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I recently sent this reply to a question that was answered

Hi, I recently sent this reply...
Hi,
I recently sent this reply to a question that was answered but I haven't heard anything and it's been a week. Not sure if it has been received and wondering if someone else can helpI partly own a flat in London and the other party has advised that because of the 'Constructive trust law' that came about in 1996 i should only be entitled to get interest on the deposit that I paid and she is entitled to the rest. I'd like to tell you the full story and would like to know what you think is likely to happen if this case went to court.I'd also like to know who takes who to court, how that gets started and who should pay the court costs. Also would I need to attend in person?So ....
Myself and a friend bought a flat together in London around March 2007. The contract we signed was for 50/50. Verbally we agreed that when the property was sold, she would get her 25k deposit back and I would get 5k back. We also verbally agreed that after deposits we would split what was left 45/55 as her deposit was higher.In December 2007, I moved to Australia. The other party, Sam was living at the flat with her partner and was happy to continue paying the mortgage.In April 2009, Sam moved out and rented the property out. The tenants she chose trashed the place and left us with a lot of debt. In the end, they had to be evicted in 2011. I came back from Australia to paint the flat, interview new tenants and a few other things. I believed at this stage that the debt they left and all other expenses were always split 50/50.At this point, I suggested we use an agent to rent out the property. Sam said she wanted to do it herself and would pay herself 60 pounds per month for managing and all other money would be left in the joint account (the rent was always higher than the mortgage)In 2014 in a casual social discussion, I made a passing comment that I would be happy to get my deposit back. The house lost a lot of value shortly after we bought it and seemed to fluctuate a bit after that. I definitely didn't mean that I only wanted that back but that is what she took it to mean. Although at the time it was not discussed further.We spoke occasionally on the phone about the flat and as far as i was aware, she was happy managing the flat and paying herself for it. At one point she told me she was paying herself 200 pounds per month.She now says that, she was paying herself back debt from the first tenants. She also changed the rent payments to go direct into her back account without with discussing me and says she hasn't kept track of the income and expenses. The rent is currently 400 pounds a month greater than the mortgage.i'd love to know your thoughts. The other party is still renting out the flat and has not lived there since 2009.Look forward to hearing from you and grateful for your help.
Thanks
Claire
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Answered in 1 hour by:
11/10/2017
Clare
Clare, Solicitor
Category: UK Property Law
Satisfied Customers: 34,589
Experience: 25 years exeperience
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Thank you for your question

My name is Clare

I shall do my best to help you but I need some further information first

How much is the property worth and how much is outstanding on the mortgage

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Customer reply replied 1 month ago
Hi,We bought the place for 189, 000. Between us we paid 30,000 deposit. The mortgage is interest only so still at 159,000. I expect the value has increased by around 100,000 or maybe more.

Do you want to force a sale of the property?

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Customer reply replied 1 month ago
No, that's not a priority for me. We were planning to sell in two years time. I'm ok with that. We just realised after a discussion in May that we were thinking differently about how things should be split. We were discussing changing the contract to make her share greater for looking after the place. She originally wanted to change to 85/15 but I would like more than that so just trying to find out what I am entitled too.Many thanks for your help.

Just for clarity - has she actually lost out in any way by looking after the place?

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Customer reply replied 1 month ago
Only for time and stress. She is now saying she was in debt for a while but paid herself back. For the last 18 months or so rent has been around 400 per month greater than the mortgage. She told me back in May she had about 3500 Profit.

Do you actually believe she is entitled to any compensation?

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Customer reply replied 1 month ago
I think so ... a little perhaps. Mostly because she has expressed how stressful it has been. However, If there are no major expenses the monthly profit will amount to a lot over the next two years which could be a big compensation in itself. What do you think?

I would never prevent someone from making a generous acknowledgement of work done - however it appears that your friend is taking a reasonable income form the property that she has no plans on sharing with you - and she is being substantially less that generous or indeed honest with you.

If she wished to prove a "constructive trust" base don a throw away conversation she would have to show that she had in some way placed herself in a worse financial position by relying on that statement - and it is clear she has NOT made any such loss.

You have already offered a compromise that reflects that she put in a larger deposit - and frankly if you do still which to make a further gesture then a 60/40 split would be more than generous

I hope that this is of assistance - please ask if you need further details

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Customer reply replied 1 month ago
Thank you so much for your message. It's really great to hear a second opinion on this. If we don't agree between us on the amount to change the contract too, could she take action against me? What will happen when the flat is sold? Will she need to take me to court?If I wanted her to buy me out, could I insist on that? What action would I need to take?Thanks again for your asssistance

You can indeed insist that the property is sold and get an order for sale if you wish.

As things stand the entire equity is split 50/50 between you - no allowance for deposits or anything else

If you cannot agree the change then yes she could try the court option - but she has little chance of success and would then have to pay your costs

Clare
Clare, Solicitor
Category: UK Property Law
Satisfied Customers: 34,589
Experience: 25 years exeperience
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Clare and 87 other UK Property Law Specialists are ready to help you
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Customer reply replied 26 days ago
Thank you very much for your help. I may be in touch again if I need any more advice on this.
Customer reply replied 7 days ago
HI Clare, I have one more question for now. Can you tell me if I will need to attend if this goes to court. I live in Australia, so could be difficult.
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Customer reply replied 6 days ago
Many Thanks
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Clare
Clare
Clare, Solicitor
Category: UK Property Law
Satisfied Customers: 34,589
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