tenants-in-common - experience?

Carry · 26-08-2014 11:24am #1

I'm not looking for legal advice, I'll do that with a solicitor if needed.

I'm looking for a pointer to a website* which might explain the situation and/or experiences of other boardsies as tenants in common.

If this is still legally too wobbly for this forum, please just delete this post. I've never posted in this forum before so don't know where mods actually draw the line.

Question(s):
What is the situation if one tenant in common didn't pay their part of the mortgage (and repairs, insurance etc.) for, say, ten years? Do they still have a claim of half the property (as determined in the deeds)?

Is it true that in a case as above the legal situation is such that the owner who paid all expenses regarding the property can claim a share of the property in proportion of their payments?

*I searched the net myself but didn't find anything enlightening.

littlemac1980 · 26-08-2014 11:50am

It's a very complicated situation which would require full knowledge of all the facts to give any sort of useful answer. Unfortunately despite the fact you are just looking for general info, it really isn't the type of situation where that's possible.

There are likely legal issues which would requiring detailed analysis based on the facts in relation to Equitable interests, constructive trusts, adverse possession, proprietry estoppel, possibly presumptions of advancement, family law issues possibly, and many more depending on what actually occurred and the relationship between the parties throughout.

If there's a serious issue which needs to be addressed, I personally don't see any way it could be effectively dealt with without the services of a legal professional.

Carry · 26-08-2014 12:24pm

Thank you for your answer.
I'm aware that I eventually will need proper legal advice.

I didn't post too many details, tried to keep the situation rather generic (because of the forum charter and because of privacy).

Just that much: It's about two friends (not related), one lives abroad, never lived in the house but wanted some sort of investment and a holiday home (which was hardly ever used as such). The other lives in the house permanently, considers it as home and paid everything, apart from the initial deposit which was paid by the one abroad.

Probably still too generic but maybe someone had a similar experience and can tell me how they dealt with it?

Peregrinus · 26-08-2014 3:27pm

Look, a lot is going to depend on the agreement between the two of them. Normally when people buy a house as tenants in common, the purchase deed says that they hold in equal shares, or 60/40, or whatever, and then the purchase price, mortgage payments, rates and charges etc are apportioned in the same shares. Lets say that the two people you mention are 50/50 tenants in common. Did the deposit paid by the one abroad represent 50% of the value of the property? If not, was there an expectation that the one abroad would also contribute to mortgage repayments, etc so as to bring their total contribution to the acquisition of the property to 50%? If yes, what happened when they failed to pay the expected share? If no, what on earth was the second tenant thinking when they entered into this deal?

Carry · 26-08-2014 4:14pm

I'm trying to be more specific.

Peregrinus wrote: »

Look, a lot is going to depend on the agreement between the two of them. Normally when people buy a house as tenants in common, the purchase deed says that they hold in equal shares, or 60/40, or whatever, and then the purchase price, mortgage payments, rates and charges etc are apportioned in the same shares.
Lets say that the two people you mention are 50/50 tenants in common. Did the deposit paid by the one abroad represent 50% of the value of the property?

It's 50/50 tenants in common. The person abroad paid the requisite 10% deposit for the mortgage.

Peregrinus wrote: »

If not, was there an expectation that the one abroad would also contribute to mortgage repayments, etc so as to bring their total contribution to the acquisition of the property to 50%?

The agreement was that the person in the house is going to pay the mortgage in full until they are on the same level in payments. That is, person home pays as much monthly mortgage instalments until the same amount as person abroad paid for the deposit is reached. Which was done after two years.

Peregrinus wrote: »

If yes, what happened when they failed to pay the expected share?

A big fall-out

. Person abroad wanted to sell the house (at the height of the property boom) to make a tidy profit (not because they needed money). Person home refused, because it's their home and wasn't interested in profits. Person abroad refused to pay their agreed part and was never heard again (for about 10 years). Person home continued to pay the full amount, happy to keep their home, if struggling to pay mortgage and everything else. The suggestion of a solicitor to sue for payment was dismissed by person home as too much hassle.

Peregrinus wrote: »

If no, what on earth was the second tenant thinking when they entered into this deal?

If you mean person home, they were trusting. Believing in friendship and agreements. They know better now.

littlemac1980 · 26-08-2014 4:21pm

What was the arrangement re Rent/Bills/Insurance/Property Tax etc.?

It's not something that you could hope to get any clarity on here without (I believe) breaking the charter, and in the end you're gonna need a solicitor regardless, and probably an accountant too.

There's potentially a lot at stake and the sooner you get proper advice - the sooner you will be on the way to getting it properly sorted out. :-)

Valentine1 · 26-08-2014 8:18pm

If people are co owners as tenants in common, unless the deeds state otherwise they both own 50% regardless of how payments are made or were agreed. Any variation to that would require the parties to reach another agreement and execute another deed to that effect. if that can't be done it would be most likely that a trip to the High Court would be required

Carry · 26-08-2014 9:29pm

Thanks to all, though I still hope that there are people out there who would share their own experiences. PMs welcome.

I searched the net and found very contradictory opinions and a lot of legalese which is not very clear about the subject. But then it's legalese ...

The situation is not that dire, though. Not yet. I was hoping to have some legal ammunition which would not only avoid a possible court case but could help to solve the situation in a more or less friendly way.
If that is not possible I just have to find a sharp solicitor.

Peregrinus · 27-08-2014 2:26am

Yup, get a lawyer. This can probably be resolved without going to court, unless one of the co-owners is insanely angry about the whole thing, but a lawyer can help you think your way throught the issues and nut out a reasonable solution.

At the point where owner B had paid as much of the mortgage as owner A paid for the deposit, they owned their interest in the house in equal shares and had contributed equally towards it. Start from that point. To pick figures out of the air, let's say that at that point the mortgage had been reduced to 80% of the value of the house, so A and B between them had an equity of 20% in the house.

At that point owner A wanted to sell and owner B wouldn't agree. In general, in a tenancy-in-common, if one tenant wants out either the entire property is sold or the other tenants(s) buy them out at market value. Neither of these things happened and owner A probably feels pissed about that. Plus, he wanted to sell at the height of the boom, which is of course the best time to sell, and he probably feels even more pissed that that opportunity was missed. On the other hand, he didn't press the issue at the time, which he should have done.

Owner B can argue that he has contributed more to the purchase of the house since that time, and the additional stake in the house which has been acquired by paying off the mortgage should belong to him. Let's say that by now the mortgage has been reduced to 55%, so the equity has risen from 20% to 45%. Owner B will argue that the extra 25% should belong to him, because he paid for it, and Owner A's legal claim to half of it, 12.5%, should be treated as being held in trust for him. So, he will say, the Bank owns 55% of this house, Owner A owns 10% and Owner B owns 35%.

Owner A will say no, we are 50/50 owners, our equity in the house is 45%, that's 22.5% for you and 22.5% for me. You have paid my share of the mortgage for a number of years; I owe you that; but it doesn't mean that you have bought my share of the house from me. Plus, of course, you have had the sole use of the house, paying no rent to me for my share. We need to adjust for that too.

Those are the parameters within which the dispute must be resolved. Owner A will offer 10% of the value of the house to owner B; Owner B will look for 22.5%, less the cash value of his share of the mortgage payments actually paid by owner A, plus the half the rental value of the house. Do the sums and then start negotiating.

Carry · 27-08-2014 9:54am

Thank you, that's a good approach. I hope the other owner sees it that way, too.

hillviewfarm · 03-09-2014 8:14pm

Looking for advice with regard to tenants in common. Party b died and left their share of the property to others. A year or twos before party b died, they asked to be let out of the tenants in common agreement, party A said that they would agree if got back the money that they had put into the property. Party B would never pay any money towards the house as they said that the house would belong to party A. Where does party A stand now? Any advice would be appreciated.

tenants-in-common - experience?

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