Finances in seperation
Discussion
Hi,
I will preface this post by saying that I will be consulting a solicitor but there is a wealth of knowledge on these forums and wondered if anyone might have some advice.
My girlfriend (now ex) and I purchased a property as Joint Tenants, we refurbished the flat and purchased everything 50:50 to keep things simple. A relation of the ex-gf wanted to help out and purchased the kitchen (<£10K) which was fitted by myself and tradesmen (who were paid by myself and ex). Unfortunately the relationship has ended and we have agreed to proceed and sell the flat. The relation is now staking a claim to the money to pay them back for the kitchen and expecting 50% of the cost back from me when the sale proceeds.
All along the kitchen was described as "helping us with our first property" and there was never any mention about owing money or paying them back for it.
I do not want to profit from their generous gift but by owing this money, would wipe out some of the equity which I have accrued over the period of ownership and ultimately leave me out of pocket.
My question is; can someone retrospectively decide that a gift is a loan? Do I have any legal obligation to pay the relative back.
Many thanks
I will preface this post by saying that I will be consulting a solicitor but there is a wealth of knowledge on these forums and wondered if anyone might have some advice.
My girlfriend (now ex) and I purchased a property as Joint Tenants, we refurbished the flat and purchased everything 50:50 to keep things simple. A relation of the ex-gf wanted to help out and purchased the kitchen (<£10K) which was fitted by myself and tradesmen (who were paid by myself and ex). Unfortunately the relationship has ended and we have agreed to proceed and sell the flat. The relation is now staking a claim to the money to pay them back for the kitchen and expecting 50% of the cost back from me when the sale proceeds.
All along the kitchen was described as "helping us with our first property" and there was never any mention about owing money or paying them back for it.
I do not want to profit from their generous gift but by owing this money, would wipe out some of the equity which I have accrued over the period of ownership and ultimately leave me out of pocket.
My question is; can someone retrospectively decide that a gift is a loan? Do I have any legal obligation to pay the relative back.
Many thanks
No.
Without any evidence that the gift was conditional on something (i.e it would be repayable should you part ways and/or sell the property), then the gifting party cannot do this.
Of course, if there is such evidence then it is a different matter.
Legally, the relation has no beneficial ownership in said property (I assume) and therefore has no legal no right to pursue you (or your ex) for any share of the sale proceeds.
If the relative transferred the money to you ex-girlfriend's bank account (rather than to a joint one) this is even more cut and dry, as the gift would have clearly been solely made to her alone.
I am not sure it is worth you paying a solicitor for such a matter.
You may, however, feel that to repay your share of some capital that has increased the equity in the property is the right thing to do though.
You are not having some of this equity wiped out, it is simply returning a generous gesture in kind from part of your profits.
That aside, you cannot, subject to the provisos above, be forced to return this money. To do so would be your choice, just as it was the relation's choice to help you by making the original gift that you have benefited from.
Without any evidence that the gift was conditional on something (i.e it would be repayable should you part ways and/or sell the property), then the gifting party cannot do this.
Of course, if there is such evidence then it is a different matter.
Legally, the relation has no beneficial ownership in said property (I assume) and therefore has no legal no right to pursue you (or your ex) for any share of the sale proceeds.
If the relative transferred the money to you ex-girlfriend's bank account (rather than to a joint one) this is even more cut and dry, as the gift would have clearly been solely made to her alone.
I am not sure it is worth you paying a solicitor for such a matter.
You may, however, feel that to repay your share of some capital that has increased the equity in the property is the right thing to do though.
You are not having some of this equity wiped out, it is simply returning a generous gesture in kind from part of your profits.
That aside, you cannot, subject to the provisos above, be forced to return this money. To do so would be your choice, just as it was the relation's choice to help you by making the original gift that you have benefited from.
Thanks all much appreciated and confirmed what I was thinking.
There was no transfer of funds and the kitchen was purchased directly by the relation and delivered to the property. I have text messages between myself and the third party thanking them for the generosity of the gift.
If we have increased the value and made some gains on the property (which I hope we have), I would be inclined to return a proportion of the sum spent as a gesture of goodwill as it was never my intention to profit from their generosity.
There was no transfer of funds and the kitchen was purchased directly by the relation and delivered to the property. I have text messages between myself and the third party thanking them for the generosity of the gift.
If we have increased the value and made some gains on the property (which I hope we have), I would be inclined to return a proportion of the sum spent as a gesture of goodwill as it was never my intention to profit from their generosity.
Edited by MR1991 on Monday 13th January 15:32
wrencho said:
in all likelhood the £10k kitchen has resulted in >£10k increase in the value of the property. PAy the £5k back and move on, it's not worth the stress.
In all fairness the kitchen is now x years old and is not worth the 10K it cost, and is now viewed as needing some attention. Pay nothing.super7 said:
wrencho said:
in all likelhood the £10k kitchen has resulted in >£10k increase in the value of the property. PAy the £5k back and move on, it's not worth the stress.
In all fairness the kitchen is now x years old and is not worth the 10K it cost, and is now viewed as needing some attention. Pay nothing.I would ignore them as they have no legal right to it and nothing to do with them now
MR1991 said:
Thanks all much appreciated and confirmed what I was thinking.
There was no transfer of funds and the kitchen was purchased directly by the relation and delivered to the property. I have text messages between myself and the third party thanking them for the generosity of the gift.
If we have increased the value and made some gains on the property (which I hope we have), I would be inclined to return a proportion of the sum spent as a gesture of goodwill as it was never my intention to profit from their generosity.
This puts a slightly different legal stance on matters. If the relative directly paid for it there may be (though it is slim) a case to be made that in selling the property (your joint asset) you are selling her property (the kitchen units) as part of this. After all, these are registered in her name.There was no transfer of funds and the kitchen was purchased directly by the relation and delivered to the property. I have text messages between myself and the third party thanking them for the generosity of the gift.
If we have increased the value and made some gains on the property (which I hope we have), I would be inclined to return a proportion of the sum spent as a gesture of goodwill as it was never my intention to profit from their generosity.
Edited by MR1991 on Monday 13th January 15:32
Let me analogise, if you give someone money to buy a new engine - and after installing it he sells the car at a profit - then how would you feel about this if he pocketed the lot and told you where to go?
Regardless, is it really worth it?!
The only thing I can say to you with full confidence and conviction is that the lawyers are always the winners, regardless of the outcome of the case.
They gave you £5k (by putting in £10k to your joint home). Do the right thing and return it or, if you prefer, stand your ground and keep it (you will likely win).
It is your choice, but I know what I would do.
Cheers Tyre Smoke!
Not only are they not legally entitled to this money, I also have a bit of a bug bear with people who throw money around with generosity, to then get arsey when the situation changes. I just feel that you need to be in control of your finances. That includes understanding the risks that money can play in relationships, friendships, colleagues, family etc. Every relationship is different and I'm not saying never to lend or offer help or gift. But do, please be aware that once you have gifted that money, the money has gone. Unless you have specific circumstances outlined in legal terms.
Anyway. I'd imagine if they want 10k back then they are unlikely to be realistic. This isn't how value in property works. They did not invest in your property, they did not set out a payback strategy. They purchased a kitchen as a gift. Nobody will ever know just how much that has increased value. It's an impossible calculation.
You could however add up every penny spent on materials and labour. Then find the percentage that the kitchen played in that. Let's say it was 20%. Get the property valued and subtract the amount the property value increased (or decreased) in that postcode over the term you owned it. Then work out 20% of the gain/loss. Split that between you and your ex and make an offer based on that.
I added the idea it could be a loss, as frankly if it was, and this fella now thinks he has some legal stake in the investment, maybe you could send him your calculations with a request for further funds
I jest really.
Anyway. I'd imagine if they want 10k back then they are unlikely to be realistic. This isn't how value in property works. They did not invest in your property, they did not set out a payback strategy. They purchased a kitchen as a gift. Nobody will ever know just how much that has increased value. It's an impossible calculation.
You could however add up every penny spent on materials and labour. Then find the percentage that the kitchen played in that. Let's say it was 20%. Get the property valued and subtract the amount the property value increased (or decreased) in that postcode over the term you owned it. Then work out 20% of the gain/loss. Split that between you and your ex and make an offer based on that.
I added the idea it could be a loss, as frankly if it was, and this fella now thinks he has some legal stake in the investment, maybe you could send him your calculations with a request for further funds
I jest really.JulianPH said:
MR1991 said:
Thanks all much appreciated and confirmed what I was thinking.
There was no transfer of funds and the kitchen was purchased directly by the relation and delivered to the property. I have text messages between myself and the third party thanking them for the generosity of the gift.
If we have increased the value and made some gains on the property (which I hope we have), I would be inclined to return a proportion of the sum spent as a gesture of goodwill as it was never my intention to profit from their generosity.
This puts a slightly different legal stance on matters. If the relative directly paid for it there may be (though it is slim) a case to be made that in selling the property (your joint asset) you are selling her property (the kitchen units) as part of this. After all, these are registered in her name.There was no transfer of funds and the kitchen was purchased directly by the relation and delivered to the property. I have text messages between myself and the third party thanking them for the generosity of the gift.
If we have increased the value and made some gains on the property (which I hope we have), I would be inclined to return a proportion of the sum spent as a gesture of goodwill as it was never my intention to profit from their generosity.
Edited by MR1991 on Monday 13th January 15:32
Let me analogise, if you give someone money to buy a new engine - and after installing it he sells the car at a profit - then how would you feel about this if he pocketed the lot and told you where to go?
Regardless, is it really worth it?!
The only thing I can say to you with full confidence and conviction is that the lawyers are always the winners, regardless of the outcome of the case.
They gave you £5k (by putting in £10k to your joint home). Do the right thing and return it or, if you prefer, stand your ground and keep it (you will likely win).
It is your choice, but I know what I would do.
Cheers Tyre Smoke!
Offer to remove half the kitchen and return it to the relative. Probably too cheap a shot but it highlights the idiocy of the request (they didn’t give you 10k, they gave you a kitchen after all)
Sounds like the kitchen is a little worn now so if I wanted to make a gesture on moral grounds I’d offer maybe £2k based on wear and tear and recognition of the costs in fitting it
Sounds like the kitchen is a little worn now so if I wanted to make a gesture on moral grounds I’d offer maybe £2k based on wear and tear and recognition of the costs in fitting it
Heres Johnny said:
Offer to remove half the kitchen and return it to the relative. Probably too cheap a shot but it highlights the idiocy of the request (they didn’t give you 10k, they gave you a kitchen after all)
Sounds like the kitchen is a little worn now so if I wanted to make a gesture on moral grounds I’d offer maybe £2k based on wear and tear and recognition of the costs in fitting it
By that logic they should remove all of the units and return them, but then see what impact that would have on the price/saleability of the flat... Sounds like the kitchen is a little worn now so if I wanted to make a gesture on moral grounds I’d offer maybe £2k based on wear and tear and recognition of the costs in fitting it
Also, any ware and tear would have been caused by the couple who have benefited from x years of enjoyment of the kitchen and the uplift in the value of the flat this has generated (which is likely to be a lot more than the base cost of the kitchen units).
For what it is worth, I think the relation who made the gift is the one in the wrong here for asking for the value of the gift to be returned.
As I and others have already said, the OP is under absolutely under no legal obligation to refund half of the value of the gift. Now we have discovered that the gift was actually the units themselves, not the cash to buy the units, this is even more apparent and there is no legal doubt.
I think the OP has struck a sensible balance and the moral high ground by looking to offer a proportion of any profit uplift the gift generated.
You really can't say fairer than that with the facts at hand.
JulianPH said:
By that logic they should remove all of the units and return them, but then see what impact that would have on the price/saleability of the flat...
Also, any ware and tear would have been caused by the couple who have benefited from x years of enjoyment of the kitchen and the uplift in the value of the flat this has generated (which is likely to be a lot more than the base cost of the kitchen units).
For what it is worth, I think the relation who made the gift is the one in the wrong here for asking for the value of the gift to be returned.
As I and others have already said, the OP is under absolutely under no legal obligation to refund half of the value of the gift. Now we have discovered that the gift was actually the units themselves, not the cash to buy the units, this is even more apparent and there is no legal doubt.
I think the OP has struck a sensible balance and the moral high ground by looking to offer a proportion of any profit uplift the gift generated.
You really can't say fairer than that with the facts at hand.
Thanks Julian and others for your input. This is how I am going to proceed (although the idea of returning half the units is rather hilarious!! Also, any ware and tear would have been caused by the couple who have benefited from x years of enjoyment of the kitchen and the uplift in the value of the flat this has generated (which is likely to be a lot more than the base cost of the kitchen units).
For what it is worth, I think the relation who made the gift is the one in the wrong here for asking for the value of the gift to be returned.
As I and others have already said, the OP is under absolutely under no legal obligation to refund half of the value of the gift. Now we have discovered that the gift was actually the units themselves, not the cash to buy the units, this is even more apparent and there is no legal doubt.
I think the OP has struck a sensible balance and the moral high ground by looking to offer a proportion of any profit uplift the gift generated.
You really can't say fairer than that with the facts at hand.
)The relative is having a laugh!
They didn't give it on the basis that the relationship between you two has to last X years!
If they didn't want to risk this, they shouldn't have given it.
Only criteria where I'd say it was morally right to return it is if you were engaged in activity at the time of the gift that was likely to cause the relationship to fail - otherwise, tough.
They didn't give it on the basis that the relationship between you two has to last X years!
If they didn't want to risk this, they shouldn't have given it.
Only criteria where I'd say it was morally right to return it is if you were engaged in activity at the time of the gift that was likely to cause the relationship to fail - otherwise, tough.
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