Joint Property - Dispute

User321

Registered User
Messages
10
Hi all,

I would like to get the groups advise on the legal process when it comes to unwinding a joint property and the likely ruling that a judge would make, based on any previous cases like this.

Background
- Property purchased as 'Tenants in Common' for €500k, ownership split 60% to Party A and 40% to Party B. Based on Cash invested + half a Joint Mortgage.
- Party A invested 100k cash and 200k Mortgage (half a joint mortgage). Total 300k = 60%
- Party B invested no cash and 200k Mortgage. Total 200k = 40%
- No Ownership Agreement in place as the solicitor at the time confirmed over email that in the event of a separation, one could buy the other out or the property would be sold and investment unwound in the order it was paid (400k back to Bank, 100k back to A, Expenses refunded and remaining profit split - if any)
- Property was refurbished; Party A invested 40k, Party B invested 10k. Total Property Value now €550k

Party A and Party B have separated (unmarried), Party A lives in the property and is paying the full Mortgage for last 12mts and all property expenses. Party B never lived in the property.

Dispute
Party A has mortgage approval to take over the full debt to release Party B and values Party B's refund = €10,000 (ignoring the fact Party B is not servicing the debt)
Party B is taking the property value, deducting the Mortgage then applying the ownership per cent; 550 - 400 = 150 @40% = €60,000 (€50k profit).

What is the likely ruling by a judge? (Note; all negotiations have failed so this case is proceeding to court)

Comments greatly appreciated!
 

Thirsty

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3,769
...at the time confirmed over email that in the event of a separation, one could buy the other out or the property would be sold and investment unwound in the order it was paid (400k back to Bank, 100k back to A, Expenses refunded and remaining profit split - if any)
why aren't you doing this, if that's what was agreed?
 

User321

Registered User
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10
The email was from the solicitor to Party A only. A meeting was held between the solicitor, A and B (to discuss the process) but the follow up email afterwards was based on a query from Party A asking to confirm the process which the solicitor outlined to them (as they had a vested interest).

Party B denies any involvement and as a result, has come up with their own unwinding method as outlined above.

Are their laws / accepted principles which a court would apply or could Party B successfully argue their view? Interested to hear any opinions. Thanks
 

The Horseman

Registered User
Messages
582
Hi all,

I would like to get the groups advise on the legal process when it comes to unwinding a joint property and the likely ruling that a judge would make, based on any previous cases like this.

Background
- Property purchased as 'Tenants in Common' for €500k, ownership split 60% to Party A and 40% to Party B. Based on Cash invested + half a Joint Mortgage.
- Party A invested 100k cash and 200k Mortgage (half a joint mortgage). Total 300k = 60%
- Party B invested no cash and 200k Mortgage. Total 200k = 40%
- No Ownership Agreement in place as the solicitor at the time confirmed over email that in the event of a separation, one could buy the other out or the property would be sold and investment unwound in the order it was paid (400k back to Bank, 100k back to A, Expenses refunded and remaining profit split - if any)
- Property was refurbished; Party A invested 40k, Party B invested 10k. Total Property Value now €550k

Party A and Party B have separated (unmarried), Party A lives in the property and is paying the full Mortgage for last 12mts and all property expenses. Party B never lived in the property.

Dispute
Party A has mortgage approval to take over the full debt to release Party B and values Party B's refund = €10,000 (ignoring the fact Party B is not servicing the debt)
Party B is taking the property value, deducting the Mortgage then applying the ownership per cent; 550 - 400 = 150 @40% = €60,000 (€50k profit).

What is the likely ruling by a judge? (Note; all negotiations have failed so this case is proceeding to court)

Comments greatly appreciated!
I would have thought if you can prove your cash investment then this would be excluded from the settlement and the increase in the value of the property eg €50k (€550k - €500k) should be at most "split" 60/40.
 

NoRegretsCoyote

Registered User
Messages
4,311
- No Ownership Agreement in place as the solicitor at the time confirmed over email that in the event of a separation, one could buy the other out or the property would be sold and investment unwound in the order it was paid (400k back to Bank, 100k back to A, Expenses refunded and remaining profit split - if any)

It's water under the bridge but this was foolish by both parties. If nothing else house prices rise and fall and you should have had some method in place to apportion the gains or losses.


- Property was refurbished; Party A invested 40k, Party B invested 10k. Total Property Value now €550k

Is this carefully documented by way of bank statements and receipts?

When was the purchase made and renovation done?

Finally - are there any children or other financial entanglements?
 

dereko1969

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3,042
Party B never lived in the property - strange. Did Party B pay 40% of the monthly repayments? How long for?
It's a very strange set-up.
 

User321

Registered User
Messages
10
@The Horseman - appreciate your comments

@NoRegretsCoyote - Yes, agreed very poor and incompetent advise from the original solicitor. Purchase Q1 2019, renovation Q2-Q3 2019. Yes, Party A managed the upkeep, renovation, all bills, property expenses etc. with receipts retained. All purchases/ payments made from Party A's personal account. Party B made a contribution of €10k by way of transfer to Party A. No children or entanglements.

@dereko1969 - The plan was for both parties to live in the property but Party B did not move. Party A moved in alone. The full Mortgage has always been paid out of Party A's account (same for insurance, any expense). Party B paid half of the Mortgage for 4 months by way of transfers to Party A.

What do you think the judge would rule on who gets what? I welcome your opinions on the likely outcome
 

_OkGo_

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Messages
361
I don't think anyone can give you an opinion on the likely outcome of a court ruling. You would really need to discuss this with your own solicitor (not necessarily the same one you used previously). However, the ' Land and Conveyancing Act 2009' is probably your best source of info

Mathematically, Party B is just making stuff up and is totally clueless. Realistically it should be divided by the equity held by each party. Assuming the repairs actually added value and it is worth €550k, then party B has contributed 10k plus the principal portion of 4 months of mortgage payments, maybe €1.5k - €2k. What they do not realise is that they have reneged on paying the mortgage for 12 months so they owe party A the interest €200k@3% = €6k ( or whatever the int rate was)

As it stands, party B really only has €6/7k equity in the property.
 

User321

Registered User
Messages
10
I understand, I suppose I'm just looking to get info on anyone's experience of similar cases. Solicitors tend to support their client (in this case, 2 solicitors both saying their client's method is correct) so it's hard to weigh it all up. However your comments are definitely helping!

Party B has rejected all offers (no movement after nearly 12mts) so it is a bizarre situation for them to continue to pay ever increasing legal fees with a profitable return on the table. They are very careful with money so it is a hard one to figure out.

Do others agree with _OkGo_ or are there other factors to consider in favour of Party A or B?

Thanks in advance!
 
Last edited:

dereko1969

Registered User
Messages
3,042
How much can you afford to make them go away? If you look at it as 10k original plus 4 mortgage payments, say that equals 15k, can you afford to give them 20-25k to get lost? There's no point in trying to figure out what a Judge will say, they're a law unto themselves and by the time you get to a judge you'll probably have paid more in legal fees than the go away money.
If you could stretch to 30k it might be painful but would likely ease your stress levels considerably.
 

dereko1969

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3,042
By the way, you're totally in the right on this legally/morally. But it's a failed relationship so right/wrong don't tend to get much traction.
 

_OkGo_

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Messages
361
Solicitors tend to support their client (in this case, 2 solicitors both saying their client's method is correct) so it's hard to weigh it all up

Support and doing their job are 2 different things. If Party A's solicitor cannot provide a clear plan of action to resolve this then maybe they should consider finding another solicitor.

Party B's method is simply absurd. A 500% return on their 10k investment. Their solicitor knows that but is happy for some back and forth to build some fees.

Make one final peace offering but very clearly highlight that Party B's equity currently stands at ~€6k and dropping for every month they refuse to pay the mortgage. After that, go to court and force the sale or transfer of ownership. Within 12 months, Party B will be in negative equity on their portion of the mortgage so unless they make a deal now, they will be in bigger trouble. Part B does not seem to understand that they 'own' a mortgage, not the property...

Part A needs to be willing to sell the property and move somewhere else.

Just my opinion
 

User321

Registered User
Messages
10
Appreciate your comments!

Yes, Party A has put all logic to one side and offered substantial 'go away money' of €25k which is relying on borrowing from friends/ family (+not passing on various joint expenses/ fees) but it had absolutely no effect so after 12mts of this, both Parties are issuing court proceedings.

Your right, Party B is driven by spite, bitterness, etc. but when they are paying out legal fees for that pleasure, there are question marks about where that financial/ legal confidence is coming from. Party A is now using the buy-out money offered to fund the legal process so the settlement Pot is now €22k and will diminish over time to zero.....so both sides roll the dice in Court.

I'm wondering what horse you would back and what odds you would give it?.....place your bets :)
 

NoRegretsCoyote

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4,311
There has been no material change in house prices or reduction in the mortgage over this short period of time.

So for me it should be what you put in you get out.

Once Party B's mortgage is taken over by Party A all that is left is the €10k for renovations less the unpaid mortgage for the last ten months. Party B's logic makes no sense.

I have no idea how a judge would see this. But on the basis of the facts presented Party A looks pretty virtuous. Put in a lot more cash, has paid the mortgage solo, etc.

I'm sure Party B would have their own story. Is Party A living in the house with a new partner by any chance? :)
 

User321

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10
I'll note that as 2 votes/ bets placed backing Party A :)

No new partner or anyone else living in the property, only Party A. However I see where you are coming from....Party B will use every angle possible to paint themselves as a victim. I would like to think this would not overshadow the numbers/ logic.....however I have no experience of what a judge can award (the process they follow).

I do know that there is no obvious angle (nobody cheated, both parties have good salaries, Party B lives with a friend (rent free I'd imagine) but also has a rental property (so not 'homeless'), both parties could show evidence of relationship breakdown, etc.).
 

Sarenco

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7,252
On the basis of what we have been told, I think Party B's solicitor is correct.

If the parties purchased as tenants in common, then this would have been reflected in the purchase deed and the proceeds of any future sale would be split in accordance with the ownership split as reflected in the deed. The amount contributed by each party to the purchase price or any subsequent refurbishment or mortgage payments is simply not relevant - the ownership interest of both parties is reflected in the deed.

Different consideration might apply if the parties were married or a cohabiting couple. But that was not the case here.

IMO Party A would be well advised to get a second opinion before proceeding - this case could end up being very expensive.
 
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NoRegretsCoyote

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If the parties purchased as tenants in common, then this would have been reflected in the purchase deed and the proceeds of any future sale would be split in accordance with the ownership split as reflected in the deed.

If this is the case then it is owned in the ratio Party A:party B 60:40 or €330k:€220k, mortgages and cash put in are irrelevant.

Party B is offering to sell his share for €200k (Party A's mortgage) plus a cash payment of €60k, a total price of €260k.

If it is simply a question of Party B selling his share to Party A, then isn't the fair price €220k?
 

_OkGo_

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361
On the basis of what we have been told, I think Party B's solicitor is correct.

I disagree, their "workings" are still wrong. At best, Party B receives proceeds of 40% of a sale price 550k @40% = €220k. They are then liable for 50% of the mortgage. So at best, Party B stands to receive €20k after mortgage has been repaid. However they have not kept up mortgage payments so really that figure should be diminishing. A court order can be used to account for adjustments to entitlements of each party and as it stands, this would not reflect well on Party B having not contributed to mortgage payments for 12 months.

It should also be highlighted that if the refurbishment did not materially increase the property value, i.e. property is still only worth €500k, Part B should not receive anything from the sale.

IMO Party A would be well advised to get a second opinion before proceeding - this case could end up being very expensive.

This, however, I fully agree with. A second legal opinion is needed.
 

Sarenco

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7,252
If it is simply a question of Party B selling his share to Party A, then isn't the fair price €220k?
Yes but bear in mind that there is a joint mortgage in place over the property.

Party A and Party B are jointly and severally liable for the full amount of the mortgage. It's not a case of Party A and Party B each having a liability for only 50% of the mortgage.

So for the property (or an interest therein) to be sold, the full (joint) mortgage would have to be discharged first.
 

Sarenco

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7,252
A court order can be used to account for adjustments to entitlements of each party and as it stands
That would be true if Party A and Party B were married or a cohabiting couple.

But that's not the case here and therefore the Court would have no jurisdiction to vary the agreement between the parties as reflected in the deed.
 
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