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Occupational Rent

  • compwizz666
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3 years 9 months ago #487141 by compwizz666
Occupational Rent was created by compwizz666
Hi, trying to help my friend out and looking for advice as she it at wits end. My friends partner got her to agree to a co-habitation agreement in 2004 as they were both living in same house and in hindsight I think he may have planned this all along. In 2013 she discovered he was seeing other women while he worked away in London. Second mobile phone, secret chats etc gave it away. He left the home but returned saying he had changed but one of the other women got in touch via FaceBook and proved otherwise as he had been violent to her so he left again at the begining of 2014. Her ex has got solicitors involved now to claim half of the house equity since the signing of the co-hab and looking for occupational rent since he left. She was asked to get a valuation by the solicitors which she did at the end of 2014 to which her ex wasn't happy about the value. both parties went to court recently to discuss requests for investments etc and the judge asked for another valuation which she wasn't happy about as he left in 2014 and hasn't paid anything to maintain the property since he left. He is also looking for occupational rent up to current date, why when he left in 2014. Anyone help us out as to what he can actually claim ? As part of the co-hab she is not entitled to his pension but IS entitled to 50% of his investments. So, I believe anything he put into his pension after the co-hab should be classed as an investment and she should get 50% is this correct. She's not after his pension fund, only 50% of what he invested in it since the co-hab was signed. Also, does the calculation go to current day of the day he left ? If it all stops when he left due to his infidelity then surely the first house valuation should stand and used for equity increase calculations. Any help gratefully received.

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3 years 9 months ago #487144 by .Charles
Replied by .Charles on topic Re:Occupational Rent

anything he put into his pension after the co-hab should be classed as an investment and she should get 50% is this correct?


No, I’m afraid not. Pensions belong to the pension in whose name they are held. The only way a court can become involved in dealing with a pension is when a *spouse* makes a claim on the pension. As your friend is unmarried the court cannot deal with the pension. To say your friend is not after the pension fund, only half the amount of the invested monies is a legal argument that holds no water.

The same can be said of investments. Your friend is not *entitled* to any of the ex-partner’s assets. The law treats the parties as friends who choose to share a house – no more and no less. The TR1 transfer document and the co-habitation agreement) will be the main guide and other written evidence may be given some weight. As for verbal accounts, it will be a case of “he says, she says” which might come down to who gives the most credible evidence at trial although this would assume that the documentation is not clear.

Occupational rent is a concept more than a monetary claim. As an example, if two people live in a property and the mortgage is £1000 per month, each party should pay £500 towards that mortgage. The cost of living in the property is £500 each which is paid in mortgage rather than rent.

If one of those parties leaves the property, the remaining person has sole occupation of the property therefore has the benefit of the half of the property that the outgoing person is no longer occupying. On this basis the person who has left arguably does not have to pay their half of the mortgage as they are no longer in occupation and can expect the remaining person to cover their half of the mortgage.

That is the concept of occupational rent. It’s not exactly cut and dried as the mortgage might be a capital repayment mortgage in which case the remaining person is reducing the capital by twice as much as much as they would normally and they should receive a benefit for that portion. Also, if the mortgage is a small percentage of the value of the property, the remaining person is *actually* occupying the outgoing person’s ‘paid for’ portion of the property - rent-free. Adjustments would be made to account for this.

Turning to the value of the property, would it be correct to say that the second valuation was obtained at the court’s behest and was a jointly obtained valuation? If so, it would be difficult to take issue with the valuation and the mere fact that the second valuation has been obtained means that the first valuation has been discounted.

Whatever your friend does, she should be aware of the fact that this type of case is dealt with in a civil court where ‘costs follow the event’. This means that whoever loses will end up paying the winner’s costs. If your friend is the defendant and she loses her case she could be subject to a bill of many thousands of pounds.

Charles

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3 years 9 months ago #487147 by compwizz666
Replied by compwizz666 on topic Re:Occupational Rent
I believe the co-hab agreement stated each person was entitled to 50% of any investments made during the agreement. It does say she is not entitled to his pension as it stood at the time of the agreement but he increased the amount he invested in his pension to hide his money away after they split up. A pension fund is an investment product so surely if she should be entitled to 50% of his investment not the pot as a whole but each contribution. He has also bought shares in various companies, again another investment. I would have thought she is entitled to 50% of any monies invested in shares , not what the value they were or are now. Regarding the house, the first valuation was at the request of ex's solicitor and the second was pushed for in court by the ex's solicitor. Is there a cutoff date though for all this, as he left due to HIS infidelity in 2014 and thats when the first valuation was done. If my friend had extended her house at her expense, surely her ex would not be entitled to any of the increase in value because of this as he stopped paying anything in 2014. If it goes to current date then he needs to provide more evidence of his investments as he has only divulged information up to the point he left at the start of 2014 as HE said thats the cutoff date. Thanks again

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3 years 9 months ago #487148 by compwizz666
Replied by compwizz666 on topic Re:Occupational Rent
Also, forgot to mention, the mortgage had 2 endowment policies running to clear the debt and the co-hab agreement metioned that they both existed and for what the purpose was ( to clear the mortgage ). However her ex cashed in one of the policies early to use the cash to buy more shares. At some point later he then paid the money back to clear part of the debt. Surely this is a breach of the agreement and does this not make it null and void.

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3 years 9 months ago #487158 by .Charles
Replied by .Charles on topic Re:Occupational Rent
It sounds as though the co-hab agreement had done more harm than good.

Your friend would need a barrister's opinion on the interpretation and application of the agreement.

I personally don't agree on your view of the pension. A pension is a financial arrangement for a single person and cannot therefore be a joint investment. The court has no power to make an order in relation to the pension.

Whether the pension is an investment or not for the purposes of the co-hab agreement is also up for discussion as the pension will not crystallise until retirement a which point the value will be known. Pension funds can lose money and can collapse therefore the value of the monies paid into the pension - if they were to be taken into account - might be less than you think.

Whether or not the derivation of the money paid into the pension is joint funds is a matter of legal opinion hence the use of a barrister .

Did a solicitor draft the co-hab agreement?

Charles

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3 years 9 months ago #487196 by compwizz666
Replied by compwizz666 on topic Re:Occupational Rent
What about the dates. He left in 2014 and the mortgage was paid off soon after. As its not gone to trial as such we are still looking at mediation to save costs. He has paid nothing towards the running costs of the house since he left and he has stated that HIS cuttoff point is 2014 and hasn't provided any details of earnings etc since his cuttoff date. He wants it all his own way but we need to know what he is actually entitled to, not what he wants in his own mind. Cheers

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3 years 9 months ago #487197 by hadenoughnow
Replied by hadenoughnow on topic Re:Occupational Rent
If she has been living in the property and he hasn't then the running costs would be her responsibility. I cannot see why he should produce proof of earnings. This is not a financial settlement on divorce it is a matter of
Property Law. The property will be divided according to what is on the deeds.

It sounds to me like the endowments may be investments that are covered by the agreement. The legal status of the agreement needs to be ascertained.

Hadenoughnow

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