I jointly own a property with my sister I live in it and she lives in Spain, where do i stand?
Wednesday, April 28th, 2010 at
5:22 pm
I purchased the property i live in with my sister in November 06 and we each put in an equal share of £34000, hers in cash and mine in the form of a mortgage. The purchase price of the property was £61500 and the remianing £6500 was to be spent on works on the flat including the installation of a damp course and various other works. There were unforseen problems with the flat and the money was used up much quicker than expected and since then all remaining work on the flat has been funded by myself. My sister currently lives in her own property in Spain. The original intention was an investment for her and a hand on the property ladder for me, she now wants to withdraw her money from the property and the subject of percentage of the profits came up. I stated that as this was my home and because i had pur approxamatley £5000 more into the property that i should have a greater share, but she says she wants 50% of the current market value. I want to know legally where i stand on this. She will if we sell be effectivley making me homeless as it’s very unlikey i will be able to afford another property on my own, plus i feel as i’ve put nearly all of the work and a lot more money into the project that i should be entitiled to a greater share of the profits. I had considered taking a mortgage out with my new partner to buy her out, but if she insists on 50% i will be unable to do this as it will be unlikely there will be enough equity on the property. Current market value when the falt is complete will be about £85000. Any help or advice will be greatly appreciated.
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Tagged with: Mortgage • Profits • Property Spain
Filed under: flat sale
If you can’t afford a Solicitor, and you live in the UK, go the Citizens Advice Bureau.
In the front room?
Are the works still ongoing? Stop them.
If the market price is likely to be £85k when the works are complete, then what will the value be with half completed works and a sitting tenant?
It looks like the original documentation will show you each have a 50% share. I presume you didn’t draw up any other agreement.
The best way round would be to negotiate with your sister.
Hi, Ok first of all you have the properety valued as you have done so, next you offer your sister a resanable sum for her share, she cannont expect 50% as you are resident of the proberty and she can’t sell it again as you are resident. As long as you are paying the mortgage there is nothing she can do. It will make no difference even if she attempts to sell your home you will have to sign papers for the sale to go through so you simple don’t sign any papers. She can jump and scream as much as she likes it’s your home you live there and she can’t evict you as you are paying a mortgage. So don’t worry if she want’s her money then she will have to wait until the mortgage is payed off and the house?flat maybe sold. Understand the property is nether yours nor her’s it also belongs to the mortgage lenders and they simply will not allow you or her to sell it just like that until they are paid so nether of you will benifit from a sale at this moment in time. Try to explain to her that this is a good investement for both of you. no use in a family fude.
Dr K.I.A.
When it comes to money, even family members need to put things in black and white, as you have found out. Had you drawn up a contract which prevented her from withdrawing her share while you are still occupying the house, and also dealt with the matter of improvements, it would have prevented this mess. Yours is a cautionary tale. Unfortunately, as you don’t have any binding agreement, it is going to be messy. You have to try and remember what were the ‘original intentions’. Did you both agree that things would be split 50:50 whatever work was done on it? Did she agree to the extra work you did on the house? Did she say she wanted to be able to take out her money whenever she needed it?
I suspect what you told us is not the full story. But there are 2 main issues: 1) you don’t want to sell right now, and can you stop her?, and 2) you want more of the money if you sold. On the first, she cannot make you homeless if you have moved in. But if this is not resolved, your relationship will be in tatters, permanently. As for 2, it is a tricky business to assess how much the work you did added to the final value of the house. To be fair to your sister, you are the one who is and will be benefiting directly from some of the extra work, even if it did not add value. Whether that can be split with her is a thorny issue.
As the flat is not yet finished, I suggest you go for some form of mediation, unless you can both settle it between yourselves. My gut feeling is that if you left it and let it drag on, it will be even messier. It may be better to sell now and try again, this time on your own with your partner (note you may need some agreement with her too).
In the case of joint ownership the sale amount can be divided among the parties .If you would like to establish a case in your favour get the advice of an attorney for arguement in your favour.
Can you and your partner afford a £75k mortgage?Interest only would be ideal for affordability.At the figures you have given,after estate agents fees,repayment of mortgage,solicitors fees there would be very little left to share anyway.As it is only just over a year since you bought,£34k in a 5% interest savings account would have yielded your sister under £2k in interest.Therefore,I think iff you were to offer her £4k plus her original stake of £34k,as a final payment,she has done well and you do’nt have to move out and can continue to enjoy the fruits of your labours.