Not sure what a lawyer would do [home buyout questions]

In My Humble Opinion
1

If my ex-partner has not had a job since we bought our home, would we still follow normal buyout procedures? I live in the state of Oregon. He made a $10, 000 down payment when we initially bought the house, using his savings. But has refused to work since then, 5 years now. I have been the sole source of income for us both. We are unmarried and have no children.

I am now looking to have him taken off the mortgage, but I question is he due 50% of the equity? Is there a source on when a partner has not contributed income, that they are not owed half the equity? I’m not sure if this is something an attorney would negotiate or if I MUST give my former partner at least 50% as a minimum.

Every source I’ve tried, has either reiterate the formula for figuring out the buyout price or been legal consultation, that ask me to pay for a response only to copy and paste the same information :confused:

Edit The options I’ve been made aware of are refinancing and paying him out or possibly requesting an Assumption with my lender, to have his name taken off the mortgage since I am financially able to support paying for the house. I would really prefer to go to mediation, but without knowing a way for us to civilly negotiate what he is owed. I feel attorneys are my only option. I assume.

2

Basic legal principles:

[ul]
[li]If you own property with a person other than your spouse, you own that property as a tenant in common unless a deed or other document states otherwise.[/li]
[li]A tenant-in-common’s share of a property upon partition is based on the amount contributed to the purchase. [/li]
[li]When a property is purchased with a mortgage, the amount contributed by the tenant in common is equal to the proportion of the down payment plus the amount of debt taken on by that person.[/li][/ul]

Where this gets complicated is how to deal with who went into debt, and who paid the mortgage. That’s why you’re probably not going to get a definitive answer on the internet. A lawyer would need more facts and may well need to know the law of your jurisdiction.

Assuming that both sides agree that you were the one who paid the mortgage, then there is no magic rule that makes a long-term partner a 50% owner of the property, if that’s what you’re asking (though obviously the deed or mortgage or other contract could say otherwise).

[Reported for move to IMHO.]

3

Probably not a good place to look for real legal advice here.

But… if it’s a state where community property is divided 50-50 then the law does not care who contributed what if it’s used by both. After all, if the wife (typical example) devotes herself to raising the children (or keeping the garden pretty) while the husband has made a nice income, then who’s to say what portion of the total value of their life together each has contributed. Basically, an even split is the usual, when “ex-” becomes operative.

If it’s not a community property state, then consult a real lawyer. Oregon is not, but pretty close:

you bought the house together, sounds a lot like joint property. So half his… So he’s entitled to half of the assessed value minus liabilities (i.e. valuation minus mortgage divided by 2) for a value as of the day of the split. Any mortgage paydown since then probably should not count toward the value. However, you may need a lawyer to argue that out.

4

Thanks for the response Richard and sorry I didn’t think was IMHO. But I got what you are saying. I guess a deeper dive with an attorney is what is needed in the end.

I’ve been hesitant cause I didn’t know exactly what terminology I should approach my legal needs with. I was thinking maybe there was a known term for something like this others might know. Thank you

5

Yeah, I should have thought my topic over. I wasn’t looking for legal advice as much as trying to figure out if there was legal jargon for my situation. It seems a hundred paths led me to Assumptions, Nonvations, Deed of Trust, the list goes on. But I do appreciate the responses.

6

Use the Moore-Marsden calculation. It is standard for cases like this and take into account the current and original value of the home, the down payment and how much each contributed to it and who paid what part of the mortgage payments.

7

When you say ex-partner, exactly what do you mean by “partner”? Was there a legal marriage? What?

8

No, not even registered domestic partnership. He is my ex boyfriend, but is on my insurance as domestic partner. But to your reply, no marriage

9

This one:

says:

So you can try to do a calculation - value at dissolution split depending on the ratio of his $10,000 and your 5 years of mortgage calculations; but it’s possible it will simply be considered 50-50. Depends again on lawyers.

10

Moderator Action

Welcome to the SDMB, Gsengineer.

It’s probably not obvious from the forum names and descriptions, but we generally prefer that questions about real world legal issues be posted in our IMHO forum. This makes it a bit more clear that any responses are just the opinions of some online folks and should not be considered the equivalent of professional legal advice.

Any factual responses about the issue are of course still welcome in IMHO.

It’s no biggie. I’ll move the thread for you.

Moving thread from GQ to IMHO.

I have also edited the title to more clearly indicate the topic.

11

Thank you so much. I was looking to see if there was an admin or request I could spot to move it down.

12

In response to your question, “is he due 50% of the equity?”

From a layman’s POV, here are some things you might want to consider just in terms of being fair and practical (in other words, I don’t pretend to know the legalities of the situation). I don’t expect you to actually answer these questions for me, but I think they would be important for considering the situation fairly.

How much is the current equity?

What is your ex’s stance? Have you parted reasonably amicably, or is it a case of no cooperation/communication, or somewhere in between?

Did you also put down cash for the down payment, or was his $10,000 the whole down payment?

Did he pay for other things like utilities or furniture that allowed you to handle the mortgage more easily?

Did he really refuse to work or otherwise contribute to the household (I’m thinking playing video games all day, never doing housework/laundry/maintenance/etc.) in any way, just a total leech, or did he contribute in other ways?

Depending on those issues, I can imagine circumstances where he would be entitled (on a “fairness to someone you once cared about” basis, not legalities) to enough equity that it would be worth it to skip the lawyer fees and the aggravation and just give him half.

If it is a hostile situation (“I’m not signing a DAMN THING!”), that is different.

Also, and maybe this is so obvious I am the only one stupid enough to think it needs to be pointed out, it sounds like what you want to do is get him off the title of the house rather than off the mortgage, although he should require you to refinance the house in your name only as part of the deal. Six of one, half a dozen of the other, I guess, but you also seemed to be asking how to frame the situation in broaching the topic with a lawyer. I don’t think the mortgage company would let you take him off the mortgage without refinancing, and I don’t think you can refinance in your name only if his name is on the title. (I could be wrong.)

You probably already understood that as exceedingly obvious, but just in case.

13

There is a little triangle with an exclamation point in it in the upper right hand corner of every post, which you can use to report posts. The post report will go to all moderators of that forum.

If you are curious, the moderators of each forum are listed at the bottom of the page for that forum’s thread list.

Anyway, again, welcome to the SDMB. We hope that you enjoy your time here.

If you have any further questions about the message board itself, feel free to post your question in the About This Message Board forum.

14

Oh no, I appreciate it all Wellanuff, the situation has many moving parts.
Current equity, tbh is close to 180k.
-I would say our stance is somewhere in between. We are civil majority of the time, but for him to leave and move on, he wants to be paid out. We also still share the same household.
-I did not pout down any cash on the down payment.
-I fully furnished the house and every other bit of maintenance and improvements as we’ve lived her for 5 years. All cost have been on myself. He was not employed at the time of the house purchase, but had money for the down payment from savings.
-His refusal to work was a mix of him assuming the job market wasn’t meeting his value. When asked to obtain a job, he has claimed no success. But has not applied anywhere.
-That part is what a lot of this leaning toward. I don’t want to sale the house and that seems to be the main argument with the attorneys consulting today.

It has been nice to have more talking points to ask about. So thank you for your response. And yes, no matter what route we take, I’d have to get him to sign a quick deed claim, surrender his rights to the house. He wants to leave, but options are becoming clearer. I think with enough information, I can get him to agree to mediation on most of the matter.

15

With that much equity in the house, and from the other aspects of contribution to the household that you described, yeah, if you were my friend I would tell you that I think it would be unreasonable for him to expect 90K. That kind of return would probably be the best investment he will ever make in his life.

If the 10K he put down was key to you guys being able to buy the property at that time, that should be worth some extra consideration.

(The rest of this post is just an exercise to amuse myself to see if I can come up with something arguably fair. You of course will do what your lawyers advise.)

If he is reasonable, something like this should be acceptable:

He should be willing to take out his $10,000 and the principal you have paid from the 180K equity, leaving just the market appreciation portion of the equity. Say you have paid down the loan by 30K.

So that leaves 140K of appreciation. I have no idea what the real figures would be.

So he should be entitled to 80K at this point. (his 10K + 70K (half the appreciation)) . (In allocating the appreciation, I am ignoring the fact that you put in 3x as much capital because of simplicity, the time value of money, and one goal being getting him to agree so he leaves. You get a lot of it back by allocating half the costs (instead of a lesser percentage) to him in the next step.)

Then subtract half of all of the last five years of interest payments and property taxes and insurance payments and improvements from the 80K as his share of the cost of ownership for the last five years. Lets just call that half of the costs 50K.

Leaving 30K for him as reasonable, based on my made up numbers.

If he complains, you might point out that (based on my made up numbers), you have paid $130,000 (30K in principal and 100K in interest, taxes, etc.) out of pocket to get to this point, while he only paid $10,000. You are both getting $20K each of the left over market appreciation. 180K - 130K - 10K = 40K

In other words, he should be willing to reimburse you for half of the cost of ownership to this point from his share of the equity.

But like I said, I have no idea what he is legally entitled to. But $90K seems grossly unfair to you.

16

So have you been supporting him for five years? That would take a cut out of what would be considered “his share” if it were up to me, but the law often is different.

At any rate, I would assume that the appreciation would be divided up the the percentage of the equity in the house. If you have provided 75% of the equity, you deserve 75% of the value of the appreciation.

Houses don’t need to be sold for the value to be decided in buying someone out. We just went through this when looking at the value of my mother’s property for her will. You just need to agree to the type of appraisal.

17

Not an expert; though I have a mortgage with a partner to whom I am not married.

I think that, regardless of amount contributed by to the down payment, and regardless of who cut the checks for the mortgage, if you didn’t work out a specific division at the time you took the title, he is entitled to 50%.

You are probably Tenants in Common (this would have been one of the things you signed off on with your lawyers when you bought the house).

18

To clarify: removing him from the mortgage is (sort of) a separate issue from buying out his equity.

You can’t simply remove him from the mortgage; you’d have to refinance into a new mortgage in your name only.

The new mortgage company, understandably, will probably refuse to issue such a mortgage unless a quitclaim is signed by the other party.

You could pay out his 50% (or whatever… and I’d bet it’s a lot less than 50% given what you said) in return for his signing a quitclaim to the property, but he’d be foolish to quitclaim unless you refinance at the same time because he could be held liable if you stop making the payments.

You may want to talk to a lawyer re property rights in a domestic partnership situation in your state. Even if it’s not a legally-recognized DP relationship, the fact that you’ve listed him on your insurance, and have supported him for 5 years, may establish a de facto DP and he might use that to try to get more of the equity, or “palimony”, or some such.