Joint mortgage - legal implications of one party moving out and renting a room to pay their half of the mortgage

[begbie]

Partner and I recently separated. I moved out and partner has remained in the house.

We need some time (6 months) to figure out a plan for the house and mortgage. We want to rent a room in the house. The rent would go to me and I would use it to pay my half of the mortgage. We then plan to either sell or do a buyout once we figure out best path forward.

Are there any negative legal implications for me if I pay the mortgage this way?

 

[RedOnion]

The rent would go to me and I would use it to pay my half of the mortgage.

I've no idea about the legal aspect, so I'll leave to others to comment. But you should be aware that this structure would mean the rent income is taxable.

 

[DannyBoyD]

Better that rent is paid to person who is resident & then rent-a-room applies.

 

[NoRegretsCoyote]

Partner and I recently separated. I moved out and partner has remained in the house.

Is the ownership arrangement joint tenancy or tenancy in common? If it's the latter, is the ownership 50/50?

Notwithstanding the tax arrangements and how it is funded, it makes sense for both parties to keep paying their prior share of the mortgage for the time being. This means there is no dispute when the time comes to sell the house or one party to buy the other out.

You will also have to work out (and straight away) an arrangement for life insurance, house insurance, utilities, etc. Don't let this drag.

We then plan to either sell or do a buyout once we figure out best path forward.

I know there are emotional factors but it's not clear to me why you need six months to figure it out. Presence of a lodger is a factor for any decision down the line too.

Anyway good luck, I know this stuff isn't easy.

 

[DannyBoyD]

Presence of a lodger is a factor for any decision down the line too

Dont think so, tenant has legal status of guest when they are sharing with owner; so can't acquire any right of residence.

 

[NoRegretsCoyote]

Dont think so, tenant has legal status of guest when they are sharing with owner; so can't acquire any right of residence.

You're totally right and I wasn't making any kind of legal point.

My point was more that the presence of a lodger is an additional human/financial factor in the eventual decision to sell or buy one another out in six months time.

 

[begbie]

Is the ownership arrangement joint tenancy or tenancy in common? If it's the latter, is the ownership 50/50?

Notwithstanding the tax arrangements and how it is funded, it makes sense for both parties to keep paying their prior share of the mortgage for the time being. This means there is no dispute when the time comes to sell the house or one party to buy the other out.

You will also have to work out (and straight away) an arrangement for life insurance, house insurance, utilities, etc. Don't let this drag.


I know there are emotional factors but it's not clear to me why you need six months to figure it out. Presence of a lodger is a factor for any decision down the line too.

Anyway good luck, I know this stuff isn't easy.

I am not sure which ownership type it is, I assume it is whatever the standard is for a joint 50/50 mortgage.

Is the issue with a dispute when selling or buying out only a factor of the period of time I wasn't paying the mortgage, say x months?

Thanks for the breakdown, very helpful and hadn't considered all of it.

 

[ClubMan]

I am not sure which ownership type it is, I assume it is whatever the standard is for a joint 50/50 mortgage.

Are both names on the mortgage?
Are both names on the deeds?
Ask your conveyancing solicitor if necessary.

 

[begbie]

Yes both names on the mortgage and the deeds.

 

[NoRegretsCoyote]

I am not sure which ownership type it is, I assume it is whatever the standard is for a joint 50/50 mortgage.

You will need to familiarise yourself with which it is and the concepts. I assume written somewhere on mortgage agreement and/or contract when purchase made.

Is the issue with a dispute when selling or buying out only a factor of the period of time I wasn't paying the mortgage, say x months?

There can be a dispute over anything and everything. For example Party A doesn't pay the mortgage for a month Party B could frustrate the sale by insisting on being reimbursed for the month's mortgage cost. So my advice is that absolutely every payment is clearly split 50/50 and from day one. The other thing (and I know this is a bit contradictory) is that there are much bigger amounts at stake than over who paid for a toilet brush. A dispute over what to do can leave both of you worse off so try to bear this in mind.

It is also worth talking to your lender as many will give you a payment holidays especially when house is on the market.

 

[Brendan Burgess]

When you bought the house, did you have a written agreement on the ownership and what to do in the event of separating?

Brendan

 

[Brendan Burgess]

I would be a bit worried about the 6 months wait as well.

You may have separated on reasonable terms but then one sees the other with a new partner and all hell breaks loose. Or one suspects that the other had a new partner before the separation and even more hell breaks loose.

Get a rough agreement as soon as possible and get it in writing.

You can vary it later if you both wish.

Brendan

 

[zizikremes]

Hello. Maybe I am too late. I was in the same position. Are you still looking for an answer?