Separating from partner

This is a question for a very good friend of mine.

He is currently in a same sex relationship of 3 years. His partner has become violent - alcoholic, ( in and out of rehab) probably not relevant I know. Very controlling, destroys my friends belongings etc.

His partner bought a property 4 years ago, and my friend moved in with him 3 years ago. My friend pays exactly half the mortgage - direct debit each month which he can prove on bank statements, the Council Tax is in his name, which he pays himself, he also pays half the other utility bills which are in his partners name.

He has contributed half to installing new boiler, updating the property, half of all maintenance issues etc.

Financially, does he have a claim against the property: Ie, is he entitled to any equity which would be left after allowing for the deposit put down by his partner.

Partner bought the flat for £80,000 - put down a deposit of £40,000 50%, flat currently valued at £140,000.

Hope I am explaining myself. Really hope someone can advise me as he is desperate to leave.

Unfortunately he never got a formal co-habiting agreement, only verbal.

Are they married/in a civil partnership or just living together?

Not the same situation but when my partner moved in with me we looked at whether his paying some of the mortgage and running costs etc. would give him a claim on my house. From the information we found (we didn't take paid for legal advice)it looked like his contribution would be considered rent, he was paying to live there rather than accruing any interest in the house especially in the short term.

WYSPECIAL wrote:

Are they married/in a civil partnership or just living together?

No, not married but was considering it initially. Just co-habiting but I understood the arrangement (verbal) was that by him paying half the mortgage on what was only a purchase before he moved in of one year, that he would be entitled to a beneficial interest should the partnership fail.

His partner now wants him to leave with nothing, but friend has no where to go and no savings - not enough for deposit and first months rent anyway, at this stage.

Trouble with a verbal agreement is it's not worth the paper it isn't written on.

Best he can ask for really is some help with a deposit to move on.

From the information provided it sounds like a pretty decent claim under the Trusts of Land and Appointment of Trustees Act.

However, such proceedings are costs-bearing which means that the loser will generally pay the winner's costs as well as their own.

Your friend will have to fund his case (unless he acts as a litigant in person) somehow and hope that he is able to reach a settlement before his legal representative pulls the plug.

The key to these disputes is to make an early offer to settle in monetary terms. For instance, if the property was worth £80k 4 years ago and is now £140k that is a £15k increase per year.

If we assume the increase is linear, the property was purchased exactly 4 years ago and your friend moved in exactly 3 years ago, the equity increased £45k in the last three years. That would be £22.5k each.

The other party is likely to say that half of the property is theirs anyway as they but down a £50k deposit. The mortgaged element of the property was £40k

So, if we talk about the increase in value of the mortgaged element over the last three years, this is £7.5k or £3.75k each per year. This would make your friend's claim around £11.25k.

If the mortgage was a capital repayment mortgage, there would have to be an adjustment for the first year of ownership when the owner was making payments alone and reduced the capital by an amount which would not be carried forward to later payments.

If there is an early redemption penalty, this would increase the mortgage redemption figure if the property had to be sold which would reduce the equity - that would need to be taken into account if the owner was forced to sell or offered a reduced amount based upon not selling and paying off your friend with a sum that took into account the notional early redemption penalty. The same goes for costs of sale and conveyancing charges.

So, I would expect your friend to get, based upon the information provided thus far, about £8k.

As with all forum questions, legal advice should be obtained as small facts can make a big difference e.g. further and subsequent legal charges on a property which would reduce the equity. This situation is highly likely if the owner suffers with alcoholism and has difficulty holding down a job.

Charles

.Charles wrote:

From the information provided it sounds like a pretty decent claim under the Trusts of Land and Appointment of Trustees Act.

However, such proceedings are costs-bearing which means that the loser will generally pay the winner's costs as well as their own.

Your friend will have to fund his case (unless he acts as a litigant in person) somehow and hope that he is able to reach a settlement before his legal representative pulls the plug.

The key to these disputes is to make an early offer to settle in monetary terms. For instance, if the property was worth £80k 4 years ago and is now £140k that is a £15k increase per year.

If we assume the increase is linear, the property was purchased exactly 4 years ago and your friend moved in exactly 3 years ago, the equity increased £45k in the last three years. That would be £22.5k each.

The other party is likely to say that half of the property is theirs anyway as they but down a £50k deposit. The mortgaged element of the property was £40k

So, if we talk about the increase in value of the mortgaged element over the last three years, this is £7.5k or £3.75k each per year. This would make your friend's claim around £11.25k.

If the mortgage was a capital repayment mortgage, there would have to be an adjustment for the first year of ownership when the owner was making payments alone and reduced the capital by an amount which would not be carried forward to later payments.

If there is an early redemption penalty, this would increase the mortgage redemption figure if the property had to be sold which would reduce the equity - that would need to be taken into account if the owner was forced to sell or offered a reduced amount based upon not selling and paying off your friend with a sum that took into account the notional early redemption penalty. The same goes for costs of sale and conveyancing charges.

So, I would expect your friend to get, based upon the information provided thus far, about £8k.

As with all forum questions, legal advice should be obtained as small facts can make a big difference e.g. further and subsequent legal charges on a property which would reduce the equity. This situation is highly likely if the owner suffers with alcoholism and has difficulty holding down a job.

Charles

Thank you Charles, that does clarify it somewhat.

With regard to the other party not holding down a job. That is not the case as he 'works' in his fathers company, as and when he can. Father bank rolls him. Very well off!