Splitting property ownership if paid equal deposit but only 1 is paying off mortgage

dcs787

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Hi, I have recently purchased a property with my brother. We put in equal deposit but he is living in the property and paying off the mortgage.

So based on the deposit we have 25% each but as the mortgage is under his name he is claiming the rest of the 50%. so 25% me and 75% him. Is this ownership model correct?
 
yes.. we both put in 25% of purchase price (including stamp duty etc) each.. he borrowed the remainder of the 50% mortgage himself.. it seems a little odd that he owns 75% of the property when we go to sell? Or maybe i'm overthinking this?
 
Well if you own 25% of the house and don't live there he should in theory be paying you rent each month. If he wasn't living there you would be renting the property out and receving 25% of the rental income each month.
 
great point.. also regarding the mortgage... i was thinking that if we both put 25% each in cash and the rest is mortgage then neither of us can lay claim to that share yet as this is borrowed money? As he pays off the mortgage then his ownership share will increase but if we sell before then we would pay off the mortgage and then divvy up the rest according to what is left?
 
Well if you own 25% of the house and don't live there he should in theory be paying you rent each month. If he wasn't living there you would be renting the property out and receving 25% of the rental income each month.
I don't understand the logic here. Both parties input 25% of the PP but only 1 party is paying the mortgage (75%). OP, I am assuming that the mortgage is in joint names of both parties, which if only 1 party is paying the mortgage could lead to problems up the line. In theory you could be classed as 50/50 owners of the property as presumably you are registered as joint owners. However, the martgage arrangement could cause problems, if/when the property is sold or your brother wishes to take it over. Best to formalise the position now, with the help of a solicitor, rather than risk problems arising later. i.e. What will happen if you want to take out a separate mortgage in the future. Any bank assessment will take into account your liability on this mortgage!! Also, as your brother pays down the debt, he should be legally entitled to a higher share in the property if/when it is sold, if no other agreement is in place!! Unless you come to an agreement now, there is a high liklihood of problems arising in the future.
 
I don't understand the logic here. Both parties input 25% of the PP but only 1 party is paying the mortgage (75%). OP, I am assuming that the mortgage is in joint names of both parties, which if only 1 party is paying the mortgage could lead to problems up the line. In theory you could be classed as 50/50 owners of the property as presumably you are registered as joint owners. However, the martgage arrangement could cause problems, if/when the property is sold or your brother wishes to take it over. Best to formalise the position now, with the help of a solicitor, rather than risk problems arising later. i.e. What will happen if you want to take out a separate mortgage in the future. Any bank assessment will take into account your liability on this mortgage!! Also, as your brother pays down the debt, he should be legally entitled to a higher share in the property if/when it is sold, if no other agreement is in place!! Unless you come to an agreement now, there is a high liklihood of problems arising in the future.


My logic is OP bought a 25% share of a rental property and his brother bought 75% share, how both parties financed the purchase of the property is irrelevant. OP is entitled to 25% of the rental income and 25% of any sales proceeds in the future.
 
Sorry to disagree with you Bobby G, but there is a legal flaw in your logic! By meeting full payments on the mortgage, 1 party is contributing more towards the purchase price of the property than the other party. Obviously don't take my word for this, but if you know a solicitor ask him/her!
 
Hi, I have recently purchased a property with my brother. We put in equal deposit but he is living in the property and paying off the mortgage.

So based on the deposit we have 25% each but as the mortgage is under his name he is claiming the rest of the 50%. so 25% me and 75% him. Is this ownership model correct?

Did you not think of this before entering into the agreement to buy?

Have you a written agreement on it?
 
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