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Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4353
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
43581946

# Im trying to calculate the loss on a property. Im getting

### Resolved Question:

I'm trying to calculate the loss on a property. I'm getting confuse with the maths. Here's the situation.

Partner and I contributed \$110k (her)+ \$115k (me) towards total cost of acquisition and construction of \$926,452

Property is now valued at \$650k. She's walked out, taken her 110k with her, and left me with loans and property.

How much have I lost?
Submitted: 2 years ago.
Category: Finance
Expert:  Rakhi Vasavada replied 2 years ago.

Dear Friend,

Hello and welcome. Thank you for using Just Answer.

You both contributed 110k + 115 = 225k to acquire 926542 valued property. Where did the balance come from ?

Customer: Balance was borrowed from bank

Ok...

She has contributed \$110k and she walked out with the same amount. It is YOU who is left out with the property valued much lower and with payment of loans.

Were both of you on the DEED of the property ?

Customer: That's right. I'm in the house and servicing the loan

Are BOTH of you on the title of the property ?

Customer: Yes, but it's since passed to me

How did it passed to you ?

Customer: Court order, by consent.

Oh.. I see.

So, technically speaking, you are the sole owner of the property.. Am I right ?

Customer: Yep
Customer: weYep we are in family law proceedings now. I need the maths to help my case to help show how much she ought to pay me

There are two issues involved here. Let me explain. Both of you contributed almost half each. So, theoretically speaking she is responsible for half of the payments that you make and also the loss.

BUT she has put you in very sorry situation. By consent, you have let her go. She took out ALL her money that she contributed and walked out without losing a penny.

So, in the eyes of the bank, it is YOU who will remain solely responsible for the payment of the loan. You have lost almost half of it.

Customer: Ok... So what is the loss, to me, taking into account the 110k she's taken out?

Technically speaking the HALF of the amount of that + half of all the payments that you will make in future.

Customer: Ah, no, I didn't consent to her taking the 110. She just did that. The orders to put house in my name were interim. I had to do it while I had capacity to secure loan

Ok. So you did not consent her taking 110k. Anyways, she had contributed half of it. So was she responsible to pay half of all monthly installments. Your prima facie loss would be half of 110k plus half of all the payments that you will make. She was half owner of the property.

However, from your family law proceedings, you would be able to go after her for entire 110k as that were withdrawn without your consent.

Customer: Are you able to put this all together, plainly and clearly? With her now off the loans and title, what is the value of the loss I'm currently sitting on, and how much should she be responsible for?

Let me put in more simpler terms.

your loss would be 110k + HALF of all the payments that you will make in future to the bank

Customer: I'm sorry, I'm struggling to follow. Lets say for sake of example the property was sold today for the 650k it's been agreed value. What would my loss be?
Customer: And how is that calculated?

This is little different. While answering, I presume you are keeping the property.

Customer: Yes

However, if you were to sell it at \$650,000,

your loss would be \$926542-650000 = \$276542.

It is YOU who will take this entire loss as the sole owner of the property

Customer: Yes, but I'll argue in court that she should be made to pay some of this loss. That's what I'm trying to quantify. How much am I out of pocket, taking into account that she took out the 110 on top of the capital loss

She should be made to pay half of \$276542 and Half of 110k which she took out.

sorry...

She should be made to pay 110k + Half of capital loss

Customer: That's more like what I thought. Can you put that in simple statements so its simple to follow the logic?
Customer: How do I express that to the judge and her solicitor?

Let me tell you all over again. You and she contributed almost equal amount each. Your 115k is still invested so she too should keep her 110 k invested. Also she being 50% partner, make her liable for 50% loss as well

Am I clear ? I am just roughly trying to quantify the loss.

Customer: So.... If nothing changed, and she walks away without a payment (as she would like to) I'd be out of pocket for the full capital loss and her 110

YES, absolutely correct. Now you got it right.

Customer: to fix this she should return the 110 and pay half the capital loss

yes, that is right.

Customer: so capital loss is approx \$275k plus her 110k. In a perfect works she ows me \$375k

yes, that is what she is supposed to make good.

Customer: Never going to happen, but having he extent of my loss clarified will be important.

Yes, you should make your stand clear. She should not have been allowed to pass the title to you. By doing that, she has easily walked out of the mess.

Customer: Ahhhh, that was my doing. If I hadn't taken title when I did I could nev had taken title .... And I'd till swallow the same loss.
Customer: Ok. I'll need to put this in clear sentences. When I have can I show them to you to confirm I have it right and clearly expressed?

sure.. you can certainly do that. To reach me directly, kindly begin your question by prefixing "For Rakhivasavada..........." and you will reach me directly in future.

Customer: Thanks. I'll do that first thing tomorrow and repost to you

sure..

I am sure this would help.

You may please leave a positive rating if this helps as that is the only way we receive credit for assisting you. Alternatively feel absolutely free to revert with more queries if you have.

Warm Regards

Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4353
Experience: Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
Customer: replied 2 years ago.

Thank you so much for your help yesterday. I've tried to put it succinctly in the paragraphs below. Could you please check my logic?

Also, a question that will be asked, why does she need to return the full \$110 that she invested?

Finally, and I'm not sure if this is within the rules of JustAnswer so please forgive me if this is inappropriate. A statement outlining the finances in this situation from someone as qualified as yourself will carry more weight in the court than myself. Are you able to be hired to provide such a statement?

Here's what I've drafted this morning. Your comments would be greatly appreciated.

Thanks

Financial Impact on the Applicant

1. The respondent and I purchased the Seaford Property jointly, making all decisions re purchase and costs jointly and equally. We both invested cash into the Seaford Property in roughly equal amounts, being:

1. \$110 000 deposited into the Offset account by the Respondent

2. \$115 000 via the extension to my equity loan

2. The total cost of acquisition and construction was \$926 452 (see affidavit of XXXXX XXXXX affirmed 14th June 2013)

3. The agreed value of the Seaford property is \$650 000

4. The total loss associated with the property is therefore
\$926 452 - \$650 000 = \$276 452
and shared equally this amount would be \$138 226 each

5. At present I am carrying both the Respondents share of this loss as well as my share of the loss.

6. In addition to this \$276 452 loss the Respondent has withdrawn an additional \$110 000 cash from the investment via the Offset Account. Leaving me to cover:

1. Full Capital loss \$276 452

2. Payment to Respondent \$110 00

3. Total Loss carried by me \$386 452

7. Taking the house as the only significant asset in the relationship, and working on roughly equal contribution to the investment, the Respondents share of the loss that is currently being covered by me is:

1. Half the capital loss \$138 226

2. Return of her withdrawal \$110 000

3. TOTAL \$248 226

8. To make right this situation the Respondent needs to forward me a payment of \$248 226

Expert:  Rakhi Vasavada replied 2 years ago.

Dear XXXXX,

To begin with, you have calculated perfect. All you have asked for is half of capital loss and the 110k that she took away.

You have also drafted it nicely. There is no need to change anything. Everything is written in plain, easy and lucid manner to understand.

However, I would, at this point, draw your attention to one point that the Respondents may say to counter your claim. Kindly draw attention of your Solicitor. There are chances that the Respondents come up with the argument that it was YOU who let the Respondent walk out of the Title with consent and that YOU are now suppose to bear all the loss arising out of the property.

This is one point that can create little hurdle for you. Sorry to be frank but I have a duty to draw attention to a point that can harm you potentially as letting her walk out of the title was a grave mistake. Sorry for being frank and I apologize if I am offending you with this observation.

Rest so far as claim goes, it is PERFECT and there is no need to change.

I am sure this would help.

You may please leave a positive rating if this helps as that is the only way we receive credit for assisting you. Alternatively feel absolutely free to revert with more queries if you have.

Warm Regards

Customer: replied 2 years ago.
Thank you,

I'm not overly concerned about the fact I let her out. It was by way of a partial property settlement, and the reasons for the orders sort were clearly stated because if the transference hadn't happened when it did we old have been forced to sell the property as neither of us could have secured the loan.

I'm still not 100% sure how to explain that the 110k needs to be paid back. Could you give me a sentence or two to explain that?

Finally, is it appropriate to ask you to provide this advise to the court as an expert? I'd pay you for that time obviously. I'm thinking a letter would be sufficient.

Thanks

Expert:  Rakhi Vasavada replied 2 years ago.
Dear XXXXX,

There are two things involved. The only logic behind asking her 110k back because you BOTH contributed that amount at the beginning. If she were let to walk out of the title, should would of course not get the initial contribution back, + she would be bear half of the capital loss that is due to lesser valuation. This is the only logic.

Secondly, as per terms of service, we are prohibited from establishing direct contact with the Client. So, this is the only platform through which we can interact.

I am sure this would help.

You may please leave a positive rating if this helps as that is the only way we receive credit for assisting you. Alternatively feel absolutely free to revert with more queries if you have.

Warm Regards
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4353
Experience: Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years

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