Selling A House To A Relative

[Ric.ror]

My sisters son and his girlfriend have decided to end their relationship. She and their child are currently still living in the house he owns. If he was to sell the house to my sister for the amount he owes on it now would that be possible and would it mean that his ex girlfriend has no claim on the property as he would not have any equity in it?
Hope this makes sense

[woofgang]

I can't believe it would be that easy.....unless there is no equity in the house at all, ie its only worth the amount of the mortgage, in effect he would be giving money to his sister instead of to the mother of his child.

[Buenchico]

The (ex) girlfriend might be able to make a claim on part of the property (or on the money received from its sale), especially if her income has been used, directly or indirectly, to pay towards the mortgage. (e.g. if all of the mortgage repayments have come from your nephew's bank account but she's paid all /most of the food bills, etc, then she'll have indirectly have been paying money towards the mortgage through reducing your nephew's other outgoings).

It's complicated and, unless the couple can reach an amicable agreement, they might need to seek professional advice. This is a good starting point:
https://www.moneyadviceservice.org.uk/en/articles/how-to-sort-out-your-finances-on-separation

[JJ109]

The ex-girlfriend will almost certainly have an "equitable interest" in the house that will rank after the mortgagor, but before any other institutions for subsequent lending.

If he was to sell the house at below market value she could almost certainly object unless her equitable interest was also discharged.

I advise you to see a solicitor as it could get very messy.

[Tilly2]

I don't know if it can be done or not but it seems like a messy way to deal with the mother of his child and his child.

[Ric.ror]

There are no winners in this situation and I know my nephew will look after his child but the mother has had financial problems (of her own making) before and he had to extend his mortgage so a third party guarantee to a loan she took out (and defaulted on) did not have to pay.

[andres]

When there is a child involved he might have to let her live there until the child is sixteen.

[Ric.ror]

Tilly - if you knew my own personal background you would know I have very very little sympathy for men who don’t contribute to their families

[Ric.ror]

Andres - even if the house were to be sold?

[andy-hughes]

Always get a solicitor for each side - the fees justify the avoidance of acrimony, and further fees down the line.

[Rockrose]

If he was selling the house to avoid his ex partner claiming a stake the court will not look kindly on it.

[Ric.ror]

Out if interested what % would the courts consider her interest to be?
I’m guessing he wouldn’t mind paying it if it was to be put in trust for his child but his partner is amazingly bad with money and more than capable of getting herself into serious debt

[hc4361]

How long have they been living together, how old is the child?

If the courts do decide that the child should live in the house it will be until he/she is 18, not 16

[Ric.ror]

She moved in when she had the child who is 7

[hc4361]

"If you cannot establish any interest in the property, but you have children, then you may be able to apply on the children's behalf for a share of the property. This application can be made under the Children Act 1989. Orders can be made against your partner. This includes orders to transfer the property from your partner to you as the parent who is caring for the child or children.

The property will be held by you for the benefit of the child / children or transferred to the child / children directly, this can include a transfer of a tenancy. (The children can only hold a property in their name if they are over 18.)

There is one way in which you as part of an unmarried couple might have the same protection in financial disputes as married couples. Under the Law Reform (Miscellaneous Provisions) Act 1970 an engaged couple who separate will have the protection of any law which relates to the property rights of husband and wives. All you need to show is that there was an "agreement to marry" and that this agreement has been broken."

https://www.compactlaw.co.uk/free-legal-information/relationships-family-law/unmarried-couples.html

[Ric.ror]

I should mention that the property is too small with the child’s bedroom not being a proper bedroom at all

[Prudie]

"sell the house to my sister for the amount he owes on it" if that's what you mean then that isn't selling it to your sister it's transferring the mortgage to her which is different and the mortgage lender would have a lot to say on it. I agree that professional advice is needed, he will undoubtedly be responsible for maintaining the child and possibly her.

[Ric.ror]

My sister would pay cash

[andres]

As hc4631 says the child will probably have to be 18. I am going back a few years to when I knew someone in a similar situation.

[Prudie]

But that's irrelevant, the house will have a mortgage on it currently. It will have to be paid off (which may incur a penalty for doing so early) and formally sold. If your sister gave me what's outstanding on my mortgage and I gave that to the Halifax it wouldn't make it hers.

[AuntLydia]

Your Nephew would have to pay the mortgage off first using your sisters money. This would leave him a house with no lien on the Title. He could then could transfer the Title Deeds into his sisters name for any sum he wished, even a pound or even gift it ( tax implications here)

Then your sister would own a house with a sitting tenant in it who might not want to budge under the circumstances. Your nephew will
now have no house but no mortgage. He will have to pay maintenance to his ex partner and she may be able to claim a sum in lieu of the house 'sale' but this is a grey area and I strongly suggest seeking advice from Solicitor before proceeding.