent on "upgrades" was in fact maintenance. Additionally, you seem to have changed the circumstances under which she pays the mortgage/bills - in that in your first house she made a 50% contribution, but the second house there was nil. Why was this? Final thing to remember in your game theory is her legal costs, and of course your own.
Her claim is £10k. I assume she signed the second declaration but you haven't countersigned? From my understand of it, you have got a pretty good capped liability of £10k. I would suggest not offering her a penny because the maintenance costs exceed £10k, and saying that you want your £1k back. You could throw in that you believe she owes you 50% bills and mortgage for the last 10 months too.
Usual disclaimer: this is just my opinion, not necessarily a good idea, seek proper legal advice and I'm not liable for anything that happens as a result of this opinion except death/injury.
She owes you £1k you loaned her. She also owes you maintenance and repair costs of the property. I'm sure some of the £40k you spent on "upgrades" was in fact maintenance. Additionally, you seem to have changed the circumstances under which she pays the mortgage/bills - in that in your first house she made a 50% contribution, but the second house there was nil. Why was this? Final thing to remember in your game theory is her legal costs, and of course your own.
Her claim is £10k. I assume she signed the second declaration but you haven't countersigned? From my understand of it, you have got a pretty good capped liability of £10k. I would suggest not offering her a penny because the maintenance costs exceed £10k, and saying that you want your £1k back. You could throw in that you believe she owes you 50% bills and mortgage for the last 10 months too.
Usual disclaimer: this is just my opinion, not necessarily a good idea, seek proper legal advice and I'm not liable for anything that happens as a result of this opinion except death/injury.
edb49 said:
My advice with all the usual disclaimers is don't pay her the £10k. I have noticed in past experience with litigiation etc people always advise you to get out early. What you want to achieve is the financially optimum settlement, and you won't do this if you are risk adverse. Throw principle out of the window and think about game theory and your risk.
She owes you £1k you loaned her. She also owes you maintenance and repair costs of the property. I'm sure some of the £40k you spent on "upgrades" was in fact maintenance. Additionally, you seem to have changed the circumstances under which she pays the mortgage/bills - in that in your first house she made a 50% contribution, but the second house there was nil. Why was this? Final thing to remember in your game theory is her legal costs, and of course your own.
Her claim is £10k. I assume she signed the second declaration but you haven't countersigned? From my understand of it, you have got a pretty good capped liability of £10k. I would suggest not offering her a penny because the maintenance costs exceed £10k, and saying that you want your £1k back. You could throw in that you believe she owes you 50% bills and mortgage for the last 10 months too.
Usual disclaimer: this is just my opinion, not necessarily a good idea, seek proper legal advice and I'm not liable for anything that happens as a result of this opinion except death/injury.
Interesting point of view. She owes you £1k you loaned her. She also owes you maintenance and repair costs of the property. I'm sure some of the £40k you spent on "upgrades" was in fact maintenance. Additionally, you seem to have changed the circumstances under which she pays the mortgage/bills - in that in your first house she made a 50% contribution, but the second house there was nil. Why was this? Final thing to remember in your game theory is her legal costs, and of course your own.
Her claim is £10k. I assume she signed the second declaration but you haven't countersigned? From my understand of it, you have got a pretty good capped liability of £10k. I would suggest not offering her a penny because the maintenance costs exceed £10k, and saying that you want your £1k back. You could throw in that you believe she owes you 50% bills and mortgage for the last 10 months too.
Usual disclaimer: this is just my opinion, not necessarily a good idea, seek proper legal advice and I'm not liable for anything that happens as a result of this opinion except death/injury.
The only problem I can see for the OP - continuing the game theory perspective is predicting the response. I mean, working out what it will be is not the problem, that would be obvious.
If she is telling the OP that she is 'seeking legal advice' - which to be frank is usually a very weak threat to provoke a response, then if the OP now told her to say goodbye to the whole ten grand I do believe within minutes she would be on the phone to her solicitors! Similarly, also using game theory, her options are made simple in that she has £10,000 to gain so it makes the options simple - she would sue...
...if she could. She has little cash. So it will be difficult to fund the solicitors fees should the OP stick his heels in.
However, using game theory again, lets look at the ex's solicitors case:
At the time the agreement for the ex to start university was it also agreed that she would pay back an amount to make up for the food costs etc running the house? No.
Did the OP ask for this during the periods? No.
Was the agreement that X thousand be kept 'in trust'? Yes.
OK, the agreement may also be that maintenance costs be shared. Did the OP ask for them? Has the OP made an account of the amounts? At best it would be difficult for the OP to outline these costs and it will be nowhere near £10k for the maintenance of the house.
Plus also, yet again, game theory wise, how much is a 'quiet life' worth to the OP. How much is a year's stress and hassle worth compared to a clean break so he can enjoy his life?
So, interesting viewpoint, a bit more ruthless that mine. As far as I can see is that the OP would look to exert financial duress to make her accept a lower figure. Get a solicitor to outline the case for a lower amount and put a cheque in the post. That way, especially if she has financial difficulties, a cheque for £5000 now is better than spending money on a solicitor.
Edited by JustinP1 on Sunday 6th April 22:15
Hi Clarkey,
Just my 2p's worth, been there, done that, common law wife, etc, cost me a lot more than £10k with smaller sums involved, pay the £10k, you wont feel OK about it for 5- 10 years but you really shouldn't be fighting it.
The problem is, exactly the same in my case, a gracious "I'm a good guy" loan after split which thieving xxx sees as icing on cake. Satisfy yourself you actually did the right thing, and will probably do the same thing again, this is all OK, see it as good karma money! For your £1k you get closure and a year of your life back, and I reckon thats a bargain for you and new GF.
They are not all after your money...... err well,. (Wife walks past with new Gucci Handbag!)
I agree with you about debt, if someone tries to screw me in business I will chase them to the ends of the earth but this situation has to be different and you shouldn't apply the same principles.
ps all the best, new GF sounds great but rectify the uniform error sharpish
Just my 2p's worth, been there, done that, common law wife, etc, cost me a lot more than £10k with smaller sums involved, pay the £10k, you wont feel OK about it for 5- 10 years but you really shouldn't be fighting it.
The problem is, exactly the same in my case, a gracious "I'm a good guy" loan after split which thieving xxx sees as icing on cake. Satisfy yourself you actually did the right thing, and will probably do the same thing again, this is all OK, see it as good karma money! For your £1k you get closure and a year of your life back, and I reckon thats a bargain for you and new GF.
They are not all after your money...... err well,. (Wife walks past with new Gucci Handbag!)
I agree with you about debt, if someone tries to screw me in business I will chase them to the ends of the earth but this situation has to be different and you shouldn't apply the same principles.
ps all the best, new GF sounds great but rectify the uniform error sharpish
Edited by justin-banks on Monday 7th April 08:44
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