Investment property - owned jointly between two friends
- Thread starter JimmyB99
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Is the mortgage in joint names?
If so, then presumably the estate assumes the deceased's (share of the) outstanding debt?
Presumably there wasn't mortgage protection life insurance to clear half (or all) of the loan given that it's an investment property?
Was there a written contract between the joint owners on how this situation would be dealt with?
If so, then presumably the estate assumes the deceased's (share of the) outstanding debt?
Presumably there wasn't mortgage protection life insurance to clear half (or all) of the loan given that it's an investment property?
Was there a written contract between the joint owners on how this situation would be dealt with?
Hi Clubman,
Thanks for your comments/questions.
Mortgage is in joint names. "Presumably, the estate assumes the o/s debt". In practice, whatever the process, this is what will happen as it's pretty clear that this is what's equitable and ethical.
I guess the reason for the question...."legally, who is responsible for the mortgage?" Google seems to be saying the remaining mortgagee!! I am unaware of the existence of any written agreement. I think your questions have clarified what my question should be.....
In the absence of a written agreement, for friends who hold a joint mortgage and where on of them dies, who is responsible for paying the mortgage?
Thanks for your comments/questions.
Mortgage is in joint names. "Presumably, the estate assumes the o/s debt". In practice, whatever the process, this is what will happen as it's pretty clear that this is what's equitable and ethical.
I guess the reason for the question...."legally, who is responsible for the mortgage?" Google seems to be saying the remaining mortgagee!! I am unaware of the existence of any written agreement. I think your questions have clarified what my question should be.....
In the absence of a written agreement, for friends who hold a joint mortgage and where on of them dies, who is responsible for paying the mortgage?
In the absence of any contract stating otherwise that would sound correct to me. Joint mortgage holders are "jointly and severally liable" for the loan. If one reneges on paying it then the other is responsible for it.
For an investment property? I wouldn't have thought so?.
Steven Barrett
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Not a requirement for an investment property, just for people's PPRs.
T McGibney
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It used at least be a requirement when two or more unrelated partners invested together. I know because a friend of my own died suddenly a decade or so ago having earlier bought a house with another friend. The mortgage life cover averted what would have been an unholy mess as property values were then on the floor.
Steven Barrett
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It's a good requirement to have, even if they are related. A lot of investment properties don't wash their own faces when tax is added in. Add in that a death could mean the loss of an income in a family, it's better to have mortgage protection, which is fairly cheap.
This property in question could have been bought during the Celtic Tiger when mortgage protection was almost an afterthought for PPR's and certainly most policies weren't assigned. For RIPs, they just didn't look for it while giving people millions of euro in loans on the back of a phone call!
Really? I thought that it was a legal or at least regulatory requirement to have mortgage protection life insurance in place and assigned to the lender for PPRs - other than in limited circumstances where the borrower(s) circumstances mean that it's not available or would be outrageously expensive?
Steven Barrett
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Like all the regulatory rules were followed in banking during the Celtic Tiger!!
T McGibney
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It was bought during the Celtic Tiger. I don't know why the banks would have neglected this. They made fortunes from sales of mortgage protection.
OP here
Ah jpd - you can't be asking me logical questions like that!!
[Background: I'm helping someone do an itinerary of her husband's affairs in order to be able to give a sensible file to the solicitor for probate purposes. As I go through the affairs, various questions strike me. Some are easy to clarify with a bit of googling, etc. but other questions, like this one, are less clear-cut. For now, I don't have access to all the deceased's files which is why I can't answer Jpd's very sensible question.]
We will be getting legal advice - and so will get to the bottom of questions like this and others - so why am I posting at all? I think it's because.....
1. I'm very impressed with the info one gets on this site
2. It's interesting to get the experience of others
3. It's a useful way for me to record points of detail that I need to understand
4. I like to assimilate info as I go along and like getting into the weeds!
For the AAM community, it's clear that what's happened here is not best practice - e.g. no assigned life-cover coupled with no formal agreement. In the case I'm involved in, there is no question that we will renege on the mortgage so, in reality, the question is almost academic for me. It could be that there are people reading this thread who are in a similar arrangement who might benefit more from this thread than me.......by taking this thread as a prompt to now put formal agreements in place where necessary!
FWIW, my suspicion is that Clubman is right in that, in the absence of an agreement, the remaining party is liable for the mortgage. My understanding is that the property is still owned jointly by the estate of the deceased and his friend. If I'm correct, this seems like a terribly unfair default situation?? I'd really like to know, either way, if I am correct or not. I'm hoping that there's someone on AAM will set me straight!
Finally, in relation to life cover, my personal experience (which I think is similar to the situation in relation to the deceased) is that I dabbled in a few properties and had very substantial life cover - some of which was expressly assigned to a particular property, some not. In other words, sometimes banks lent money on the basis of the big-picture collateral/net-worth/life cover/human capital, etc. rather than always requiring life assurance contracts to be individually assigned to given properties.
Ah jpd - you can't be asking me logical questions like that!!
[Background: I'm helping someone do an itinerary of her husband's affairs in order to be able to give a sensible file to the solicitor for probate purposes. As I go through the affairs, various questions strike me. Some are easy to clarify with a bit of googling, etc. but other questions, like this one, are less clear-cut. For now, I don't have access to all the deceased's files which is why I can't answer Jpd's very sensible question.]
We will be getting legal advice - and so will get to the bottom of questions like this and others - so why am I posting at all? I think it's because.....
1. I'm very impressed with the info one gets on this site
2. It's interesting to get the experience of others
3. It's a useful way for me to record points of detail that I need to understand
4. I like to assimilate info as I go along and like getting into the weeds!
For the AAM community, it's clear that what's happened here is not best practice - e.g. no assigned life-cover coupled with no formal agreement. In the case I'm involved in, there is no question that we will renege on the mortgage so, in reality, the question is almost academic for me. It could be that there are people reading this thread who are in a similar arrangement who might benefit more from this thread than me.......by taking this thread as a prompt to now put formal agreements in place where necessary!
FWIW, my suspicion is that Clubman is right in that, in the absence of an agreement, the remaining party is liable for the mortgage. My understanding is that the property is still owned jointly by the estate of the deceased and his friend. If I'm correct, this seems like a terribly unfair default situation?? I'd really like to know, either way, if I am correct or not. I'm hoping that there's someone on AAM will set me straight!
Finally, in relation to life cover, my personal experience (which I think is similar to the situation in relation to the deceased) is that I dabbled in a few properties and had very substantial life cover - some of which was expressly assigned to a particular property, some not. In other words, sometimes banks lent money on the basis of the big-picture collateral/net-worth/life cover/human capital, etc. rather than always requiring life assurance contracts to be individually assigned to given properties.
But the mortgage is generally secured on the property being purchased and nothing else? So that's the only actually legal security?
Hi Clubman,
Sorry if I'm being slow but I'm struggling to understand what you're getting at in your latest post?
I was simply making the comment that banks, on occasion, did lend money without having a specific life assurance policy attaching to a specific mortgage.
Sorry if I'm being slow but I'm struggling to understand what you're getting at in your latest post?
I was simply making the comment that banks, on occasion, did lend money without having a specific life assurance policy attaching to a specific mortgage.
I read it as you saying that the bank loaned money on the basis of there being other assets even if the loan wasn't secured on these.