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Unmarried property dispute

17 December 2010

This case involved an unmarried couple who had a child together. Our client had been living with her boyfriend for ten years during which time their son was born.  

Their house was owned solely by him and worth approximately £240,000 with a mortgage of £100,000. He bought the house with the proceeds of his previous property before they met. Once their relationship was established our client paid a lump sum of £18,000 from a legacy to her boyfriend and he reduced the mortgage to the figure of £100,000 above. They shared the household expenses.  

During their relationship, they bought a ‘buy to let’ property in joint names for £150,000. Our client did the property up herself, painting and decorating it, paying for a new window, making curtains and planting up the garden with shrubs and trees. By the time the tenants moved in the value had escalated to £175,000. They had a mortgage on the property for £150,000 at a time when 100% mortgages were easily obtainable.

However, the tenants did not prove to be good tenants and our client constantly had to liaise with the letting company, threaten them with legal action for not carrying out inspections or obtaining the rent. In the end she decided to manage the property herself. She did a good job, again doing up the property once more, improving the flooring and sanding down all the woodwork and attending to the garden and decoration once again. New tenants were found who were reliable. The value of the property now was nearer £190,000. The rent paid the mortgage.

The parties then separated and the girlfriend came to us for advice.

We placed a Restriction against the property which was registered at the Land Registry.

We then sent the boyfriend a letter before action asking him for our client’s £18,000 back plus half the proceeds of the sale of the rented property once the tenancy had terminated. We stated he should seek independent legal advice and if we heard nothing within the next 21 days we would be issuing a claim form at Northampton County Court for an unspecified amount to include costs and interest on the claim and the costs.

We duly heard back from solicitors representing the boyfriend stating the £18,000 had been a gift and offering less than half of the equity in the rented property on the basis the loan had only been able to be obtained on it owing to his income and assets.

The offer was 1/3 of the equity after redemption of mortgage, agents fees etc.

We issued proceedings in the ‘fast track’ at Northampton County Court pursuant to the Civil Procedure Rules where the case from start to finish takes 30 weeks. This was for our client’s money, and for the whole house that was the buy to let to be transferred to her.  

The case settled during litigation on the basis that our client would receive the £18,000 and the entirety of the rental property.