Joint owernship of negative equity house - one party refuses to contribute to mortgage

Discussion in 'Issues arising from joint mortgages' started by gh0676, Nov 16, 2017.

  1. gh0676

    gh0676 Registered User

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    Last edited: Nov 16, 2017
    Looking to get some advise in relation to a friend who jointly owns a house but the other joint owner refuse to contribute.

    Scenario:
    Person A + B Bought a house jointly 7 years ago and jointly lived in the house for 4 years.

    3 years ago Person B moved to another part of the country and stopped making any mortgage contribution, forcing Person A to make up the shortfall.

    The house is over 100k in negative equity

    Person A now pays full mortgage.

    Person B is unemployed has no savings and refuses to make any contributions to the mortgage.
    Person B cannot afford negative equity shortfall in the event that the house is sold.

    Person B, however, is joint owner as per the deeds and still presumably entitled to 50% equity in the house.

    Person A, went to solicitor to try get person B to contribute to mortgage, which they can’t /won’t.

    Can you give any advise to Person A in this type of scenario? have they any protection?, The solicitors suggestion is to write to person B and demand they make some contribution (which is unlikely).
     
    Last edited: Nov 16, 2017
  2. Joe_90

    Joe_90 Frequent Poster

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    Very difficult one to resolve.

    Is Person B just not contributing as they can't or just not bothered.

    Is person A living in the house? If they are then could they rent out a room to cover the shortfall.
     
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  3. Seagull

    Seagull Frequent Poster

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    Bear in mind that as things stand, all that person B has to do is sit back until the property has positive equity, and then come along and demand their share. If A wants to keep the property, they would be well advised to try and have B formally relinquish any rights to the property.
     
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  4. The Horseman

    The Horseman Frequent Poster

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    I doubt the bank will agree to B formally relinquishing any rights to the property as they would be jointly and severally liable for the mortgage giving the bank a second person to go after if the mortgage is not paid.

    Sell the property and this will force B's hand. As it stands A is taking all the pain while B stands to make some of the gain when or if the property gets back into positive equity.
     
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  5. gh0676

    gh0676 Registered User

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    Don't think selling the property makes sense, Person A would have to cover 50,00k negative equity balance (which is not feasible) and would also be homeless, Person B would also have to fork out 50K, which they don't have. It would leave both in even worse situation.

    [QUOTE="
    Sell the property and this will force B's hand. As it stands A is taking all the pain while B stands to make some of the gain when or if the property gets back into positive equity.[/QUOTE]
     
  6. Brendan Burgess

    Brendan Burgess Founder

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  7. Brendan Burgess

    Brendan Burgess Founder

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    How much are the monthly repayments?

    How much would it cost A to rent a similar house?

    How much would he be getting from the tenant they should have?

    It might not be that unfair.

    Brendan
     
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  8. gh0676

    gh0676 Registered User

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    Last edited: Nov 17, 2017
    Thanks for the link to the key post Brendan, It was helpful.

    Person A's partner does live in the house and contributes to the mortgage, They are happy with this arrangement however, I think the main issue is, if A and partner continue to pay the mortgage off in full, with no contribution from B, B is still entitled to 50% share of the property if /when the house is eventually sold.

    What would happen in this scenario?, would A be able to block B getting 50% proceeds since B did not contribute to the mortgage?

    Ideal outcome is for A, to convince B to hand over 50% of house, or alternatively, for agreement to be signed, that all extra payments made by person A, will be taken out of future sale proceeds, and go towards person A . Whether either of these scenarios are possible to enforce though, is hard to determine.
     
    Last edited: Nov 17, 2017
  9. Ravima

    Ravima Frequent Poster

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    if A's partner is contributing towards the mortgage, then s/he is building up equity in the house as well, so B will NOT automatically get 50%.

    If the new partner is a wage earner, could you approach B to sign over rights/obligations to him/her and also at the same time have Bank agree?