How to go about buying an ex out of my house (parents gifted site for property to me)

Maryser

Hello, am looking for advice. Am trying to buy my ex out of our house. The house has gone up in value but the house is built on land my parents gave us. Will that mean I have to pay less? I am trying to get the €300 together to see a solicitor (that's what the good ones cost it seems!) so am gathering as much info as I can. Any help would be appreciated.

Snotty

Definitely good to get legal advice first. The amount you will have to pay is depending on what you can agree with your ex. Original purchase cost, outstanding debt and current value will all effect this, but there isn't an obligation for your ex to accept any deal, so the land being gifted by your parents is irrelevant if it's now in you and your exs name.
Normally an agreement can be reach as the mortgage is a liability to your ex and they may be willing to lose any profit from the houses rise in value just to get away from it without losing any money.

ted1

To find the value Generally you stick it in the market and find out what someone is willing to pay.

As regards how much to pay. It all depends on things like were you married or how long you’ve been living together , is their kids etc

Askthe EA

I think having kids or not is the biggest question you need to answer.

standardg60

You really need to speak to your ex first, assuming you're not married. Are they agreeable to you buying them out?

The obvious calculation is current market value-outstanding mortgage divided by two. The site being gifted is irrelevant.

You then need to ascertain whether your mortgage holder is agreeable to placing the mortgage in your name only. They may not be.

Askthe EA

standardg60 wrote: »

You really need to speak to your ex first, assuming you're not married. Are they agreeable to you buying them out?

The obvious calculation is current market value-outstanding mortgage divided by two. The site being gifted is irrelevant.

You then need to ascertain whether your mortgage holder is agreeable to placing the mortgage in your name only. They may not be.

Why is the site value irrelevant?

standardg60

Askthe EA wrote: »

Why is the site value irrelevant?

I clearly didn't say that.

Squatter

Askthe EA wrote: »

Why is the site value irrelevant?

It may be relevant to other things, but it's irrelevant to the market price of the house!

Glass fused light

Askthe EA wrote: »

Why is the site value irrelevant?

It is relevant if the site was only gifted to the OP. if the OP and ex planned to marry or are married the ex could argue that the actual transaction was to both and the legal form was tax avoidance. if the OP and parents took proper advice the parents would have legally transferred the site to their child but the intent would be that the site and land as a whole would be owned by both.
The market value of the site without planning and zoning could be low and at the time they would have looked to minimise tax.

The base calculation of 50% of current market value less mortgage may be the ex's buyout price or they may want to buy the OP out. Irrespective of marital status if the ex is not willing to be bought out, and as the OP is looking for a good solicitor it's probably safe to assume that they are not, it's likely that the OP could end up in court. The courts look at the current situation re childern and the financial dependency of each party not just the source of funding for the house.

standardg60

I doubt very much a mortgage provider would have sanctioned a mortgage to two parties on a site which was owned by one. The site would have been conveyed to both in the course of the application. That's why the op's assertion that it was gifted to them alone is irrelevant, they may feel that way but that's life.

Glass fused light

standardg60 wrote: »

I doubt very much a mortgage provider would have sanctioned a mortgage to two parties on a site which was owned by one. The site would have been conveyed to both in the course of the application. That's why the op's assertion that it was gifted to them alone is irrelevant, they may feel that way but that's life.

Yes they will sanction a mortgage, the two parties to the contract each owe 100% of the money back to the bank. It's no different that a guarantee agreement. The bank just have the assurance that before the first drawdown one party has a site with planning available for sale should the bank need to to call in the loan. Overall the bank will only loan the build cost as the site is already available. Plus the couple would have to front their portion of the build cost before the bank pays out the stage payments so the bank should have a better LTV than a conventional purchase.

standardg60

Glass fused light wrote: »

Yes they will sanction a mortgage, the two parties to the contract each owe 100% of the money back to the bank. It's no different that a guarantee agreement. The bank just have the assurance that before the first drawdown one party has a site with planning available for sale should the bank need to to call in the loan. Overall the bank will only loan the build cost as the site is already available. Plus the couple would have to front their portion of the build cost before the bank pays out the stage payments so the bank should have a better LTV than a conventional purchase.

So what's to stop the op declaring 'get off my site' if it's not in both their names?

I did the exact same thing as the op except the site was donated by my ex's parents, once we applied to build the site was transferred to both of us at the same time. The origination of the site was legally irrelevant when we split.

Askthe EA

Glass fused light wrote: »

It is relevant if the site was only gifted to the OP. if the OP and ex planned to marry or are married the ex could argue that the actual transaction was to both and the legal form was tax avoidance. if the OP and parents took proper advice the parents would have legally transferred the site to their child but the intent would be that the site and land as a whole would be owned by both.
The market value of the site without planning and zoning could be low and at the time they would have looked to minimise tax.

The base calculation of 50% of current market value less mortgage may be the ex's buyout price or they may want to buy the OP out. Irrespective of marital status if the ex is not willing to be bought out, and as the OP is looking for a good solicitor it's probably safe to assume that they are not, it's likely that the OP could end up in court. The courts look at the current situation re childern and the financial dependency of each party not just the source of funding for the house.

Exactly

antoinolachtnai

Squatter wrote: »

It may be relevant to other things, but it's irrelevant to the market price of the house!

Going to a solicitor is good advice. In the meantime, try to figure out two things:

A. Your partner’s approximate contribution to the construction and fitout of house.

B. The value of the house today. Try and work this out, even approximately by looking at listings and the property price register for your area.

The amount you will have to pay your partner to buy you out will be somewhere between A and half of B.

It is hard to say where it will fall on that spectrum but it will be in that region. Ultimately you will have to negotiate to decide what is fair taking into account all the circumstances.

AmberGold

A friend is gifting half his small site to daughter & future husband for a similar project. Having read this I don’t know if I’d be as generous.

JustAThought

OP very sorry to hear about the end of your relationship and the sutuation you find yourself in. Have you considered making an appointment to see the free legal aid people?They are always very helpful. There are a fair few of them around and you dont have to luve in the area (or county!) Of the one you visit. If you ring the HQ and ask if they know if there is someone who specialises in division of assets specifically your sityation re land donation they might be able to recommend an area clinic/office and night whwre you can make an appointment and ask in confidence. Best of luck

standardg60

Askthe EA wrote: »

Exactly

This is exactly what I said in the first place.

Any competent judge will come to the same conclusion.

Arguing the toss in terms of levels of contribution ect. will cost way more in legal fees than any amicable solution.

Op talk to your ex, calculate what you owe them regardless of where the site came from, learn and move on.

Subtle

Ok, I'm genuinely asking out of curiosity or perhaps ignorance, but how would the OP possibly be able to buy out the ex if getting 300 quid together is proving tough? Obviously I'm missing something??

Edit: Aha... House sells for 300k, bank owed 200k, so 50k windfall each. OP gives their 50k to ex, happy days, no mortgage.

jlm29

standardg60 wrote: »

I doubt very much a mortgage provider would have sanctioned a mortgage to two parties on a site which was owned by one. The site would have been conveyed to both in the course of the application. That's why the op's assertion that it was gifted to them alone is irrelevant, they may feel that way but that's life.

The bank would absolutely lend to two individuals where only one owned the site. I know of several cases where they’ve done this. In the most recent case I’ve heard of, the bank requested a letter from an accountant to say that the party who didn’t own the property had sought independent financial advice, and were aware of the implications etc etc.
Transferring the site into joint names would cost a bomb in terms of tax and stamp duty if the couple aren’t married, so i would say that in the vast majority of cases where unmarried couples are building on family land, they lenders are giving the money jointly, when the site is held by only one person

listermint

AmberGold wrote: »

A friend is gifting half his small site to daughter & future husband for a similar project. Having read this I don’t know if I’d be as generous.

Yeah that's a good idea. ... Not.


Very few relationships fail per percentage.

Can't go around assuming the worst. I think if your gifting sites then you'd obviously need to be sure they've been together some time before hand.

standardg60

jlm29 wrote: »

The bank would absolutely lend to two individuals where only one owned the site. I know of several cases where they’ve done this. In the most recent case I’ve heard of, the bank requested a letter from an accountant to say that the party who didn’t own the property had sought independent financial advice, and were aware of the implications etc etc.
Transferring the site into joint names would cost a bomb in terms of tax and stamp duty if the couple aren’t married, so i would say that in the vast majority of cases where unmarried couples are building on family land, they lenders are giving the money jointly, when the site is held by only one person

I'd be interested to know what implications the party who didn't own the site were made aware of? What are those implications?

standardg60

listermint wrote: »

Yeah that's a good idea. ... Not.


Very few relationships fail per percentage.

Can't go around assuming the worst. I think if your gifting sites then you'd obviously need to be sure they've been together some time before hand.

I think its a very good idea and well worth getting legal advice beforehand.

standardg60

Subtle wrote: »

Ok, I'm genuinely asking out of curiosity or perhaps ignorance, but how would the OP possibly be able to buy out the ex if getting 300 quid together is proving tough? Obviously I'm missing something??

Edit: Aha... House sells for 300k, bank owed 200k, so 50k windfall each. OP gives their 50k to ex, happy days, no mortgage.

Your point is perfectly rational, OP isn't planning on selling, which is why I advised on contacting the mortgage provider to see if they'd even be willing to give them a mortgage on their own.

Glass fused light

standardg60 wrote: »

So what's to stop the op declaring 'get off my site' if it's not in both their names?

I did the exact same thing as the op except the site was donated by my ex's parents, once we applied to build the site was transferred to both of us at the same time. The origination of the site was legally irrelevant when we split.

There is nothing to stop the OP from declaring 'get off my site' but as there is now a mortgaged house on the site the OP has to figure out who holds equity in the house. The building follows the land so the OP could change the locks etc but if the ex breaks in the Gardai are not likely to be willing to take it to court without the civil case of house ownership being sorted. If they are married they both have rights to reside in the home. It could also be that they sorted out the transfer of ownership in expectation of not marrying.

Even if you were married at the time of the transfer you would/should have paid tax and stamp on 50% of the value of the transfer from your exes parents.

The origin of the site was legally irrelevant once the site was in both your names.

standardg60 wrote: »

I'd be interested to know what implications the party who didn't own the site were made aware of? What are those implications?

The biggest issue is that the couple if unmarried are strangers in the legal and tax spheres. They owe the Bank 100% of the loan but dont have legal control over the asset. Even with a legal conrtact covering all eventualities they have to go to court to assert any financial claim to the property. The home is not a marital home and could be sold or remortgaged without their knowledge or participation. The land and house would form part of the estate of the site owner so the unmarried partner has no automatic inheritance right so joint wills would be a must. Without a will the family of the site owner inherit and may not necessarily want to see the surviving partner set up house with a new partner and so look to evict, sell and pay off with a cash settlement instead. With a wil they could have to pay tax if the death was within 5(?) years of the move in date.

4ensic15

Glass fused light wrote: »

The biggest issue is that the couple if unmarried are strangers in the legal and tax spheres. They owe the Bank 100% of the loan but dont have legal control over the asset. Even with a legal conrtact covering all eventualities they have to go to court to assert any financial claim to the property. The home is not a marital home and could be sold or remortgaged without their knowledge or participation. The land and house would form part of the estate of the site owner so the unmarried partner has no automatic inheritance right so joint wills would be a must. Without a will the family of the site owner inherit and may not necessarily want to see the surviving partner set up house with a new partner and so look to evict, sell and pay off with a cash settlement instead. With a wil they could have to pay tax if the death was within 5(?) years of the move in date.

This makes no sense. A joint mortgage wouldn't have been given if the site was not in both names. If the property is in both names it can't be sold without the signature of both. There are endless permutations as to how one party might take over from the other, depending on whether the parties were married, if there are children etc. etc. In some cases the person left behind gets a barring order against the other. It can only be got if there is a threat of violence. It may well be that a partition suit will have to be take.

jlm29

4ensic15 wrote: »

Glass fused light wrote: »

The biggest issue is that the couple if unmarried are strangers in the legal and tax spheres. They owe the Bank 100% of the loan but dont have legal control over the asset. Even with a legal conrtact covering all eventualities they have to go to court to assert any financial claim to the property. The home is not a marital home and could be sold or remortgaged without their knowledge or participation. The land and house would form part of the estate of the site owner so the unmarried partner has no automatic inheritance right so joint wills would be a must. Without a will the family of the site owner inherit and may not necessarily want to see the surviving partner set up house with a new partner and so look to evict, sell and pay off with a cash settlement instead. With a wil they could have to pay tax if the death was within 5(?) years of the move in date.

This makes no sense. A joint mortgage wouldn't have been given if the site was not in both names. If the property is in both names it can't be sold without the signature of both. There are endless permutations as to how one party might take over from the other, depending on whether the parties were married, if there are children etc. etc. In some cases the person left behind gets a barring order against the other. It can only be got if there is a threat of violence. It may well be that a partition suit will have to be take.

A joint mortgage could and would have been given if the site was in a single name. It mightn’t make any legal sense, and if might not seem right to you, for the very valid reasons outlined above. But it happens all the time. I am a joint mortgage holder on a house I do not own.

Glass fused light

4ensic15 wrote: »

This makes no sense. A joint mortgage wouldn't have been given if the site was not in both names. If the property is in both names it can't be sold without the signature of both. There are endless permutations as to how one party might take over from the other, depending on whether the parties were married, if there are children etc. etc. In some cases the person left behind gets a barring order against the other. It can only be got if there is a threat of violence. It may well be that a partition suit will have to be take.

If the property is in both names it can't be sold without the signature of both, but there are still plenty of "family" homes which are just in the name of one party. With older people the husband would have been the 'income provider' and the wife may not have not been included in the transaction at all. With others one party owned a home and the other party just moved in without any financial buy in.

The bank have recourse against both parties for the full amount they loaned out.
If the mortgage is in default the bank go after best source of recovering the money and so look at the house built on the site first. They are both on the mortague so the bank have the right to take them both to court, get a sell order and recover (x) the loan, interest and fees from the sale proceeds. And chase each for any shortfall.
The market value equity of the house is (a) the value of the site plus (b) the build cost plus or minus (c) market value, what someone will pay for it on the open market. The OP was gifted the site so the bank would only be funding (b) the build cost.
Once (x) is less than (a*)+(b)+/-(c) the bank get their money back.
(*nil cost to bank)
If the bank are still out of pocket they look at each party to see if either party have other assets or good income streams and follow the money.

The bank don't care who occupies the house once they have a registered the mortgage on the the site and eventual structure, as the property can't be sold without settlement of the loan. The court can order who can live in it and who should make the loan repayments. The courts can't order bank not to recover the loan from either party or not to look for a repossession order.

The mortgage is a self build one on gifted land from a parent. They are disposing of an asset and revenue will want the CAT\CGT payment. There is a tax advantage through the parent child relationship. There is no tax break on a transfer from the parent to the partner. The child and partner unless married also don't get a tax break either. It's cheaper to leave the site in the child's ownership and put the tax break into building the house. In this case the bank may want a confirmation that the partner is aware that they owe the money but would have to rely on a court order to recover funds or gain residency rights or to have their name added to the folio.

If the couple marry the family home act applies but as they are both on the mortgage and liable their bank are not at any additional disadvantage.
Since 2010 if they don't marry the civil partnership and cohabiting act applies and again the court has to recognise that both are party to the loan agreement.

Glass fused light

Glass fused light wrote: »

If the property is in both names it can't be sold without the signature of both, but there are still plenty of "family" homes which are just in the name of one party.

It's much more common than you would think, especially in rural areas where there is a farm involved. It's too long to go into here but due to the ins and outs of minimising or in most cases avoiding inheritance tax on farms it is necessary for the person inheriting to have minimal assets therefore you will find a lot of people have the house in their wives name if there is going be a farm transferred to them.

standardg60

jlm29 wrote: »

A joint mortgage could and would have been given if the site was in a single name. It mightn’t make any legal sense, and if might not seem right to you, for the very valid reasons outlined above. But it happens all the time. I am a joint mortgage holder on a house I do not own.

There are two very valid reasons why this cannot be the case.

Firstly, any jointly held mortgage protection cover will state that in the event of the death of one party the title deeds will automatically pass to the other. No other third party e.g next of kin has any legal standing.

Secondly, no mortgage provider will on the completion of a jointly held mortgage return the deeds to only one of those holders, why would anyone in their right mind enter into a joint mortgage agreement if that were the case?

People may not be aware or be informed, but all solicitors handling joint mortgage applications will automatically transfer the deeds of the property, site or whatever into both names before furnishing to the mortgage provider.

Eric Cartman

AmberGold wrote: »

A friend is gifting half his small site to daughter & future husband for a similar project. Having read this I don’t know if I’d be as generous.

this kind of thing is why Ireland needs pre-nups asap. The cohabiting ownership rule also needs to be abolished. A parent should be able to gift their son/daughter land or a house or anything and it never be able to be taken from them by a partner. We live in an awful time where you can't even live with a partner for a few years without them being able to take things they don't deserve

4ensic15

jlm29 wrote: »

A joint mortgage could and would have been given if the site was in a single name. It mightn’t make any legal sense, and if might not seem right to you, for the very valid reasons outlined above. But it happens all the time. I am a joint mortgage holder on a house I do not own.

You can't mortgage what you don't own. You might be able to guarantee a mortgage but you can't give a mortgage on your property.

standardg60

Eric Cartman wrote: »

this kind of thing is why Ireland needs pre-nups asap. The cohabiting ownership rule also needs to be abolished. A parent should be able to gift their son/daughter land or a house or anything and it never be able to be taken from them by a partner. We live in an awful time where you can't even live with a partner for a few years without them being able to take things they don't deserve

It can work both ways. It's all about morality at the end of the day.

Unfortunately that's something which is in very short supply in this country.

jlm29

standardg60 wrote: »

jlm29 wrote: »

A joint mortgage could and would have been given if the site was in a single name. It mightn’t make any legal sense, and if might not seem right to you, for the very valid reasons outlined above. But it happens all the time. I am a joint mortgage holder on a house I do not own.

There are two very valid reasons why this cannot be the case.

Firstly, any jointly held mortgage protection cover will state that in the event of the death of one party the title deeds will automatically pass to the other. No other third party e.g next of kin has any legal standing.

Secondly, no mortgage provider will on the completion of a jointly held mortgage return the deeds to only one of those holders, why would anyone in their right mind enter into a joint mortgage agreement if that were the case?

People may not be aware or be informed, but all solicitors handling joint mortgage applications will automatically transfer the deeds of the property, site or whatever into both names before furnishing to the mortgage provider.

I can 100% tell you that the deeds weren’t transferred into both our names before the mortgage was drawn down. I know this, because the solicitor told us he was going to do it, but then he subsequently told us that if he did, I would be liable for stamp duty and tax, because we aren’t married. I was requested by the bank to get a letter from our accountant to say that I had received independent financial advice regarding the implications of taking out a joint mortgage on a property that I’m not named on the deeds of. I am definitely named on the mortgage documents, I’m not just guaranteeing it.

jlm29

4ensic15 wrote: »

jlm29 wrote: »

A joint mortgage could and would have been given if the site was in a single name. It mightn’t make any legal sense, and if might not seem right to you, for the very valid reasons outlined above. But it happens all the time. I am a joint mortgage holder on a house I do not own.

You can't mortgage what you don't own. You might be able to guarantee a mortgage but you can't give a mortgage on your property.

My name is on the mortgage documents, right beside my partners.

Glass fused light

standardg60 wrote: »

People may not be aware or be informed, but all solicitors handling joint mortgage applications will automatically transfer the deeds of the property, site or whatever into both names before furnishing to the mortgage provider.

No law abiding solicitor will transfer any property without the proper authorisation and consent of the owner. To attempt to do so without the owner being aware or informed would result in a disbarment disciplinary and a criminal case for fraud.

standardg60

Amazing.

So you are aware that you are 50% responsible for repayment of that loan without any recourse to the assets secured on it?

Who is providing your mortgage protection cover? Does it state that the deeds will transfer to your partners next of kin?

You are surely just acting as a guarantor.

jlm29

standardg60 wrote: »

Amazing.

So you are aware that you are 50% responsible for repayment of that loan without any recourse to the assets secured on it?

Who is providing your mortgage protection cover? Does it state that the deeds will transfer to your partners next of kin?

You are surely just acting as a guarantor.

I am aware that I am liable for the mortgage, yes. I’m not a guarantor on the mortgage, it’s a joint mortgage. We intend to get married in the near enough future, so that will eliminate the issue. It’s a very very small mortgage, that’s why I was comfortable with it. I’ve been living here for a few years, the amount I haven’t paid in rent is well more than half the mortgage.
We don’t have a joint mortgage protection policy, we both have separate ones.

standardg60

Thanks for clarifying, so in your case there was a small remortgage on a house that was fully owned by your partner already, in which case a transfer of ownership would have resulted in a large cgt/ stamp duty bill.

I assume you would agree then that you would not have done the same in the case of a full purchase/house build?

jlm29

standardg60 wrote: »

Thanks for clarifying, so in your case there was a small remortgage on a house that was fully owned by your partner already, in which case a transfer of ownership would have resulted in a large cgt/ stamp duty bill.

I assume you would agree then that you would not have done the same in the case of a full purchase/house build?

Thats exactly the case, as you describe it above. I wouldn’t personally have done it in the case of a full purchase/house build, but I know people who have. I know of two couples who built houses on family land, owned by one half of the couple. Both were given joint mortgages to build.

standardg60

standardg60 wrote: »

Thanks for clarifying, so in your case there was a small remortgage on a house that was fully owned by your partner already, in which case a transfer of ownership would have resulted in a large cgt/ stamp duty bill.

I assume you would agree then that you would not have done the same in the case of a full purchase/house build?

As I stated in my post it is not uncommon at all what jim29 is describing. I know of one married couple in a brand new house that is the name of only one but has a joint mortgage as it is beneficial for a number of reasons to do it this way.

I know a number of other cases of this also, so its far from the unheard of situation you are making it out to be.

standardg60

Glass fused light wrote: »

No law abiding solicitor will transfer any property without the proper authorisation and consent of the owner. To attempt to do so without the owner being aware or informed would result in a disbarment disciplinary and a criminal case for fraud.

Of course. I was implying that not being aware or informed of the implications is not necessarily the same as not being told.

I can fully understand there being beneficial reasons, but only in the case of married couples were ownership rights are already conferred.

Has co-habiting couple legislation conferred new rights to people not named on deeds?

jlm29

Freya Tender Garbage wrote: »

I know a number of other cases of this also, so its far from the unheard of situation you are making it out to be.

Those exactly- it was in our original mortgage offer that we would need to have the house transferred into joint names, and our solicitor was very surprised- he said that in any case previously that he’d dealt with, there was no issue with issuing a joint mortgage on a house or site owned by one party. As soon as he queried it with the bank it was removed from the paperwork.

Glass fused light

standardg60 wrote: »

Of course. I was implying that not being aware or informed of the implications is not necessarily the same as not being told.

I can fully understand there being beneficial reasons, but only in the case of married couples were ownership rights are already conferred.

Has co-habiting couple legislation conferred new rights to people not named on deeds?

You stated that a solicitor would transfer ownership, the solicitor acts on instruction from and on behalf of the client. Anyway they are no longer premitted to act for the seller and buyer so one party would need a different solicitor to change the ownership of a property. Tthe bank want to receive confirmation that the party with no ownership has received professional advice. This so that neither party can claim that they were not aware of the legal and financial implications of the contract.
If some of the argumets made in court recently are setting a tone, I would think even with jointly held property, banks may actually start looking for each party to have a separate solicitor appointed to ensure that each has independant legal advice.

Married couples don't have ownership rights over their partners assets. Assets/property bought by one party are owned only by the purchasing party. Historicaly men's legal standing has always been recognised while women on marraige lost their legal identy eg. had no property rights, and could not sue or be sued in court. The married womens act in the 50's was to fully recognise a married woman as independant from her husband. The family home act in the 70's prevented a partner who owned the marital home from selling or mortgaging the property without the consent of the other parther. It did not give the non-owning partner ownership rights.

The acts and the cohabiting act gives the parties the right to go to court and argue a case as to why the court should look at the economic relationship historical and current and seek redress for a perceive loss or financial dependency. The judge will look at all circumstance (eg co-mingling of funds where partner A bought property using partner B's funding etc) to determine a fair split.