A legal question.

[joe-90]

I said I'd put this question up for someone I know (not me). Can anyone help?

He met a woman who became his partner and they set up house together.

They both paid half 2 years ago for a new house at the height of the boom. They paid £180K for it.

Now they are splitting up she refuses to sell the house for less than they paid for it so that she gets her money back.

However, with the recent downturn it is now worth around £140K. He wants to buy her half out at the market rate today - not what it was when they bought it. She refuses. What should he do? Where does he stand legally? No children involved as they are both in their 60s. She wants to sell and go back to Leicester. He wants to stay in the house. It's just the price they can't agree on.

Any idea?

 

[Doc Lenny]

I think he should sell up and buy a canoe

 

[Rico99]

Joe,

I don't think ther is anything legal to decide this.

It is just the same as if they were still toghether and selling the house.
As always with property you try to get as much as you can.

So you may want to suggest that they split the difference between peice paid and current value.

Or he could ask her to buy him out at price paid and then get his own place.

She may change her mind when confroted with the reveresed propsal.

Rico

 

[MarkBarl]

Could he call her bluff? Tell her that they will have to sell on the open market and get the usual 3 valuations. Confronted with the reality of the market value and then prospect of having to pay estate agent fees as well she may back down and accept his offer.

 

[TonyWarrington]

I think that they should both seek some professional advice - maybe an initial consultation with a solicitor. Have a look on LawSociety

I am not in the legal profession but would guess the position here depends on who owns the property (Is it joint names on deeds or one name?) and what form of legal contract drawn up, if any!

I can understand both wanting to get at least all the original purchase price back. Unfortunately as you say the property has lost value since purchase therefore this would seem to be an unreasonable expectation. I suggest that to be fair both parties will need to agree to divide the loss equally.

If she is not in agreement with sharing the joint loss then perhaps they should try to sell the house at the original price paid and see how long it takes!

 

[joe-90]

They've been trying to sell it for 3 months but not one person has been through the door. Can he demand they sell at market value? Or would he have to have that enforced by the courts?

 

[TonyWarrington]

Can he demand they sell at market value?

He should try to convince her that this is the only option other than keep on waiting for a sale at an unrealistic price . Assuming joint ownership both parties will have to agree on selling price and sign the sale documents

Or would he have to have that enforced by the courts?

If it gets so bad that it has to go to court both parties will be involved in hefty legal expenses on top of the loss in value of their property. I would also question if the courts actually have the power to force a sale.

 

[securespark]

If they have both signed the mortgage agreement (if there was one), they are both jointly and severally liable.

This means either or both parties can be chased for any shortfall owed.

If one disappears, the mortgage company will look to the other to to repay ALL losses.

 

[Stivino]

I think there are three options.

1) The current market value would apply. i.e. she should sell him her half and swallow the loss.

2) He could give her back what she paid and be shot of her.

3) They stay together until the market value increases to what it was.

I think the law would come down on the side of the first option.

 

[joe-90]

There isn't a mortgage. They bought it cash. She won't sell. He can't afford to pay over the odds for her loss. He can't live with her.

Isn't it like a divorce where they just get valuations and then he pays her for her half? Why is she allowed to put his life on hold for a decade or more until prices rise again?

 

[megawatt]

He could try threatening the legal route on the basis that, by the time the legal fees had all been paid, neither of them would make a bean.

That may make her see sense and sell at market value

Good luck

MW

 

[joe-90]

She's too dumb or pig-headed to realise that in a falling market she'd be better off with a quick sale as she'll only get less later.

Btw, why do I need luck?

 

[megawatt]

The good luck was intended for your friend

You're being overly sensitive aren't you?

MW

 

[Chud]

No easy answer to this I'm afraid - professional advice will probably need to be sought.

At the end of the day they made a joint investment which has since depreciated due to market conditions, hence why should either of them make up the shortfall in the investment for the other party?

My suggestion would be to put the house on the market for an 'offers over £XXXXXXXX' deal with the return (minus fees etc.) being split 50-50 - set the starting price just below the current market value and fingers crossed they'll get over the market rate. Alternatively they could let the place out and split the proceeds until the markets pick up again...

 

[joe-90]

If you were married and filed for divorce, you couldn't say to your wife "I'm staying in the house, you clear off". The house would be sold as part of the settlement. Why should it differ because they are not married?