Any help would be greatly appreciated! I have been told that we should consult a solicitor but money is an issue here, especially if we are about to lose more!!
My husband still owns a house with his ex with an outstanding interst only mortgage of around £130k. His mum loaned him £20k for the initial deposit but he has nothing to prove it was a loan as opposed to a gift. If sold today, the house would probably sell for £155k tops! So after fees, a sale would result in very little!
She left him several years ago and has nothing to do with the house since, either financially or time-wise. He has paid everything ever since. When we got together, he moved in with me and the house was empty for a while. Since he still had to make mortgage payments, we arranged for a tenant to be in the house and pay rent. We have pretty much ploughed all of the rent back into the house for repairs, aiming towards an eventual hassle free sale.
The ex got wind of the rent and is now looking for money. Maybe it''s the impending bankruptcy and her complete lack of financial skills? Who knows but she is now looking for half of the profits. Luckily I own my own business so have kept all receipts and accounts up to date. There was a small profit after the costs, which we have showed to her. However, can we take into account the previous years where my husband paid everything and the house is technically £13k in debt to us?
Anyway, several solicitors letters later and she is asking for £8k to transfer the mortgage into his sole name. We don''t know if the lender will allow this but how has she got this figure? Is it realistic? We don''t think so as in our eyes, she owes my husband!
Oh dear. Your husband should have sorted this out at the time of the divorce. If you don''t, water can flow under bridges and the situation will be harder to unravel.
So it seems you and your wife are joint owners of this house but your husband alone has let it.
Sorry, but he can''t do that. If both of you are joint owners, both of you must concur in a letting. Sorry, but that''s the fact. Why, in principle, should she not be entitled to a share of the profits ? Sure, the amount your husband paid on maintaining the mortgage and repairs and the thousand natural shocks that landlords these days are heir to, should be taken into account, and there may not be much profit. But in principle, the situation seems clear to me.
If the property is in joint names, both of you must concur in a sale. The ex is likely to concur only if the terms are satisfactory to her. Again, I''m sorry to have to tell you that, but you''ll find out sooner or later and you may as well find out sooner.
What do you mean by your reference to bankruptcy ? Is the ex likely to go bankrupt ? That is something else that sets alarm bells ringing. You do realise, I hope, that if this happens, the trustee in bankruptcy could force a sale to realise the ex''s share for the benefit of her creditors ? Whether this would actually happen I haven''t a clue. If it does happen then the probability is that your husband would be offered the chance to buy out her interest from the trustee, and there is something in me which says that this could be one way out of the morass.
Is the sum of £8000 realistic ? I don''t know - how can I know ? But if your husband is going down this route then I am going to advise you that, if there is a possibility of bankruptcy, you need to be very careful because if the transaction is deemed to be at an undervalue the trustee has the right to have the transaction re-opened if the wife goes bust. You simply must tell your solicitor if there is a risk that one joint seller could go bankrupt.
Look, I''m sorry to be so brutally honest. But there''s another issue too. If nothing else, I''m a pragmatic sort of chap, and cost is always an issue and I suspect it is for you. I don''t want to see you good people spend, say £10K when all that is at stake is £8K. If you start getting involved in arguments about whether the money given by your mother in law was a loan or a gift, or how much profit the tenancy produced, and have solicitors arguing it out at £200 per hour, that result is going to be that you could well finish up doing just that.
It helps to get through a minefield safely if you know where the mines are. If your husband and his ex can concentrate on finding a solution that may not be 100% fair but which you both can live with, and keep solicitors out of it, that might in practice be a good way forward.
Oh and by the way. You two good people need to achieve closure. If you don''t get a Court order, even at this late stage, then the ex can, in theory, always keep coming back for more, and from what you say, you need to shut out all future claims if you can.
It won''t get anywhere near a court not a snowballs chance in hell.
You just said she''s nearly bankrupt.
Your husband needs to get a Consent Order agreed with her so that after this neither party has any further financial claims on the other.
As the money supermarket advert says
"You Brits are rubbish at Haggling"
Ok so she''s shown her hand at £8000 offer her you''ll pay for the consent order to be drawn up and no money.
See what her solicitor comes back with.
If you''re going to negotiate you start with your hand way behind your back so you don''t get pulled across the table if you go straight to meeting them half way.
Just so you know the £20k from his mum will be completely and utterly disregarded by law.It gets treated as a soft loan.
Although it''s been paid out in hard cash.
All the best
He now realises he should have done something about it at the time but unless you have done this before, you just don''t know! With regards to the renting, she did know about it but genuinely never showed an interest until she realised the interest rates had gone down and therefore money was potentially being made! She even said she had a friend who may be interested. But we never got consent officially! We have no problem with her having a proportion of any profit in theory but need her to be tied in so that if the interest rates go up and the house then ''costs'' money, she is liable for that and WILL pay up. You can''t have the profit and then walk away in the bad times, but this is exactly what she will do! We know many people have been left being owed by her and don''t want to become another one.
She has come close to bankruptcy before and we are aware that she can force a sale. I believe if it comes to this there is nothing we can do. Our main aim then would be to try and protect my husbands original £20k stake in the house. I wasn''t aware though that they could force more money from us after the sale if they deem an original payment to be unfair! Definatly worth noting - thank you!
We need honestly as sometimes we just see the emotional bits! It''s just so hard to think about giving her money when he has given so much in the past, and still does as they have kids together - above and beyond the CSA requirements, and she essentially just pisses it up the wall! Excuse my French!
A soft loan is one that isn''t really going to be paid back. There are no repayment arrangements in writing. It is treated like a gift.
Depending on how long they were married who put in what becomes less important.
I don'' t understand why, if the house makes little profit, it cannot just be sold and the profits divided. You say there are children of the marriage. Are they adequately housed? If neither he nor she is living there it may be better to sell sooner rather than later because of possible capital gains tax.