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Thomas
Thomas, Solicitor
Category: UK Family Law
Satisfied Customers: 6522
Experience:  BA (Hons), PgDip, Practising Solicitor
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Bank of mum and dad question. Our name on mortgage their name

Resolved Question:

Bank of mum and dad question.
Our name on mortgage their name on deeds.
They now have no jobs and can`t afford mortgage. We have been paying for approx 14 months out of the two years. We now cannot afford it as our bills rising due to having to pay out this money. Can we make them homeless? Would bank statements prove the fact we pay mortgage and they don`t to the housing people?
We don`t want to lose our house over this. Is there anything we can do.
They can`t sell and downsize as have two children and another on the way. Its a three bed house.
Any suggestions please.
Submitted: 2 years ago.
Category: UK Family Law
Expert:  Thomas replied 2 years ago.
Hi
Thanks for your question/n .

For clarity and the avoidance of doubt, could you please respond to the following USING THE SAME NUMBERING:-
1. Have you downloaded a copy of the land registry register for the property?
2. Are you certain that they are named as registered propreitors of the property on the proprietorship register of the title?
Kind regards.

Tom
Customer: replied 2 years ago.

Yes we are absolutely sure they are down on the Land Registry. We just secured the mortgage as they were self employed at the time and had not got 2 years worth behind them

Expert:  Thomas replied 2 years ago.
Okay.

Are you named as guarantors of the mortgage? It would be highly unusual for you to be named as mortgagors (as opposed to guarantors).

Has the lender threatened repossession yet?

Would they consent to a sale?

Tom
Customer: replied 2 years ago.

no threat for repossession as of yet because we meet the payments. we will sell but have to prove that the house is not theirs fully to get them housed. How can we do this?


 


We don`t want repossession threats cos these would be on our house not theirs. Also our credit will be shot, again not theirs.


 


The motrgage is ours on our house so they could buy their house. As nobody would give them a mortgage.


So on paper they own their house outright. But of course don`t.

Expert:  Thomas replied 2 years ago.
Hi,

Ah, I see. You took out a mortgage on your own house and gave them the mortgage advance so that they could purchase their own property. Is this correct?

Tom
Customer: replied 2 years ago.

yes. Sorry not always able to explain properly.


So is there anything we can do?

Expert:  Thomas replied 2 years ago.
No problem.

Did you execute a declaration of trust with them when they purchased the property stating that you have an interest in the property?

Tom
Customer: replied 2 years ago.

Its family so the trust as such is verbal. We are not at logger heads with them over this. We are trying to work together to sort this. We have been told we have to make them homeless for them to get help with housing. Because on paper the house belongs to them. Would signing the house over to us help?

Expert:  Thomas replied 2 years ago.
Hi

Thanks for your patience.

In order for you to be able to force the sale then you would have to establish a trust in your favour. This is usually done expressly by executing a declaration of Trust, that you didn’t is a bit of a problem. There is legislation that you can use to establish a trust but if it is disputed then you would have to litigate and bear the burden of the cost of this, which can be considerable.

So, you need to keep them onside and come to compromise.

If they consent to a sale then my advice would be to see a local solicitor about executing a declaration of trust now, confirming that the trust effectively arose when you purchased the property but that it was never formally executed. It should be drafted to say that if they are not able to meet your mortgage payments then a power of sale arises.

You could then enforce this power of sale (albeit with their tacit approval) using the declaration of trust. They could attempt to use the declaration of trust as evidence that they did not wilfully give up housing in order to claim housing benefit. This is something about which you should seek the advice of a benefits expert in your area. There will be a community benefits office.

I cannot stress the importance of avoiding becoming adversarial with them. If you did then they could avoid being constructive and invite you to litigate. You could then conceivably face paying legal fees on top of the mortgage and then presumably mean that you would be more likely to fall in to arrears with the mortgage and face repossession. Your relationship with them is the key to this.


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Kind regards,


Tom
Thomas, Solicitor
Category: UK Family Law
Satisfied Customers: 6522
Experience: BA (Hons), PgDip, Practising Solicitor
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