Settlement Agreement on Property

darcey78

Hi, this is probably a common discussion but would appreciate feedback from anyone with a legal background / knowledge.

Ex and I own a property which is pays 7% towards the mortgage per annum. only contributes to his life insurance, 50% on Property Tax & Management Fees.

I am looking to get a settlement agreement legalised with a solicitor as we had an interim agreement up until 2014 of 50% ownership. Whilst I have no problem on % of ownership of the property, the contributions would need to reflect that. I live in the property and have paid Capital + Interest for more than 2 years now.

Questions:

1. Can he force me to move out of the property? ie are there laws protecting me as I have lived there and also paid the mortgage in full?
2. whilst I cant transfer the property solely to my name as I will not qualify for the mortgage, what are my rights and what should I really be looking for?

sorry the above might be fairly vague, but im starting on a blank canvas here and would like to know what are my limitations whilst looking for what is fair.

Thank you.

dudara

Not a Consumer Issue, so moved to Accommodation & Property. Apologies mods if this isn't the right spot.

dudara

athtrasna

Legal advice cannot be given on boards and that's what you really need OP

darcey78

Even if its not specific legal advise, are there any thoughts on this?

MarkAnthony

darcey78 wrote: »

Even if its not specific legal advise, are there any thoughts on this?

The thread is not ideally phrased to be honest, there's at least one grammatical error which is making hard enough to read. Either that or I'm just being thick which is a possibility.

From what I can gather you're paying 50% of the mortgage, ex is paying 7%. You're living there ex is not. I wouldn't expect ex to pay the full 50% tbh. I've tenants that pay 100% of my mortgage, they won't be getting any ownership at the end! :pac:

My advise would be to liquidate and go your separate ways.

Anything other than that you'll need to speak to a solicitor.

darcey78

Hi Mark,

Apologies. Just to be clear, I pay 100% of the mortgage. He contributes €200 a month which covers his life insurance & mgnt fees. The surplus is the 7% paid into the mortgage which is less than €30 per month. I guess tenants vs home owners arent quite the same comparison.

Butters1979

Is his name on the mortgage? Did you get the mortgage together. AFAIK if two names are on the mortgage it doesn't matter how much % either pays, it's joint ownership.
If you want to change this you need to go through a solicitor and possibly the courts.
Are you sure you can't transfer the property to your name as you won't qualify for the mortgage? You are already paying 100%.
When you say 'ex' what exactly does that mean? Were you married or common law or not?

darcey78

Hi Butters1979,

Answers to your questions:

His name is on the mortgage
Ex - we were not married. the mortgage amount (current o/s amount) is too high to be transferred to a sole name.

my main point is to look for what is fair i.e. he currently pays almost NOTHING towards the mortgage but has 50% ownership.

I probably do need to address all these qs with a Solicitor.

Butters1979

What's fair can be subjective.

I assume he didn't always pay nothing into the mortgage and at one stage was paying 50%? For me what's fair is how much of the overall deposit and repayable mortgage he has paid up to now.

For example on a 30 year mortgage. 10% deposit.

If he paid half the deposit then he would own 5% for the deposit

and for 10 years he was paying 50% of the mortgage,
10 years is 1/3 of the 30 year mortgage. The mortgage is worth 90% of the house. 10 years is worth 30%, of which he owns half.
That's 15%.

This gives 20% total for him and the rest for you.

Again this is the way I would see it, try working that out with your particulars and see if he agrees.

MarkAnthony

darcey78 wrote: »

Hi Mark,

Apologies. Just to be clear, I pay 100% of the mortgage. He contributes €200 a month which covers his life insurance & mgnt fees. The surplus is the 7% paid into the mortgage which is less than €30 per month. I guess tenants vs home owners arent quite the same comparison.

Well I'd take the management fees out of the equation if he's not living there to be fair. I understand where you're coming from in relation to tenants vs home owners but really you're both. On the one hand you're the owner on the other hand you're (like) the tenant of the other owner now as you have sole possession of the property. It's not a 50/50 split as you have full beneficial ownership and ex has none.

darcey78

Butters1979: Thank you for the insightful piece of information and has helped me look at things very differently. I am in the process of gathering information on the mortgage lifecycle ie drawdown date, vs outstanding amount each year etc. Step by step I suppose.

MarkAnthony: thank you for your email. I think we do look at the outcomes very differently which I respect.

Uno my Uno.

You need to see a solicitor straight away so you can asses your options and resolve this issue. It will have to be done with the agreement of your ex, only you can know if that will be forthcoming or not.

Colser

What does your ex want to do Darcey? Would mediation work in this situation or have you asked him?

darcey78

I engaged a mediator on 1st Dec 2010. A settlement agreement was put in place from Apr 2012 till Apr 2014 which drew down a short term agreement. Thats now ended. I have no issue with him claiming % of ownership, but needs to reflect a pay contribution on the mortgage. Thats the part that needs to be discussed going forward and documented with a solicitor

Colser

darcey78 wrote: »

I engaged a mediator on 1st Dec 2010. A settlement agreement was put in place from Apr 2012 till Apr 2014 which drew down a short term agreement. Thats now ended. I have no issue with him claiming % of ownership, but needs to reflect a pay contribution on the mortgage. Thats the part that needs to be discussed going forward and documented with a solicitor

Would selling be an option and putting an end to the situation as hes going to say that even though you are paying you are also living there so why should he pay? Would a sale cover the remaining mortgage ?

darcey78

Unfortunately not as its in massive negative equity. Ive looked at all options. Im paying capital & interest on the mortgage with no arrears. Its a matter of looking at my % of ownership. I mean i do maintain the property too. Yes one can argue that i own it, but the term tenant and owner i feel cant be tailored to suit financial convenience.

Colser

would your ex be willing to discuss it and then approach solicitors to just rubber stamp it or is he happy to let things carry on as they are?

Is there an option to go to mediation for a second time or is that a one off option?

BTW Im not saying you own it all and that would be the bit that needs to be thrashed out..Can he say that if there was another tenant in there that he wouldnt need to be paying anyway so he is still co-owner?

darcey78

Hi Colser, thank you for your responses and all these questions which is off great help.

The interim settlement agreement was achieved through a lot of mediation and at the time, given my job situation and other personal circumstances, a short term solution was put in place.

The next steps will be mediated and then rubber stamped by a solicitor once an agreement has been achieved. To answer your question:

I don't know if he can force me to take on a tenant (as we had pets together and they now live with me) and also I don't know if he can actually force me to move out and rent out the property? Both of the options will result in tax implications and changes to the tracker mortgage as it will no longer be categorised as owner-occupied property.

I might just be making a mountain out of a molehill here as ive been furnishing the mortgage since 2011 on my own, clearly I have a strong case defending me?

Colser

Sorry to ask the same question again but what does he want to do about the house..would he prefer to sell up,you move out and rent to stranger or let things run(if he had a choice)?

I think whats bothering you is that you would be happy to carry on but want your % of the house legally agreed but I think it may be a 50/50 regardless of what you are paying because you live there. Is he renting elsewhere?

I see where youre coming from btw.

darcey78

Hi Colser, he is married and living with his partner. Not sure if its a rented property or owned by either party.

He will not want to sell as we will be liable for the negative equity circa €100k.

He will not want to pay as his argument is that i live there.

I cant take over the mortgage at present as its too high.

I guess to transfer thenproperty to me, he will look for a pay out. Also he might force me to rent a room and/or move out and rent the property our.

Paul_Mc1988

darcey78 wrote: »

Hi Colser, he is married and living with his partner. Not sure if its a rented property or owned by either party.

He will not want to sell as we will be liable for the negative equity circa €100k.

He will not want to pay as his argument is that i live there.

I cant take over the mortgage at present as its too high.

I guess to transfer thenproperty to me, he will look for a pay out. Also he might force me to rent a room and/or move out and rent the property our.

You are getting to live in the house which is obviously an agreement the two of you have came to and if he has to rent another place he is paying for something he will never own while you are living in a place that both of you initially paid for.

My point is if the shoe was on the other foot how would you perceive it. In my eyes there are three options.

1. Continue on with the current arrangement
2. Rent out the place (This would be my choice)
3. Sell the property and take the hit on the negative equity.

At least with choice two you can try obtain a place on your own with out any hindrances.

the_syco

Say you do pay off the mortgage; he'll still be on the mortgage, and will probably see you buying him out as a "nest egg"; problem now, or problem then. IMO, it'd be easier sorting the problem out now.

If he wants a handout to take his name off the deed, check how much you'll both have to pay off if the house gets auctioned off by the bank?

MarkAnthony

Renting out is the fairest way to resolve this. That way you both have the same benefits or losses on the property. This, however will result in a significant tax burden. If nothing else this could be used as the basis for calculating his payment.

As I've said, I have indicated I have to side somewhat white the OP's ex here as living in the property is a massive benefit falling on one side only.

Debating it here is all well and good but until an accountant and solicitor get involved, which will happen eventually and less amicably anyway, nothing is going to be resolved. So other than being a mildly interesting topic for discussion on boards this thread is pointless.

antoinolachtnai

You need to get a grip of the financial fundamentals here.

If it is in negative equity neither of you own anything. What you have is a debt together.

He needs to shoulder his fair share of the debt.

If he wants to walk away and get free of the situation he will need to pay you money, not the opposite.

It is obviously true that you have the benefit of living in the house whilst he has to rent somewhere. the value of the benefit you have can be quantified.

You really need to go through the figures with someone experienced. My feeling is that your ex is underpaying but I don't really know. It depends on the exact figures.

A quick reckoner of what each of you should be paying is

Total monthly cost = mortgage related insurance + service charge + maintenance + mortgage payment + property tax

You should be paying market rent + half of (total monthly cost - market rent)

He should be paying the rest.

At the end when the bank is paid off if you follow that you should own 50 percent of the equity each.

It is very likely that he will pay less and end up with less than 50 percent of the equity. There needs to be a calculation to determine how much equity he will have.

If you agree on some formula like this you might find that as market rents go up you end up paying him money. You might want to agree that this money goes towards paying off the debt faster.

You might want to crystallize the negative equity. That would mean that you could agree a fixed payment that he would make towards the mortgage going forward.

You really need to talk to the accountant.

darcey78

Thank you Paul_Mc1988 and Antoinolachtnai. I certainly do feel now that I have better standings against this. Totally agree with you as in yes I live in the property - which was not an amicable decision. the other party basically washed his hands off a financial commitment. I dont find liquidating and ending up with a debt and no roof over my head as an option and with the possibility that I will never get a mortgage hereon either. not when I have been furnishing the mortgage 100% for the past 3 years on my own (paying capital + interest) with no arrears. I have engaged a solicitor and a mediator and will be positioning my options with them. like I said, I have no problem if he wants to claim a certain % of ownership towards the property. what I have a problem is him paying nothing and has a claim Just because he is the co-owner. I strongly feel a lot of people are in similar situations to myself and the other party uses the term 'Tenant' and 'Owner' to according to their convenience.

irelandrover

darcey78 wrote: »

Thank you Paul_Mc1988 and Antoinolachtnai. I certainly do feel now that I have better standings against this. Totally agree with you as in yes I live in the property - which was not an amicable decision. the other party basically washed his hands off a financial commitment. I dont find liquidating and ending up with a debt and no roof over my head as an option and with the possibility that I will never get a mortgage hereon either. not when I have been furnishing the mortgage 100% for the past 3 years on my own (paying capital + interest) with no arrears. I have engaged a solicitor and a mediator and will be positioning my options with them. like I said, I have no problem if he wants to claim a certain % of ownership towards the property. what I have a problem is him paying nothing and has a claim Just because he is the co-owner. I strongly feel a lot of people are in similar situations to myself and the other party uses the term 'Tenant' and 'Owner' to according to their convenience.

If the house was rented out would it cover the cost or mortgage plus running costs?

darcey78

No it wouldnt cover the running cost.

Aka Ishur

antoinolachtnai - has summarised perfectly what the arrangement should be. You need to ignore what you have been paying in the past as in the larger scheme the difference between that and what you should have paid is a small amount.

Total monthly cost = mortgage related insurance + service charge + maintenance + mortgage payment + property tax

You should be paying market rent + half of (total monthly cost - market rent)

He should be paying the rest.

darcey78

Thank you all. Ive started my ground work and fingers crossed the outcome is amicable and fair to both parties.

antoinolachtnai

Aka Ishur wrote: »

antoinolachtnai - has summarised perfectly what the arrangement should be. You need to ignore what you have been paying in the past as in the larger scheme the difference between that and what you should have paid is a small amount.

I wouldn't forget about the past completely. The fact that he has paid less than his share should be taken into account in calculating what share of the property he will ultimately own. I wouldn't say he is even paying his half of the interest, so why should he have any share in the eventual property. But you need to get all this down on a spreadsheet and get some help working it out if needed.