# Advice re: Mortgage/property division



## EmilyB (6 Jun 2006)

Hi everyone

I would really appreciate a fresh view on this issue. 

I live with my boyfriend in his house. I put €10,000 into his house for reburbishment. This is considered our home. The relationship is long term. The mortgage on this is low at €50k with the house worth about €350k. 

I sold my own house to move in with boyfriend which meant a move to a new area and new job etc. I have just closed on a new house and have this rented out. Rent doesn't cover mortgage and the excess is about the same as the repayments on boyfriends house. House worth about €260K with a mortgage of €198K 

Problem? I am living in and maintaining his house. If there is a problem with the house we both pay half and sort it out. His house is older than mine and needs maintenance and work done to it. Mine is new and needs no attention at all but needs attention from a tennants point of view and all that entails. 

How can we both have an interest in each others houses that is fair? 

We have both been through a bad nasty break up each in the past and are trying to guard against the same again by sorting out the financial side now but we can't come to an agreement. 

This is how I want to do it: 

We have both properties valued now and in the event of a break up we get back anything we put in (i.e. me the €10k, plus half mortgage repayments paid on both sides) plus half the increase in the value of each property from the date of vaulation to date of breakup. 

Problem then is the rent. I don't want boyfriend to benefit from this becasue if I lived in the house I would rent out two rooms and make the same rent.

Any ideas? views? opinions? 

This is starting to get the better of us! 

Thanks in advance 

Emily


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## EmilyB (6 Jun 2006)

The main issue here now seems to be the rent on my house. 

I have it rented out and my partner wants 50% of the rent. 

Am I being unreasonable when I say no? I am happy for him to get back anything he puts in plus half the increase in the value of the property but nothing from the rent.  

Reason? I would get the same rent if I lived in one room and rented out the others. So if I was living there I would still rent it out. 

His argument is that I can only rent it out because I am living with him. 

Any opinions welcome. 

Thanks

Emily


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## elcato (6 Jun 2006)

Did you not say that the current rent does not cover all the costs ? In which case if he wants half he needs to 're-invest' it into the property. Surely he should be looking for half of any profit which in this case is nil (or indeed negative).


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## MugsGame (6 Jun 2006)

If your investment property is costing you money, why do you want to keep it? Why not sell it, which would solve your disagreement over sharing the rent?


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## MOB (7 Jun 2006)

"I would get the same rent if I lived in one room and rented out the others. So if I was living there I would still rent it out. "

I can see where you are coming from Emily, but consider this:

1.  If you were not in your boyfriend's house, he likewise might consider letting out rooms; by dedicating his house to being a home, he is foregoing rent.   This opportunity cost is a real cost.   It might be easier if you simply paid a figure (approximating to market rent) into his house maintenance kitty.

2.  When you pay half of the cost of doing jobs in your boyfriends house, it seems to me that you are, in reality, simply paying half of the cost of living in the home which you share.  This seems fair.  I don't think that your payment toward what might be called "operating costs" should entitle you to anything back in the event of a breakup.

3. The situation is different in respect of what you might call capital expenditure;  if you pay half of a new kitchen, or replacement windows, or such like, then on a break-up, it would seem fair to give you back this money, indexed.

You are not unreasonable to refuse your boyfriend 50% of your rent;  but you need to acknowledge that you are getting something of financial value (i.e. accomodation) from him, and that it might perhaps not be reasonable for you to expect to share in the value (or the increase in value) of his home as of right.

To be honest, it sounds to me like a situation where - instead of trying to reach agreement on how to share these property assets - you might be better keeping assets quite separate for the moment.   If the relationship progresses and endures, then one day these issues will seem quite small.


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## EmilyB (7 Jun 2006)

MOB 

Thank you for your mail you are the first to at least understand the issue. 

I can see how it would be easier to keep everything seperate however it is me who puts the work and effort into his house and with no interest in that house in the event of a break up he gets the financial gain for that work and effort.  e.g. last summer I painted the house and boundery walls. It took me the whole summer. This summer I will turn the 1/2 acre green patch into a proper garden. These two things increase the value and saleability of the house.  Its not a cost I have an invoice to show and I think it goes beyond the cost of living. 

Also if we keep it seperate he says he will charge me 'rent'. I will not pay 'rent' when I have two properties of my own. If he wants me to pay rent I will move out back to my own house and he is not happy with this.  

I have offered to take the tenants out of the house and have no rent to consider. Each pay half of everything and in the event of a break up split it down the middle but my partner is not willing to do this and wants nothing to do with my house unless I have tenants in it. 

I am at a loss and there seems to be no compromise. I have offered 25% of the rent to no avail. 

If I am being unresonable please someone tell me becasue right now I am so confused.  

This has turned into an argument that is not ending. 

Emily


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## Mel (7 Jun 2006)

Emily, 
I have PM'd you.


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## ClubMan (7 Jun 2006)

Mel said:
			
		

> Emily,
> I have PM'd you.


 Why?


			
				EmilyB said:
			
		

> This has turned into an argument that is not ending.


Sounds to me like you would be both better off living separately in your respective properties seeing that any sort of accommodation doesn't seem possible on this shared assets issue.


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## RainyDay (7 Jun 2006)

EmilyB said:
			
		

> I have just closed on a new house and have this rented out. Rent doesn't cover mortgage and the excess is about the same as the repayments on boyfriends house. House worth about €260K with a mortgage of €198K


I presume you've taken your tax liability into account on the rented property? If not, you're storing up trouble for your future.


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## Mel (8 Jun 2006)

ClubMan said:
			
		

> Why?


 
Why on earth _not_? 
Why provide a pm service if you then question people who use it?


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## ClubMan (8 Jun 2006)

I was just wondering why a _PM _rather than a post in public especially when there was no preceding discussion about why this might be in order. Don't get your knickers in a twist. I don't care if you _PM _others (as long as they don't mind either). I was just curious as to why this was necessary in this case. If you don't want to clarify then don't bother.


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## EmilyB (8 Jun 2006)

QUOTE: "Sounds to me like you would be both better off living separately in your respective properties seeing that any sort of accommodation doesn't seem possible on this shared assets issue."

Clubman 

Thank you for your unhelpful feedback on my query. Stating the obvious is unnecessary. We are effectively putting in place a partnership agreement and I was merely seeking advise and comments on how best to overcome the problems we have come up against. 

Also who PM's me on this site is not your concern neither is the cotent of such a PM! 

Emily


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## EmilyB (8 Jun 2006)

RainyDay said:
			
		

> I presume you've taken your tax liability into account on the rented property? If not, you're storing up trouble for your future.


 
Rainyday 

This is nothing to do with the issue, whether I have taken my tax liability into account is my concern along with that of my solicitor and accountant both of which are very capable of looking after these details on my behalf. 

Emily


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## ClubMan (8 Jun 2006)

EmilyB said:
			
		

> Thank you for your unhelpful feedback on my query.


 Not sure how you reckon it was unhelpful. Living separately would obviously solve many of the arguments, is a real option and you have even mentioned it yourself above as a possibility.


			
				EmilyB said:
			
		

> I can see how it would be easier to keep everything seperate
> 
> ...
> 
> ...





> Stating the obvious is unnecessary.


 As I have said before, very often what may seem obvious to some may not be to others - in particular the people who ask questions on _AAM_. Better to state the obvious than to assume that somebody is aware of a particular issue. If it's obvious to the original poster then no harm done. Unless they feel the need to make a big issue of it of course.


> Also who PM's me on this site is not your concern neither is the cotent of such a PM!


 Fair enough. I was just curious why somebody who had not participated in the conversation so far would feel the need to _PM _the original poster and then post here that they did so (since the recipient will be alerted to the fact that there is a _PM _anyway by email and on logging onto _AAM _next time). As a moderator I am generally wary of people who are not long time established posters taking the discussion offline and contacting people by _PM/email_ given the potential for problems.


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## RainyDay (8 Jun 2006)

EmilyB said:
			
		

> Rainyday
> 
> This is nothing to do with the issue, whether I have taken my tax liability into account is my concern along with that of my solicitor and accountant both of which are very capable of looking after these details on my behalf.
> 
> Emily


If you are making decisions based on cash flow "I have just closed on a new house and have this rented out. Rent doesn't cover mortgage and the excess is about the same as the repayments on boyfriends house" without taking the tax into account, it is very much to do with the issue.


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## terrysgirl33 (9 Jun 2006)

If you are a serious couple, get married and sort out your finances as a couple.  (I'm saying this because being married makes a big difference legaly)  Decide together if having two (or three) houses makes sense for you as a family, or whether you are better off selling the extra houses.

If you are not planning on getting married, don't combine your finances.  Pay your boyfriend rent, and accept that you can't afford this house that you have bought, figure out some way of paying the mortgage as the rent isn't enough to cover it.

I realise you have done work on your boyfriends house, but why did you do that?  You have no (financial) interest in that house and you were wasting your time.


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## dweller (20 Jun 2006)

I agree with that.He should look after his own interests.If I were you I wouldn't bother doing any work on his house.It's not your problem and you're a bigger fool to do it.Then things will not be confusing.


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## Persius (11 Jul 2006)

I've read on other threads in this forum (and elsewhere) that you generally don't get your money back on resale for improvements to the house. So if it cost you €5,000 to do up the back garden, this may only add €2,000 to the potential resale value of the house.

Considering how complicated the whole thing sounds, seperate finances seems the best to me. You rent from him for a fixed rate. He pays for any maintenance/improvements to the house - as a tenant you're not liable for this, and shouldn't be expected to pay it.


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