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Thomas
Thomas, Lawyer
Category: UK Law
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Experience:  BA (Hons), PgDip, Practising Solicitor
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how much do i have to pay my partner after 10 years of a 25

Resolved Question:

how much do i have to pay my partner after 10 years of a 25 year mortgage house cost 117.000 valuation of 214.000 i have an ivestment of 58.000 my partner has no investment only paying half the mortgage
Submitted: 2 years ago.
Category: UK Law
Expert:  Thomas replied 2 years ago.
Hi
Thanks for your question.
To enable me to answer your question could you please respond to the following using the same numbering:-
1. Please confirm that you are unmarried
2. Are their any children

3. Did they contribute more when they were paying half mortgage repayments than they otherwise would have paid if they were living in own private rented accommodation?

4. Did they make capital repayments to pay off significant sums of the mortgage? Ie. one off large amounts

5. Did they pay for/carry out significant improvements to the property which improved the value of the property?

Kind regards.
Tom
Customer: replied 2 years ago.
unmarried no children mortgage in jiont names
Expert:  Thomas replied 2 years ago.
Hi,

Did you make the £58k contribution when you purchased the property?

Do you hold your interests as "tenants in common" or "joint tenants"?

Was your unequal contribution reflected in a Declaration of Trust executed by you/your partner confirming that either this money should be repaid from any proceeds of sale OR that you owned differing percentage share interests in the property?

Kind regards,

Tom
Customer: replied 2 years ago.
hi tom i have put £58k into the house by way of deposit&legal fees the house is not being sold as my partner wishes to move out . joint mortgage holders .as i have large investment in the house this will be taken out the equity what % is my partner entiled to
Expert:  Thomas replied 2 years ago.
Hi,

Thanks for your reply.

I’m afraid it’s not quite as simple as you would think it might be.

If your partner is to move out and you are to buy her share of the equity and remortgage in to your sole name then you need to work out what interests each of you owns. This depends on how the property is held. There are two ways of holding property – 1) as joint tenants (where the shares are indivisible and you effectively each have half or 2) as tenants in common

When you bought the property your conveyancer would have asked how of the two ways you wished to hold your interests. If you contributed more and made them aware of this they would have asked if you wanted your unequal contribution reflected in a Declaration of Trust that you and your partner executed stating that you had X% of the equity and she Y% of it.

If you executed a declaration of trust then when you remortgaged she would only agree if she were paid a sum equivalent to the percentage stated. So, you could work out the equity and then calculate her percentage share.

If you did not execute a Declaration of Trust then you have a bit of a problem because there is a presumption in the absence of agreement that each party retains a 50% share in the equity of the property. If this is the case then there would be a presumption that she was entitled to 50% of the equity of the property in order to transfer the property to you now. This can be rebutted by litigating, but litigating can be expensive.

You would know if you executed a declaration of trust, so I shall assume you did not. In this case she could take advice and seek to claim more than you think is fair having regard to your initial unequal contribution.

My advice would be to work out what percentage your initial contributions to the original purchase price would be (if you have paid half the mortgage each) and then say that you are willing to pay her a sum reflecting her current percentage share in order for her to sign the transfer when you remortgage to your sole name.

If you cannot remortgage to your sole name and pay her this sum then you may suggest paying her a sum of money reflecting her current percentage share and then executing a Declaration of Trust which states then (following you paying her) you own 100% in the equity of the property. She may not agree because she may not wish to stay on the mortgage if she is no longer entitled to anything.

If you cannot remortgage or pay her any money reflecting her share then she is at liberty to apply for an order for sale to attempt to force the sale of the property and release the equity.

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I will answer your follow up questions you may have.

Kind regards,


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