Mortgage query

[Countdown]

maccboy said:

Countdown said:

Yep - same here.

OP - from what I’ve read there is no formal agreement between you and your daughter. If that’s the case then (like it or not) it was a gift. If she chooses to repay you then all well and good but, as things stand, you have as many rights over the property as her boyfriend.

Interesting. I don't think it'll cause any issues and my daughter is very keen to pay me back!

Fair enough in that case, and in relation to your original query, the remortgage issue and "her boyfreind paying you back" is irrelevant. She's paying you back (as a good, responsible daughter should). However just be aware that there is no OBLIGATION for her to pay you back, or for her boyfriend to buy you out. As far as she (and the bank) are concerned the house is hers to do with as she wants. She could sell it tomorrow and disappear with the equity. She could get married to her BF and then he'd be entitled to a share of the property. They could get a joint mortgage to pay off the original mortgage (or she could just add him to the mortgage) but regardless of all these options you have no rights over the property or over the money you gifted.

[pork911]

AdamV12V said:

pork911 said:

Sorry I'm still struggling.


Ignoring tax and ignoring bf and just looking at transferring op in and what the bank will be agreeing to -

Is daughter selling or gifting a £175k chunk to op? yet op nonetheless is added to the mortgage to secure the separate mortgaged chunk? Which is secured against the whole house?

Currently the legal position is the daughter owns it all, so yes it was a gift from the OP to the daughter - legally! Morally the daughter may agree that she owes the OP £175k back, but that is down to her goodwill, and yes if she moves back to a legal position of returning it to the OP, then yes it would be a gift back.

If the op moves to a tenants in common situation, whereby a deed attached to the property and lodged with the land registry states that he owns the first £175k of equity and the daughter the rest (as an example), then this would put his name on the title as a co-owner (albeit as tenants in common, rather than the normal situation of joint tenants). This would mean that the mortgage must also be moved into his shared name, as the people named on the mortgage loan MUST be the same as the names of those who own the property at the land registry.

So for op to now protect his ('moral')interest in the £175k he gave away he needs to receive a gift if that £175k worth of share back and be on the hook for £80k mortgage secured against the whole house, of which his and daughters shares are getting diluted by bf being in the big bed without putting a penny or ring down (sorry for bluntness op). All very messy.

[AdamV12V]

pork911 said:

So for op to now protect his ('moral')interest in the £175k he gave away he needs to receive a gift if that £175k worth of share back and be on the hook for £80k mortgage secured against the whole house, of which his and daughters shares are getting diluted by bf being in the big bed without putting a penny or ring down (sorry for bluntness op). All very messy.

Correct, but the property could be sold to clear the mortgage, leaving just the accrued equity, to be split out in accordance with the deed of trust - the OP getting his £175k back first (or whatever they choose to agree to write in the deed in terms of equity split).

As somebody put earlier on, mixing family and finance is always a potentially dangerous mix. Its fine whilst its fine, but if things go wrong, then.....

[pork911]

OP I'm not digging you out, putting aside how their relationship survived this arrangement or how you ended up supporting it to the tune if £175k, how did it happen without your interest being secured at the time?

[maccboy]

pork911 said:

OP I'm not digging you out, putting aside how their relationship survived this arrangement or how you ended up supporting it to the tune if £175k, how did it happen without your interest being secured at the time?

It is sort of secured with the signed form from the boyfriend. I think the rest of it is down to love of my daughter, and family responsibilities. She was desperate to have her own place and I did my bit to help her.

[Adam.]

Assume the BF letter stated he had no interest in the property, including no equitable interest ?

[pork911]

Well, none of them did at that point.

[maccboy]

Adam. said:

Assume the BF letter stated he had no interest in the property, including no equitable interest ?

Yes, but I can't remember the exact wording.

[OutInTheShed]

pork911 said:

maccboy said:

pork911 said:

seems already messy. appears OP has no interest in the property but the bf may well have already.

I have an interest of £175k and he has an interest of £0.

There must be something missing from your explanation then.


At the moment it looks like you gave your daughter £175k as a gift. Her then using it to buy a house gives you no interest in the house since it was her money at that point not yours.

Boyfriend may well already have an interest by cohabiting.

So what's missing from your explanation?

Did the OP pay stamp duty at the rate for buying a second property?

Classically, what happens next is the young couple get married, then divorced after a couple of years and the partner is away with half the deposit.
It's happened to at least two people I know.

[AdamV12V]

maccboy said:

Yes, but I can't remember the exact wording.

A signed piece of paper isnt going to have much if any impact legally if the bf chooses to challenge his equity in the property. Im sure everything is fine now, but many relationships do fail, sometimes after many happy years, and at that point all bets are off, goodwill means nothing then. You never know what the future will bring, so it really would be in your best interest to get a deeed of trust drawn up and the equity declared with land registry and mortgage lender as Ive suggested above.

Fwiw - i spent the last 20yrs or so of my career as a board director in the legal residential property sector, so i do know what im talking about…

[Adam.]

You are obv an expert Adam and with an excellent moniker

Are you saying a legal letter stating BF has no interest and signed by him, caries no legal standing?

[AdamV12V]

Adam. said:

You are obv an expert Adam and with an excellent moniker

Are you saying a legal letter stating BF has no interest and signed by him, caries no legal standing?

At best its legally challengable by either party, at worst it means nothing at all.

The way ive suggested ensures any solicitor used to sell the property in the future must see the equity split and will execute the deed to ensure the proceeds are split accordingly.

[pork911]

But such a deed offers what protection against bf asserting his rights in the future?

[AdamV12V]

pork911 said:

But such a deed offers what protection against bf asserting his rights in the future?

It dorsnt stop the bf going after some of the daughters share, but it would ring fence and state that the girst £175k of equity belongs to the op. After that, yes, whats left is legally challegable by the bf but at least the op’s investment will get repaid.

[pork911]

AdamV12V said:

pork911 said:

But such a deed offers what protection against bf asserting his rights in the future?

It dorsnt stop the bf going after some of the daughters share, but it would ring fence and state that the girst £175k of equity belongs to the op. After that, yes, whats left is legally challegable by the bf but at least the op’s investment will get repaid.

How does it ringfence from any claim from the bf the £175k share daughter would now be gifting to op?

[AdamV12V]

pork911 said:

AdamV12V said:

pork911 said:

But such a deed offers what protection against bf asserting his rights in the future?

It dorsnt stop the bf going after some of the daughters share, but it would ring fence and state that the girst £175k of equity belongs to the op. After that, yes, whats left is legally challegable by the bf but at least the op’s investment will get repaid.

How does it ringfence from any claim from the bf the £175k share daughter would now be gifting to op?

Because the bf's claim will be based on that he contributed to the equity of the home whilst cohabiting in a relationship with the daughter. his claim is against her share only..... By creating a deed of trust stating the OP is due the first £175k, and amended the ownership to be tennants in common, his asset is protected in the same way the banks asset is protected first in the form of repayment of their mortgage. Only whats in the daugthers name can the bf challenge for a share of, cos its she whom he was in a joint relationship with, not the OP nor the bank!

Trust me, Im right... google it if you dont believe me, or call a solicitor and ask them

[pork911]

AdamV12V said:

pork911 said:

AdamV12V said:

pork911 said:

But such a deed offers what protection against bf asserting his rights in the future?

It dorsnt stop the bf going after some of the daughters share, but it would ring fence and state that the girst £175k of equity belongs to the op. After that, yes, whats left is legally challegable by the bf but at least the op’s investment will get repaid.

How does it ringfence from any claim from the bf the £175k share daughter would now be gifting to op?

Because the bf's claim will be based on that he contributed to the equity of the home whilst cohabiting in a relationship with the daughter. his claim is against her share only..... By creating a deed of trust stating the OP is due the first £175k, and amended the ownership to be tennants in common, his asset is protected in the same way the banks asset is protected first in the form of repayment of their mortgage. Only whats in the daugthers name can the bf challenge for a share of, cos its she whom he was in a joint relationship with, not the OP nor the bank!

Trust me, Im right... google it if you dont believe me, or call a solicitor and ask them

I'm a retired Solicitor. Obviously I must be more rusty than I thought. You say the daughter's share but at the moment she is the only one with a share. OP will only have a share if she gifts it to him out of what is currently entirely her's, and BF is already cohabiting.

[AdamV12V]

pork911 said:

I'm a retired Solicitor. Obviously I must be more rusty than I thought. You say the daughter's share but at the moment she is the only one with a share. OP will only have a share if she gifts it to him out of what is currently entirely her's, and BF is already cohabiting.

Yes, you’re correct in that he already has a potential share over the whole, but as a cohabitee he would have to consent to the remortgage / transfer of equity to put the OP back on anyway so thats hes point to challenge current status or consent and let it go through.

[Countdown]

pork911 said:

I'm a retired Solicitor. Obviously I must be more rusty than I thought. You say the daughter's share but at the moment she is the only one with a share. OP will only have a share if she gifts it to him out of what is currently entirely her's, and BF is already cohabiting.

Just for reference - if she'd done the Deed of Trust thing before the BF moved in it would all be ok? i.e. if the OP wanted to get his money back then he could force a sale of the house?

[usn90]

Why is the BF already potentially entitled to anything?

They are not married, and assuming he hasn’t put his hand in his pocket for improvements to the property( not fixture and fittings)

Then I don’t see where the entitlement is?