Buying ex out

[DG1411]

My husband and I separated in April 2013 and he moved in with his girlfriend in July 2013. I stayed in the house with the two children and two dogs.

We work together in what was our business but I'm not making any claim on it, particularly as it's struggling! I work part time and virtually from home and have had to spend a lot of time dealing with our eldest daughter's anxiety and depression issues, which has meant she hasn't attended school full time since January 2015 and I have had to take her to all sorts of appointments, as well as daily attempts to get her to school. She has been unable to sleep over at his place since November last year. She is 15 and her younger sister is 13, and she stays one night with him every other week. I have been dealing with her issues with minimal help from him, including when my eldest took an overdose and he didn't bother to see her until it was his weekend, 8 days later.

Last year we went to mediation to finally get the divorce going and agreed that he would pay child support until they are 18. We also agreed that he would get 40% of the house value when I took him off the mortgage. Sadly our mediator wrote it incorrectly so it reads that he will get 40% of the price when I sell, which will be when our youngest is 18. We haven't take the agreement to a solicitor to get it legalised (sorry I can't remember l the correct term!)

I am in a position now to take him off the mortgage - something he was very keen for me to do when we were in mediation. However he is refusing to sign the form as he thinks he should get his 40% at sale time. He has said if I can give him £15k he will consider agreeing to the price when I take him off the mortgage but for 50% of the equity. I cannot borrow enough to give him that.

In the meantime he doesn't contribute to either the mortgage or the life cover.

Where do i stand with the fact that he doesn't make any payments towards the mortgage or life cover? I thought the whole point of him getting 40% at the time of removal from mortgage was that he didn't have to pay. But if he is going to get 40% of the eventual sale price should he contribute?

Help!

[wales01man]

Re: Buying ex out

Are you remortgageing in your name only?

[DG1411]

Re: Buying ex out

Are you remortgageing in your name only?

Yes, my name only

[Diana M]

Re: Buying ex out

we went to mediation to finally get the divorce going and agreed that he would pay child support until they are 18. We also agreed that he would get 40% of the house value when I took him off the mortgage. Sadly our mediator wrote it incorrectly so it reads that he will get 40% of the price when I sell, which will be when our youngest is 18. We haven't take the agreement to a solicitor to get it legalised

From what you say this may be the first legal issue you need to address.

Di

[DG1411]

Re: Buying ex out

From what you say this may be the first legal issue you need to address.

Di

We'll have to return to mediation to do that as neither of us are going to budge. I've told him I won't bother remortgaging and he can wait the 5 years.

But isn't the point of him not getting 50% because he's not paying anything at all towards the mortgage or life cover? What is the incentive to get him off the mortgage if he's still going to get a percentage of the eventual sale price and will contribute nothing?

[FionaC]

Re: Buying ex out

Dear DG1411,


Mediation can be great at helping to resolve issues but as you have found out it doesn't give you legal advice and any agreement is not automatically enforceable.


Here are a few pointers


Any agreement you reach you will want to enforce and to do that you will need to issue divorce proceedings and then get a financial order of the court.

A court will not always divide assets 50-50 when one parent has the care of the children they may get a larger share of the house or other assets. It is decided on an individual basis using case law. Your needs and those of your children seem pretty high to me so be careful about making a deal just to get rid of him and putting yourself in a tough situation economically.

With regard to the house you can really do what you like provided you agree. As solicitors we talk about the net equity, this is 1. the value of the house ( average of three estate agents valuations), 2. minus the mortgage and 3. minus 2% of the value of the house to cover the costs of sale ( even if you are not selling immediately).

Were you to go to court the Judge will look at whether there can be a " capital clean break" this means whether you can buy out his share now. If this is agreed at 40% of the net equity you would need to raise a mortgage to cover the current mortgage plus his 40%.

Do remember if your husband is seeking 40% in the longer term you might be able to negotiate a smaller payment say 30% if you pay him now.

So how does it all work? Your e-mail shows you are aware that taking him off the mortgage is a benefit to him so if this is going to happen everything you need agreed should also be agreed now even if it happens in the future. The questions to be answered are really -what happens? when? and how?

If you re-mortgage, the house can be transferred into your sole name and provided your mortgage company agree your husband can have a legal charge registered against the property for his interest. This means you own the house and he just has the right to take his money out at a certain time in the future and get the property sold if you can't pay. If you can pay the property would not be sold. The % should be of the net equity that exists now. So for example if the house is worth £100k and the mortgage and costs of sale are £50k the net equity is £50k. if you were to register a legal charge of 50% of the net equity against the property it could either simply state 50% of the net equity (£25,000) or so you get the benefit of the mortgage repayments you may want to say that your H receives 25% of the gross value.

This looks like how you were trying to deal with it and would allow you to get the benefit of the mortgage repayments but please do check the figures and if his percentage is correct - 40% seems high if there is a mortgage.

There are other ways to deal with this if this doesn't work for you guys.

The next stage is when is this payable? once you have a agreed a sum and a calculation to work that sum out you should really pay it as soon as you can. Any solicitor will include in an agreement an order for sale because this is the only way H can make sure he gets his money at some point in the future which a Judge will want to see. You then have to agree when the order for sale should kick in.

In order to make this all then happen you need to ensure all points between you are agreed, pensions, debts, maintenance and once you have decree nisi in your divorce send in an agreed order of the court. You shouldn't have to go to court. If you need legal help with the drafting of the order ring round and see if any solicitors will give you a fixed fee or if your mediator can refer you to a local solicitor or lastly have a look at the website resolution.org.uk.

I am sorry this is so lengthy but it seems like you are really close and hopefully this will help you to finalise matters.

kind regards

Fiona C

[DG1411]

Re: Buying ex out

Thank you, Fiona, there's plenty there to think about!

I do have a question though:

"if you were to register a legal charge of 50% of the net equity against the property it could either simply state 50% of the net equity (£25,000) or so you get the benefit of the mortgage repayments you may want to say that your H receives 25% of the gross value."

Indontbubsertwhat you mean. How do I get benefit of mortgage repayments?

[FionaC]

Re: Buying ex out

Hi there,

I suppose this really only works for the repayment part of any repayment mortgage. If it is an interest only mortgage it doesn't matter.


If you detail the share as part of the equity in the property then your H's share goes up as the equity increases ie. every time you pay off a bit of the capital of the mortgage. It also increases in line with any market increases in the value of the property.

So in my example if you eventually paid off the mortgage and his share was a 25 % of the value of the property he would still have 25% of the value and you would have 75%. If it was related to the net equity and you paid off the mortgage you would each get 50% of the net equity which would in effect be half the value of the property then.

I hope this helps.

kind regards,

Fiona C


If H's interest is measured by the value/price of the property then once this sum is settled you can pay off as much of the mortgage as you want and his share won't increase. It will only increase in line with property market increases.

[DG1411]

Re: Buying ex out

Thank you. That makes sense 😊

[DG1411]

Re: Buying ex out

Would I be unreasonable to suggest 40% when I remortgage or 30% when I sell?

[FionaC]

Re: Buying ex out

Dear DG1411,

As it's a process of negotiation you can suggest what you like, I would certainly say what you really want early on or you'll never get it! The right percentage differs in each case and depends on the value of the other assets, the needs, income available to each person etc.


best wishes

Fiona C

[DG1411]

Re: Buying ex out

We're making good progress and should be done in one more meeting.

We are agreeing on 25% of the house value which seems fair to us both.

However, my step mother died recently and I am in her will so I would actually be in a position to pay him off totally and possibly reduce my mortgage.

My question is - should I declare this at our next meeting? If it does happen, is there any way he can make a claim on the inheritance? I don't know amounts and money wouldn't be available till well after the divorce is finalised

Thank you 😊