Shared mortgage.... I want out...

whereto now

Hi I've got a complicated situation that I'd like to get out of so I'd really appreciate any qualified advice.
Myself and a family member bought a house together in 2007, it was an investment towards our retirement. The construction of the house was delayed and by the time we got the keys the recession had hit so we were stuck with it
The bank KBC has been very good and we signed a 5 year agreement whereby we pay the interest and a little of the loan each month. I think we are 2 years into this. The house is rented and the rent covers the mortgage and insurance etc.
The problem is that myself and this family member have parted ways and there is little chance of reconciliation. The house is probably worth 70,000 less than we paid for it at the moment.
I would like to try and do a deal with the bank but without the other person in agreement what can I do ?
Is it possible to transfer share of the house to the other person if they agreed and would the bank approve ?
I honestly just want to get this house out of my life, I don't expect to walk away from the debt but I have no idea what my rights are when there is a second person involved.
I have no communication with my relation so any communication would be through a solicitor so I know I will have to engage a solicitor but I'd like to have an idea of my options before I take that step.
I don't want to get into a discussion on the merits of buying property as an investment so I'd appreciate if your replies stick to the topic.
This situation is causing me a lot of stress and so I really appreciate any advice .... Thanks

Steve

Presumably you signed a contract with the other person regarding the shared ownership?

You need to have a solicitor read this and they will advise you of what your options are.

whereto now

Steve wrote: »

Presumably you signed a contract with the other person regarding the shared ownership?

You need to have a solicitor read this and they will advise you of what your options are.

No there was no contract involved... stupid in hindsight but you live n learn.....

artanevilla

Is there another family member or mutual friend who can act as a go between?

Lockedout2

What is the house worth?
What is the mortgage?
What's the rent?
How much is the proper repayments?
How much is the tax?

Is the house appreciating in value?

Not a great position but can you hold out for 5 years? To get the negative equity down?

Will the other party walk away for their share of the debt?

whereto now

artanevilla wrote: »

Is there another family member or mutual friend who can act as a go between?

I don't wantt to involve a family member or friend I think it'd be best to have an outsider......

NewApproach

I don't see why the other family member would be willing to take over 100% of the loan, especially where there is negative equity.

I would assume the easiest approach to this is to get bank agreement to sell the property and you each stump up your portion of the deficit from your existing cash, but this would require the agreement of both the other party and the bank.

Alternatively, you could explore if the other party is willing to buyout your share and you pay 50% of the difference to the bank, but again that would require the agreement of both.

whereto now

Lockedout2 wrote: »

What is the house worth?
What is the mortgage?
What's the rent?
How much is the proper repayments?
How much is the tax?

Is the house appreciating in value?

Not a great position but can you hold out for 5 years? To get the negative equity down?

Will the other party walk away for their share of the debt?

Hi the house is appreciating in value slowly. I don't want to wait 3 years if I can get out earlier as I'm trying to buy my own home and cannot get a mortgage because of this house.
I am not in a position to buy the other person out, I think that's what your last question referred to.
I would be quite happy to sign my share over to the other person and walk away if that was an option, life's too short, but I don't think the bank would agree !!!

whereto now

I would be happy to sell the house and be left with 50% of the remaining debt but if the other person doesn't want to sell is there anything I can do ?

sword1

How do you expect to buy your own home if you are carrying debt from that house

whereto now

sword1 wrote: »

How do you expect to buy your own home if you are carrying debt from that house

Thanks that's a big help 😉

Mrs OBumble

whereto now wrote: »

I would be happy to sell the house and be left with 50% of the remaining debt but if the other person doesn't want to sell is there anything I can do ?

No.

Nothing legal, anyways.

The only possibly I can come up with if for you to find someone to sell your 50% share to. I'm pretty sure that the buyer would have to be acceptable to your relative. But they may be more open to it than just being asked to take the pain of buying you out themself.

sword1

whereto now wrote: »

Thanks that's a big help 😉

It is meant to be help ,you are saying you want to sell an appreciating asset to get your own home, from what you are saying selling now will only delay the possibility of getting your own home as you will have debt without the rent to pay it

BetsyEllen

whereto now wrote: »

Thanks that's a big help 😉

I think it's a sensible question though; you want to sell the house so you can get a mortgage on a new property.

But how will you do that with debt from the old house hanging over you?

I didn't take the posters questions as being smart, I thought it was a good point to make.

whereto now

BetsyEllen wrote: »

I think it's a sensible question though; you want to sell the house so you can get a mortgage on a new property.

But how will you do that with debt from the old house hanging over you?

I didn't take the posters questions as being smart, I thought it was a good point to make.

The plan is to clear that debt asap and then look for a mortgage.... it's a long term plan.. not going to happen overnight but I'm trying to look into my options.

Steve

whereto now wrote: »

No there was no contract involved... stupid in hindsight but you live n learn.....

I'm finding that hard to believe, was it even suggested to you by the solicitor who bought for you? Any shared ownership has to at least deal with the event of the death of a partner.

The bank would normally insist on it, although you said it was KBC so they are a bit more 'lienient'.

In theory, you can sell, it's yours, but that may mean forcing the other partner to agree. If there is no contract, and therefore no agreed get out clause then it will have to go to court and a judge will decide. This will cost you a lot.

My advice remains, contact a solicitor, preferably one with experience clearing up conveyancing messes like this.

barman linen

If it is at all possible I would secure your personal mortgage before doing anything with the first house. If you try to force a sale or convince the bank to short sell it you will take a hit to your credit history that could take you years to recover from. That will certainly prevent you getting your own mortgage.

If the first house is washing its face and the mortgage is being paid monthly you can easily present this to a bank as a self funding commercial deal. It should not immediately exclude you from a new mortgage if you already have this one.

Getting the requisite 20%/deposit together may be your issue but that is a constant since you are not going to get any equity out of the first house anyhow.

If you can get 20% together then get the second mortgage and deal with the problem house afterwards.

My 2p.

whereto now

Steve wrote: »

I'm finding that hard to believe, was it even suggested to you by the solicitor who bought for you? Any shared ownership has to at least deal with the event of the death of a partner.

The bank would normally insist on it, although you said it was KBC so they are a bit more 'lienient'.

In theory, you can sell, it's yours, but that may mean forcing the other partner to agree. If there is no contract, and therefore no agreed get out clause then it will have to go to court and a judge will decide. This will cost you a lot.

My advice remains, contact a solicitor, preferably one with experience clearing up conveyancing messes like this.

A contract was never mentioned by the solicitor or the bank. So it looks like I'll be going to court. Thanks for the advice.

Steve

whereto now wrote: »

So it looks like I'll be going to court.

Or you negotiate through your solicitor contacting their solicitor... or use a mediator.. court is the last thing you want from a cost perspective.

Lockedout2

Steve wrote: »

I'm finding that hard to believe, was it even suggested to you by the solicitor who bought for you? Any shared ownership has to at least deal with the event of the death of a partner.

I'm not at all surprised in 2007 the banks did not care, in some cases they did not get the security sorted properly.

Death is dealt with by the nature of tenancy joint tenants v tenants in common with a life policy to cover the death of either party but in 2007 they might not have required this.

OP you could possibly force the issue by cancelling the direct debit for the loan repayment nullifying the current agreement therefore pushing the loan to capital and interest which you can't honour.

Be careful if the other party is cash rich and there is bad blood between you they could take up the slack and leave you on no mans land.

Is mediation an option? Is it a sibling or parent?

Fian

I am assuming that you have a joint mortgage and that (as is standard) you are jointly and severally liable for the total debt.

Even if you managed to persuade the other party to take over the mortgage it is very unlikely (read as - not going to happen) that the bank would release you from the joint mortgage. You are both jointly and severally liable for the whole debt, which means the bank can pursue either or both of you for the total debt. The bank will not release either of you from that until the debt is repaid, or at least not without sufficient compensation which realistically is unlikely to be viable from your point of view.

They won't do that because they would reduce their security on the loan if they did. If one of you dies/becomes unemployed/receives a windfall etc. they will want to have the benefit of the joint and several liability.

So you are unlikely to be able to arrange a solution to this between yourself and the other party, even if you could arrive at a solution that you both found agreeable.

Sorry.

whereto now

Lockedout2 wrote: »

I'm not at all surprised in 2007 the banks did not care, in some cases they did not get the security sorted properly.

Death is dealt with by the nature of tenancy joint tenants v tenants in common with a life policy to cover the death of either party but in 2007 they might not have required this.

OP you could possibly force the issue by cancelling the direct debit for the loan repayment nullifying the current agreement therefore pushing the loan to capital and interest which you can't honour.

Be careful if the other party is cash rich and there is bad blood between you they could take up the slack and leave you on no mans land.

Is mediation an option? Is it a sibling or parent?

The other party is a sibling who wouldn't be in a position to take up the slack to my knowledge. I think mediation is the only option. Thanks for your advice.

lifeandtimes

I know from exoeri7if both your houses are on the mortgage then the bank don't care where the monies coming from as long as it gets there but this means that if you want out then you both have to sell,of not then the house needs to be remortgaged to have everything your sibling name only and they may not be approved. Though I belive you can push for a sale if no children are involved

Very tough situation but if your sibling is not agreeable to buy you out then the only option is sell or put up...

sword1

whereto now wrote: »

The other party is a sibling who wouldn't be in a position to take up the slack to my knowledge. I think mediation is the only option. Thanks for your advice.

Depends what is most important to you, if you force the sale of the house you will more than likely be finishing any chance of getting a mortgage short-term ,the banks will see it as a black mark against you. If your sibling is unable to pay their half of any outstanding debt you will have to pay that also. Falling out with family is stressfull but if you take the emotions out of it and take a step back your best chance of getting your home is to save away and not waste time and money on solicitors who will be the only winners in the end

4ensic15

It would be impossible to force the sale of the house without redeeming the mortgage. there would need to be sufficient money available to clear the negative equity and pay costs of sale. If that is not available there is no point in going to court. Unless the bank and the other party consent to the house being sold and both owners remain jointly liable for the negative equity then there is no possibility of anything happening. Be happy that rents are rising and interest rates are low.

Lockedout2

sword1 wrote: »

Depends what is most important to you, if you force the sale of the house you will more than likely be finishing any chance of getting a mortgage short-term ,the banks will see it as a black mark against you. If your sibling is unable to pay their half of any outstanding debt you will have to pay that also. Falling out with family is stressfull but if you take the emotions out of it and take a step back your best chance of getting your home is to save away and not waste time and money on solicitors who will be the only winners in the end

If the OP wants out and the conclusion is selling as long as the debt is discharged there will be no black mark against him.

As you correctly point out if the other party won't pay his 1/2 then the OP will otherwise he won't get a loan himself.

nuac

Mod

It is a complicated situation,
You should get advice from an experienced solicitor, but as family is involved think mediation rather than litigation.
imho discussion of this problem contravenes the rule here against legal advice so am closing thread,

nuac

whereto now wrote: »

Thanks that's a big help 😉

Mod.
Sword1 raised a reasonable point. No need to be sharp with him/her

Avatar MIA

There are two hurdles as I see it to getting away from the property.

First your relation, and second the bank.

If you can come up with €35k and can pay this to your relation he may take full ownership.

The bank then need to be happy that your relation can afford the full mortgage repayment.