We have had a cowboy builder doing loft conversion on house - 5 week job started in Aug 2010 & still unfinished. We have paid out most of cost upfront so now at a loss. Mutually agreed to get another builder in to finish. Quoted £11k. Ex to be now saying won''t go ahead, but will buy me out at about £230k - meaning we lose about £40k as house valued at about £:270k if work done. My question is if I borrow the £11k myself and get the work done is the some way I could be covered legally to get the £11k back when we well the house, or not? Thanks for any help.
Yes, I think there probably is, but what you are telling me sets some alarm bells off in the old grey matter.
So you are getting divorced. The first thing I''d like to know is whether the house is in your joint names.
Secondly, if you are divorcing, what stage are you at with the financial side of things ?
There is nothing wrong in principle with selling houses in advance of a divorce ; I did it myself, thirty years ago or so. We knew the former marital home would have to be sold, had agreed that it should be, and had also agreed that she should have two thirds of the proceeds. This was all done, no problems, and the divorce followed two years later.
So if you are joint owners, and you are selling because you both want that to happen ( as opposed to selling because there is a Court order ) then you simply have to agree how the money will be divided. The solicitor who does the conveyancing must have clear instructions as to how the proceeds are to be shared out. To have the work done at your own expense and hope that he will do the right thing could be risky.
I think some wikivorcers might say that there is some risk in selling the house in advance of an order, and there is some truth in this, but I suspect that for you the reality is that you have to have the work done before you can sell it. In practice, whatever the legal niceties, I think that if he signed a contract to sell, and your solicitors had clear instructions from both parties as to how to split the proceeds, and both parties had access to legal advice, the risk should be very small.
But I think you need to get this sorted out and legally buttoned up before you start borrowing money and getting the work done. I feel that a Court would have to consider the reality of the situation, but even so, I don''t advise that you sell without agreement as to how the proceeds are to be split, unless you want the money stuck in your solicitor''s bank account until there is agreement as to who gets what.
I have to make the caution that I do not know the full facts about your financial situation and, without that knowledge, there is always the chance that advice like this could be risky. I would honestly recommend that you see a solicitor to get some agreement drawn up.
Mike is right that the house might not sell without the work being done so probably the choice is between paying for it and agreeing for your ex to buy you out.
Remember that being bought out saves estate agents'' fees so you wouldn''t realise the whole £270k. Also, the house might take a while to sell, leaving you both in limbo.
It might well be worth accepting your ex''s offer to buy you out, maybe negotiating a bit around the price. But you need to have this as part of a Consent Order so that he can''t then try to get some of the money back later.
I think that I have entered into all this very naively, thinking that we would be amicable and do whatever was best for the children, and with that in mind we agreed to split everything 50:50. However, I earn £18k and he earns £38k and the children, at their request, are not going to live with us 50:50 as we first thought, but have asked to live mainly with me and spend every alternate weekend with their father, and perhaps tea one night each week. With this is mind, and now looking at losing so much value off the house, I am thinking that a 50:50 split may not be the best way to go.
In answer to your questions the house is in our joint names. We have a mortgage for £45k on it and it is currently valued at approx £250k, but we have been told that we would be lucky to get that because of the uncompleted work, scaffolding, etc, but could be worth up to £275k if work finished. He is saying that he would like to take on the house and buy me out at half of £230k (less the mortgage), which I think is very unfair as he could then spend the extra £7k and sell the house for £275k, meaning that the children and I lose out on quite a lot of money as a deposit on another house.
He is aged 48 and I am aged 46. Our children are aged 14 (son) and 15 (daughter). We both have pensions, mine is pretty small, but we have paid AVCs into his local govt pension. I will be trying to buy a 3 bed property within public transport distance of the children''s schools, but will find this very difficult to do on half the equity of the house, as my salary is not large so I''ll be unlikely to afford a decent mortgage. Do you think it would be reasonable for me to ask for more than 50% split in my favour?
As I''m writing this I can tell that it would be best to sort out how everything is to be split first, before going ahead with the sale of the house. Just wondering now if there''s any way that he could be legally required to finish off the work on the house before it''s sold?
If you or anyone else has any thoughts on any of the above, please let me know - thanks.
You could have another problem.
If the house is in joint names, both of you must sign a mortgage. The only way you could do it on your own is by way of an unsecured loan, that is, if you can raise one.
Having said this, there is a reasonable chance, I think, that having regard to the disparity in incomes and that you have the day to day care of the children, you might get more than 50% anyway, simply because on his salary he can afford a higher mortgage and you need a house large enough for the children. So yes, I think it is reasonable that you should have more than 50%. And I think the Court should make allowances for the fact that you had to spend the money to get the house sold.
Sadie talks about a Consent Order. A consent order is an order made by the Court where the parties are in agreement as to the terms of the order the Court is being asked to make. So if there is no agreement, there can be no consent order. Unless you can agree on the division, you have to ask the Court to impose an order on you which is binding on both parties.
I think the bomb proof advice is , as Sadie says, get agreement before you get the work done and the house is marketed. You could, I think, go ahead with the work even without an agreement, but there is an element of risk in this, because if the matter goes to Court you can''t be sure what the Court will do. But I do not advise marketing the property without agreement as to the split, or alternatively a Court order, for the reasons in my previous post.
You have to remember as well that the family home, important thought it is, only forms part of the picture. There are other things to consider, like pensions and maintenance. My provisional view is that you should get more than 50% because you have the care of the children, he has the higher earnings and can therefore afford a larger mortgage than you could. In cases like this it is by no means uncommon for the mother to get more than 50% for these reasons. However I stress, there is never any certainty about these things. If there was there would be no need for courts or lawyers.
Bear in mind, you can always settle quickly for a rotten deal. Sometimes you have to be prepared to fight your own corner.
Given what you said about agreeing the division, could I ask you to say what you think would be an equitable split in my circumstances, if you know about these things, or if anyone else does who is reading this post?
Also do divorcing couples usually apply the same split to the house, pension, maintenance, etc, or does each thing tend to be negotiated separately?
How things are split varies according to circumstances. In my case the house value and assets were split in terms of a sum of money (because there was a maximum amount I could raise to buy him out of the house) and the pensions split according to a percentage. But other people do it differently. It is a matter of making sure that your priority needs are met - in your case I expect it will be housing the children, though you should also go for a share of his pension, particularly if you have been contributing to his AVCs. You may want to trade off getting more of the house against his pension, though.