I bought my house in 2007 right at the peak of the boom for €550,000 with my now ex-girlfriend. Shortly after 2007, she was made redundant and also wanted a baby. We were a cohabitant LGBT couple.
I was not keen on having a child for several reasons – one being it was not affordable based on our financial situation at the time but also because I had no legal status on her child. She proceeded to have treatment from her redundancy money and got pregnant. In 2011, she had a baby at which point our relationship was very much over but we remained living in the house as the negative equity was so big.
In 2013, she vacated the property when I was at work and has since refused to engage over any form of payment towards our debt, including mortgage policies and tax, for close to four years now.
I have remained living in the home and have paid all the debt and taxes owing and any repairs etc. The property is still in negative equity but coming close to breaking even on what’s owed on the mortgage.
I recently received a solicitor’s letter demanding a large sum of money be paid to her as she wants the money she put in at the beginning to buy the house, such as deposit etc, back. If I want to remain living in the house, it says I must remove her name from the house.
I have been working with the bank for years to resolve this but I don’t qualify to own all the debt in their eyes I guess. They would prefer to keep her on the loan.
My solicitor tells me I should sell and carry the debt just to be free of her but I feel very hard done by as she has just waked away and carried on life with new cars and holidays. Meanwhile I have really struggled with paying everything. You might wonder why I did this but I needed to protect my credit rating for my job which I love.
Any advice? I really want to stay in my home but I am feeling hopeless as I’m coming up against brick walls each time. I’m not in arrears and always paid on time.
Ms BL, Dublin
You find yourself in a really difficult position. Broken relationships lead to very complicated issues when it comes to mortgages and it is clearly not helped when both parties struggle to communicate on any effort to tidy up their affairs.
The fact that your home is still in negative equity only adds to the complexity.
I note obviously that you have taken legal advice, which is clearly a sensible thing to do , and it is important that you realise what I offer is consumer advice. I am not qualified to provide or contest legal advice.
There are several things you do need to consider here and the best course of action is determined by your position on these. As it stands, I understand that your over-riding concern – apart from your desire to continue living in your current home – is that you do nothing to damage your credit rating which you need to protect for your job.
That clearly colours any advice you would get – from me or from your solicitor – because the price you would likely pay for asserting your rights over the property debt and ownership seem certain to include an impaired credit rating.
As joint owners of the property and in the absence of any agreement to the contrary, you are both liable for the mortgage and the costs of running the home, including property tax and maintenance/repair costs. It appears your former partner has reneged on this responsibility since she left the home four years ago. That, technically, is a debt she owes you.
Then there is the lender. All the bank cares about, reasonably enough, is that it gets the money it lent repaid in line with the terms and conditions to which you both signed up.
Solicitors’ letters are most unwelcome and always raise the odds in these discussions but what I am unclear about is whether your former partner is seeking just her initial investment in the property and the removal of her name from the deeds – or whether she is demanding her half share of the sale proceeds of the property.
If it is the former, then you need either your current lender or another lender to allow you, with your perfect credit rating and strong repayment and employment history, to assume the full outstanding debt on the property.
You say your current lender is unwilling to countenance this but it may be worth your while checking alternatives, especially given the fairly rapidly rising price of property in Dublin.
If, however, she wants her half-share of the current value, then you are stuck with selling anyway. But even this is not straightforward. The property is still, albeit only slightly, in negative equity and the bank is unlikely to give its permission for a sale without having arrangements in place to meet any shortfall.
As your former partner is looking for a payout rather than a bill, it seems the only way you will secure approval to sell is by committing to meeting any shortfall yourself.
Share of shortfall
Is this fair? Of course not. Ideally, your former partner should be hit for the four years of mortgage payments she failed to make as well as her share of any shortfall on any eventual sale. But, especially if she is still out of work, this sounds impractical. And, anyway, it appears she is looking for money out of the property not the other way around.
Still, she is looking for payment and, without some agreement with the lender, there will be no sale and no payment so there is some onus on her to adopt a more reasonable approach.
I fear the end result will be the forced sale of the property and, given the primacy of your concern about your credit rating, it may well be that you have to swallow hard and accept responsibilty for the outstanding debt due to the negative equity. From your former partner’s point of view though, if there is no net gain on the sale of your jointly owned property, I fail to see how she would be entitled to any payment at all.
I certainly don’t see how, legally, she could force a situation where you assume the loss on the transaction jointly and freely entered into by both of you, and are forced to repay her money invested by her in the loss-making deal. Perhaps you should talk again with your solicitor to ensure your former partner is fully aware that her only hope of a payment is to allow you remain in situ at least until a sale of the property is yielding a return after allowing for expenses.
Send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice.
