proving property split - help needed

[rickyg33]

We are trying to show that our property is not in the 'normal' 50/50 equity split. We have a document [copy of HM Land Registry amendment] dating back to 1998, showing that there was a change in the share between myself and my wife.

We have sent a copy to our IP who is looking into an IVA in my name only, but we've been told that this document "wouldn't stand up in court".

Any legal eagles out there know whether a different document is needed?

I'm gobsmacked that a 'legal' document, countersigned by a solicitor, can be considered not to be adequate to prove the share is not 50/50. Don't forget, this is 10 years ago and there should be no implication that we were trying to be underhanded or anything.

[MelanieGiles]

I would not necessarily share the view of your IP, but it is difficult to advise without seeing the paperwork concerned. Has your IP taken his own indpendent legal advice, which is what I would be doing.

[ianmillington]

Very interesting question - the answer depends upon your specific circumstances. The paperwork provides a starting point but the subsequent conduct of the parties will then affect the overall position.

If, to take a very extreme example, you transferred the house to your wife, for no consideration, then even though it was 10 years ago it could be set aside. If throughout the period you were the breadwinner and made all the mortgage payments a good lawyer would drive a coach and horses through the agreement. Under S 423 Insolvency Act 1986, if a transaction was at an undervalue (which given the circumstances I have described it would be) and it was done with a view of putting the asset beyond the reach of creditors (or potential creditors) it is not necessary to even prove insolvency at the time of the transaction. There's no time limit either. The beneficial interest in the house would still be yours, whatever the paperwork says.

On the other hand, if your wife had made all the mortgage payments then it would hold water as the house would be hers.

The middle ground would be that if you have both contributed then 50/50 might actually be the right answer.

Clearly we don't know the full circumstances.You do need to take independent and confidential legal advice on this, as Melanie has pointed out to you.

Ian

[rickyg33]

yes it's clearly not as cut and dried as we thought at first

however, when we met the house was entirely in her name [100%] and I was self-employed for about 5 years - she, effectively, made the mortgage payments and you could say she was 'investing' in the property

by the time we remortgaged to raise some money in 1998, she had a mortgage at, say, £80,000 on a property worth, say, £120,000 and wanted to protect that investment, so she retained 99% stake in the Land Registry amendment

five years later, she stops work but has continued to pay the lions share of the mortgage payment over that 5 year period, so maintaining her status, so to speak, as the bigger stakeholder

it's only over the last 5 years that I was the sole contributor and housing values haven't shot up in the same proportion that they did over the time she was the main contributor

[MelanieGiles]

What was the money you made from the re-mortgage used for? If it was used to pay off your debts, or to invest in your business that your partner had no benefit from, you may also be able to claim marshalling against any potential equity share you may be deemed to eventually have.

[ianmillington]

Hmmm....... The last 5 years seem to potentially throw a spanner in the works if you ask me. I'm not sure that the actual increase/decrease in value during that period is key. Certainly I think you do have a potential interest in the property but wouldn't dream of suggesting to you in an open forum how much that would be. If I did you might act upon it and then try to sue me if I was wrong! We IPs tend to know a bit about many areas of law, just enough to make it a very dangerous thing!

You really do need to be seeking independent legal advice on a confidential basis Ricky. I cannot over-emphasise the confidentiality aspect as the lawyer will need to dissect every bit of information you give so as to properly advise you. Hopefully you can get some free advice but it might cost you a few quid. However, that's far better than debating your position on this forum where the worst case scenario is that you very publicly shoot yourself in the foot. I expect this to be beyond the expertise of the CAB as well.

You need that advice before you proceed with an IVA otherwise I see the potential for much upset.

Hope this helps

Ian

[rickyg33]

understood....

[abc]

Ian's comments are spot on, what I would also recommend that your partner also seeks legal advice and she will need to agree with your proposed Nominee to be party to the IVA.

What you need to remember is that as long as your Nominee and creditors agree to the equity split then there will be no come back. But your creditors may have trouble agreeing that you own 1%. Clearly your Nominee and Creditors will have the benefit of all the facts. However, if you elect to go bankrupt the equity split could be challenged potentially. What you need to be aware of is that if your IVA fails your Supervisor may have to petition for your bankruptcy and again this is where the equity could be challenged.

[ianmillington]

Yes, that's valid. Your partner needs to take legal advice too, preferably independent from you as the lawyer advising you might view him/herself as having a conflict of interest.

Ian

[MelanieGiles]

And can I just endorse the comments of Ian as well. Insolvency Practitioners also have queries like this when they are acting as Trustees in bankruptcy, and have to rely upon legal advice themselves. I have just recovered £40k for the estate in one of my cases by challenging a beneficial interest claim, but there has been a lengthy legal battle to get to that point - and even we could not do that without the benefit of lawyers.

What part of the country do you live in and maybe Ian or I could recommend a firm to you?

[rickyg33]

Cheshire

[MelanieGiles]

I would recommend Mark Davies of DWF lawyers based in Chester. Mark is a very experienced insolvency lawyer, who I am sure would be happy to look at the agreement for you and your partner.

I have attached a web link which you might find of interest.

http://www.dwf.co.uk/

[ianmillington]

I can second that. I think he spends much of his time in Manchester.

Details are:
DWF
Centurion House,
129, Deansgate,
Manchester,
Lancashire
M3 3AA

Tel: 0161 603 5000
Fax: 0161 603 5050

Cheshire is a big place, though. What town, because Stoke or Liverpool might be closer depending on where you are.

Ian

[rickyg33]

Stockport

[ianmillington]

Then Manchester's your nearest city. Mark Davies would be a good choice, although to be fair there are lots of decent insolvency lawyers in Manchester.

There are a couple of firms in Stockport that are of reasonable size but I think for the level of advice you need Manchester would probably be your best bet.

Ian