Dividing a Home''s Equity

[LGK]

So a good friend of mine broke up with her boyfriend of 12 years. They lived together and had purchased a house in both their names right before they broke up. He moved out about a year ago. Prior to that he made a few fractional contributions to their mortgage payment (as he was unemployed), but not remotely half. They did not have combined finances; my friend has a paper trail to prove she made most of the payments.

She cannot get his name off the mortgage without paying thousands of dollars to the bank- which she simply cannot afford to do at this time. She is quite concerned because he''s been claiming he owns half the house''s equity, and when she sells it, he wants half the money from the sale; he says since she kicked him out, he is forced to pay rent and he wants her to pay that too. While this is pretty obviously ridiculous, she''s still freaked out. While it may come to her having to speak to an attorney- they probably qualified as common-law spouses- I figured I''d ask here for her first. Anybody got any idea if the bank would automatically cut a check for half the sale of the home to him just because his name''s on the title? Even if she can prove she made most of the mortgage payments? TIA

 

[kenny]

It may depend on the laws of their state.

 

[KittyGolightly]

Date: 5/5/2010 4:10:58 PM
Author: kenny
It may depend on the laws of their state.

Yup. And also on things like how they took title to the house. I''d go to an attorney if I were her.

 

[RaiKai]

Date: 5/5/2010 4:25:09 PM
Author: KittyGolightly

Date: 5/5/2010 4:10:58 PM

Author: kenny

It may depend on the laws of their state.

Yup. And also on things like how they took title to the house. I'd go to an attorney if I were her.

Ditto this.

Depends on the common-law legislation, property law, and so on, where you are and so forth. This is a good reason to get a separation agreement done up when you split from a common-law spouse.

Does not matter if she has been paying the payments alone in some cases...he may still be entitled to equity on sale. However, depending where you are, it may not be ALL the equity - it may just be that accumulated until separation (not sale). Anyway, there are lots of variations that vary and depend on various pieces of legislation.

She should not have to pay HIS rent, but in some places she may have to pay occupier's rent for the period of time living in the house. Lots of variables.

And the bank certainly does not care whether she paid the mortgage or he did. They just care they get their money.

She needs to speak to a lawyer where she lives to know what the laws are in her area.

 

[swingirl]

I don''t think it matters who made the mortgage payment. The house belonged to both of them equally and they agreed to share the responsibility. It also doesn''t matter who lived in the house or who got kicked out. I don''t think their personal issues matter to a bank. They are both on the title and mortgage. She definitely needs an attorney who can process all the details according to the state''s laws.

If they bought the house right before they broke up there shouldn''t be too much equity to split.

 

[LGK]

Date: 5/5/2010 4:35:20 PM
Author: swingirl
I don''t think it matters who made the mortgage payment. The house belonged to both of them equally and they agreed to share the responsibility. It also doesn''t matter who lived in the house or who got kicked out. I don''t think their personal issues matter to a bank. They are both on the title and mortgage. She definitely needs an attorney who can process all the details according to the state''s laws.

If they bought the house right before they broke up there shouldn''t be too much equity to split.

Except she probably won''t want to sell for a few years. So there will be some at least.

Thanks for the help. She''s been having a hard time getting answers anywhere else actually, the bank has been pretty difficult she was saying... and I guess it is gonna be a trip to the attorney for her. Thanks guys.

She just reminded me that WA state doesn''t recognize common-law marriage. If that helps at all. I think her first plan is to try to get the bank to waive the fee to take him off the title to just be done with it; I know my bank wrote a bunch of fees into our mortagage that they didn''t necessarily intend to enforce in every circumstance (it''s a commercial-property mortgage, so it did have some... intersesting clauses) so it may be possible...

 

[lightningbug]

Date: 5/5/2010 4:31:43 PM
Author: RaiKai

Date: 5/5/2010 4:25:09 PM

Author: KittyGolightly

Date: 5/5/2010 4:10:58 PM


Author: kenny


It may depend on the laws of their state.

Yup. And also on things like how they took title to the house. I''d go to an attorney if I were her.

Ditto this.


Depends on the common-law legislation, property law, and so on, where you are and so forth. This is a good reason to get a separation agreement done up when you split from a common-law spouse.


Does not matter if she has been paying the payments alone in some cases...he may still be entitled to equity on sale. However, depending where you are, it may not be ALL the equity - it may just be that accumulated until separation (not sale). Anyway, there are lots of variations that vary and depend on various pieces of legislation.


She should not have to pay HIS rent, but in some places she may have to pay occupier''s rent for the period of time living in the house. Lots of variables.


And the bank certainly does not care whether she paid the mortgage or he did. They just care they get their money.


She needs to speak to a lawyer where she lives to know what the laws are in her area.

Ditto speaking with an attorney. There are so many factors here that could affect the outcome (mentioned above), including who made the down payment. If she made 100% of the down payment, then she may be entitled to 100% of the equity on sale, less his documented mortgage contributions (or alternatively, half of the mortgage while he was still living in the home). For this reason, their separation date may also be a factor.

Best of luck to your friend.

 

[Octavia]

She should definitely find a good family or real estate lawyer. Cohabitation rules are complex and trying to figure it out on her own could lead to a lot of unnecessary trouble later on.

 

[Karl_K]

Date: 5/5/2010 5:11:33 PM
Author: Octavia
She should definitely find a good family or real estate lawyer. Cohabitation rules are complex and trying to figure it out on her own could lead to a lot of unnecessary trouble later on.

ditto that
needs to be settled and soon.
the longer it waits the worse the mess

 

[lulu]

I''m assuming there was a down payment. Was the money his, hers or theirs?