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Joshua
Joshua, Lawyer
Category: UK Property Law
Satisfied Customers: 24527
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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Hello. I have a young 50s friend who has got herself in

Resolved Question:

Hello.

I have a young 50's friend who has got herself in a right pickle by agreeing for a (now ex) partner to be a joint mortgagee on her house - and for that he was also added to the house deeds (against the advice of the solicitor). The reason for this was that he really wanted a £47k boat .. and she contributed £30k towards this out of the loan secured on the house as she loved him and thought it would last. Within 2 months of getting the money the partner had scarpered with the boat and not having paid a penny towards the mortgage payments ... and constantly refusing to engage in any communication re getting him off the mortgage of house deeds. I believe in the early days my friend racked up £400+ in solicitors fees where he simply did not respond to letters etc.

My friend continues to pay a repayment mortgage and write to him asking to have a dialogue as he's previously said he'd be prepared to be bought out for £10k .. but has since said that he won't do that as "its his pension plan".

The house is worth about £200k with £100k left owing .. and as someone with income of approx £14kpa she has little capacity to meet the multiples to have a mortgage on her own .. despite paying for it on her own for the last 5 years or so. She is also struggling to pay her bills with in excess of £8k of other loans that she is only just keeping up her payments on .. and hence cannot find the money for another solicitor to help sort the situation out.

2 children (1 under 18) are living in the house with a lodger

So .. have you any advice as to how she should proceed, as she is is desperate to get some closure and is in tears whenever I see her because of this issue

Thanks so much
Submitted: 9 months ago.
Category: UK Property Law
Expert:  Joshua replied 9 months ago.

Joshua :

Thanks for your question. Please kindly RATE my answer when you are satisfied

Joshua :

You mention children - do these have anything to do with the ex partner you refer to please?

Joshua :

Were terms agreed as to how long the loan would be for between her and her ex and was anything recorded in writing? Were the reasons for putting him on the deeds recorded by the solicitor - presumably solely to raise a mortgage to obtain the loan for him to buy his boat?

Joshua :

Does he still have the boat?

Customer:

No .. the children were from a previous relationship.

Customer:

I'm afraid I don't know the duration of the mortgage - but I do believe she has the paperwork somewhere. And yes, as told to me, the reason for adding him to the deeds was to get a joint mortgage to get the money for the boat ... but I suspect there may be more to it than that as the mortgage is for more than the boat value.

Customer:

In terms of the boat .. she has the deed of sale which shows that registered in joint names .. but now when she has contacted the people who record boat 'titles' like the land registry - there is no record of her as an owner somehow. She wants to handle that separately - possibly as a criminal matter

Joshua :

Thanks. There are at least a couple of components to this - namely the boat and the property. With your permission I will deal with each in turn?

Customer:

sure

Joshua :

If her ex partner is a joint owner of her property and she did not enter in to a declaration of trust with him or have any other evidence to show how they agreed to own the property, then the recent decision in the case of Kernott makes it quite clear the starting point for ownership is 50% / 50% in terms of shares in the property. However this can be shifted if she can show by reference to financial evidence that she has contributed more to the property and that there was no intention on her part to make a gift of such contributions to her ex

Customer:

the only thing she agreed to is the £30k for the boat

Joshua :

Her ex is jointly liable for payment of any mortgage with her. hopefully from what you say her solicitor will if not preparing a declaration of trust for will at least have recorded or would be able to provide a statement as to the reasons she placed him on the deeds and show by consequence that there was no intention of her to make a gift of half the equity in the property. She can also point potentially to bank evidence to show that they did not share finances other than the above which can assist.

Joshua :

If they are unable to agree as to how to divide the property then ultimately she or her ex have a right to apply to the courts for an order for sale under the Trusts of Land and Appointment of Trustees Act and to determine their respective shares in the property. As part of this she could seek to acquire his share for the amount determined by the court. The courts have the power to impose a settlement based on what they believe is fair based on the evidence you can both bring.

Joshua :

However to achieve the above it is necessary for her to afford to buy out his share (presumably this would at least entail repaying the mortgage). For this purpose she would need to pursue him for the money he owes her and her interest in the boat. To this end she may need to report the boat as stolen on the basis of her evidence of ownership if she cannot trace it. Harbours have the power to impound disputed vessels and keep records of vessels moored so it should in principle be easy enough for the police to track down the boat. She can consider a county court claim for monies owed to her and a charge against the boat for the purposes of security in respect of such monies.

Customer:

so she needs to go back to her old solicitors ?

Joshua :

It would be very helpful if she can begin to bring together evidence to rebut the above presumption that the property is owned 50/50. This is likely to be her biggest risk and it is crucial she brings together evidence to show that it was not her intention as above. Contacting her solicitor for a statement and notes on his file could be very helpful.. At the same time it makes sense to begin tracking down the boat and the police would be a useful place to start if he is not replying or giving her information as to the location and status of the vessel.

Joshua :

Is there anything above I can clarify for you?

Customer:

ok .. thanks .. she knows where the vessel is ..

Customer:

she doesnt want to force him to sell / give her money back for fear that he'll ask for sale on the house

Joshua :

That is a help. In that case she can consider speaking to the harbour master to ask about his requirements for placing a lien on the boat pending the resolution of the dispute as at least half if not the entire vessel belongs to her for which she at least has the sale invoice and will in due course ideally be able to evidence further once she hears back from her solicitor. Depending on the quality of evidence she can collect from the solicitor her concern regarding his claims on the house will hopefully diminish. If she prefers to delay until she hears back from the solicitor re the boat that is an option open to her.

Customer:

ok .. thanks ... but all in all she needs a solicitor ... and the only way out is to sell the house ? .. or is there a way to put some sort of covenant in place to stop the sale as the kids are in the house ?

Customer:

I mean .. the only way out seems to be a forced sale in front of a judge who reviews the relative financial contributions and context upon which the inclusion of the partner on the deeds was decided .. in order for the judge to then decide the relative contribution from the sale ie .. hopefully .. away from the 50/50 more towards 100% my friend ?

Joshua :

A solicitor will be very helpful if she is required to go to court to resolve a dispute regarding ownership of the property as above as such claims are not straightforward. However it is not true to say the only way is to sell the house. If she can show that he was only added to the deed to raise a mortgage for the loan he wanted and that he agreed to repay that loan in x years/months, then she 1) has a claim against him for the money he agreed to repay under the loan which in theory she can hen use to repay the mortgage or at least most of it and 2) can seek an order that he has no equitable interest in the property. If she is successful in obtaining such order she can be put back in the position she would have been in but for her decision to loan him monies. Much will depend on the quality of the evidence she can obtain and the way in which she can present it (which is where a solicitor can be of great help).

Joshua :

Does the above answer all your questions or is there anything I can clarify or help with any further?

Customer:

sorry .. just one more thing as my friend has co-incidentally been in touch ... I understand that my friend actually has 2 mortgages .. totalling about £70 ... and one of these is for £30k that is for the boat .. so presumably this is the one where the ex has the joint responsibility for the mortgage .. and thus has agreed to pay back the money loaned to the mortgage company. As far as I can tell there was no individual arrangement whereby the ex has said that he'd repay my friend. So .. what would happen if she stopped paying the 2nd mortgage for £30k .. would this prompt the company to seak the money from the ex instead ? .. note .. she does not know where he lives ..

Joshua :

I'm very sorry about that. I'm back...

Joshua :

Just reading your post...

Joshua :

Both mortgages will almost certainly be joint and several responsibility which being the case mans that if the repayments are not met that the lender can place defaults against their respective credit records, ultimately seek repossession and claim back any shortfall from either party or both. The consequences could be very severe. If she can afford to maintain payments for the moment the far better option is to maintain them and seek to recover from her ex in the above manner.

Joshua :

Does the above answer all your questions or is there anything I can clarify or help with any further?

Customer:

ok .. thanks for that clarification ... cheers Joshua

Joshua :

A pleasure. If I can assist any further as the situation develops please do no hesitate to let me know.

Joshua :

If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with though please reply back to me though.

Customer:

thanks

Joshua :

Best wishes

Joshua, Lawyer
Category: UK Property Law
Satisfied Customers: 24527
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
Joshua and other UK Property Law Specialists are ready to help you

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