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Barrister
Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 36629
Experience:  16 years real estate, Realtor. Landlord 26 years
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Need help with split ownership in a property. My dad and I purchased a property with c

Customer Question

Hi, need help with split ownership in a property. My dad and I purchased a property with current market value at 3.5m. He has contributed 1,150,000 towards the property. The house and mortgage is in my name. The current mortgage outstanding is 2.5m. I am now getting married and my husband and I will take over the full mortgage payments. My dad will make no further payments towards the house. What would be the best way to split ownership and acknowledge the contributions my dad has made to the house to date?
Submitted: 2 years ago.
Category: Real Estate Law
Customer: replied 2 years ago.
I have contributed towards 70% of the bond installments since purchase and all improvements and maintenance on the property - I also currently live on the property.
Expert:  Barrister replied 2 years ago.
Hello and welcome! My name is ***** ***** I will do what I can to help. Does father want an equity ownership percentage in the property so he can enjoy any appreciation on his contribution? Is the deed solely in your name right now?..thanksBarrister
Customer: replied 2 years ago.
The house is solely in my name. Father does want an equity ownership %.
Customer: replied 2 years ago.
At the time of purchase, dad stood surety for me. Subsequently I changed banks and then new bank no longer red surety and recorded mortgage solely in my name.
Customer: replied 2 years ago.
*reqd
Expert:  Barrister replied 2 years ago.
Ok, then you could just execute a new deed from you as the grantor back to you and father as the grantees and assign him a percentage ownership interest in the house that would reflect his contribution. So if the house is worth 3.5MM and he contributed 1.15MM that works out to be about 32.86%. You could round up or down to just give him 33% or 32% or whatever he felt was fair with the deed reflecting you as the owner of the remaining percentage. Then as the property increases in value, his investment would gain in value as well.. thanksBarrister
Customer: replied 2 years ago.
Ok thanks - he seems to think that because the 2.5m mortgage has no been paid yet, I should benefit from the 70 odd % ownership interest. But I feel @ the moment the 70% is the bank's and once it is paid it will become mine. Am I missing something here??
Customer: replied 2 years ago.
*should not
Expert:  Barrister replied 2 years ago.
Well, you are the legal owner of the property, your ownership interest is just subject to the bank's claim against it for the mortgage debt. So since you are the one on the hook for the $2.5MM, then you are the majority equity owner in the property, even if you still owe the bank. So if he wanted to do a 70% you, 30% him split, I think that would be a fair ownership division and easier to calculate.....thanksBarrister
Customer: replied 2 years ago.
Thank you for your help. Feeling more confident
Expert:  Barrister replied 2 years ago.
You are very welcome. Glad to help any time.. And for what it is worth, you are 100% owner of the property right now and unless there was some agreement to repay father, legally his contribution would be considered a gift from him to you....thanksBarrister