Hi guys, not sure I am posting in the right category or not. I have a joint property with my cousin and him and his wife aren't doing great. I was wondering if anybody here would know that if he and his wife split up, would I need to give his wife any money after selling the property or it would be just him paying from his share of the ownership? For example, if the property is valued at $800k and we both have 50% ownership of the house. Would he pay his wife from his share ($400k) or it would be a percentage of the total value of the house? Please help.
Joint Ownership of The House
l2azor on 29/04/2023 - 19:31
Comments
Why don't your cousin both buy out her share, giving her 200k each (or whatever 1/4 value of the house is right now if value has gone up) to keep you and cousin at 50%?
And are there kids? Is the house an "investment property" you are renting out, or is one or both of you living in it?
Nah no kids yet.
I am living in the house at the moment.
Sounds like you, more than your cousin, have an urgent need to sort out her share. If you own 50% so no matter what you wouldn't end up with a minority share then it isn't so urgent, but still if things could get ugly and your cousin can't afford to buy her out then you might think about buying her out and giving your cousin an option in writing to buy back the 1/4 share from you within some timeframe, effectively lending him money for it. Or some such arrangement to cut her out early, assuming she really does have a 50% stake in cousin's share.
Do you own as joint tenants or tenants in common? She is only entitled to a share of his/their assets, so would only have a claim on his share of the house.
So, its tenants in common with 50% ownership between just you and your cousin only?
In your example, if they had a property settlement then his 400K of the house would be on the table.
A more difficult question will be how you might divest yourself of your share as it may be tough to find a buyer.
(My opinion only; seek expert opinion)
I might just sell the house in that case and move on with my share beforehand.
Did you not think about this when you bought?
You make a valid point despite the negs. Even if the cousin manages to save his marriage all it takes is one disagreement and the joint ownership becomes a problem again. This should have never happened in the first place.
Do you think it was her plan all along to do this? Marry him then divorce in the attempt to take his house?
How long have they been married? Maybe they can fix their relationship?
How do you know she doesn't make more money and contributed even more towards the house, or supported the cousin more so cousin could afford his 1/4 of the house?
Fair points there, I don’t know. I was trying to glean more information.
Don't men make more money?
On average. But you ever notice most psychologists and psychiatrists are women these days? Those in clinical practice will be making more than the average man.
@Kongzi: When I studied psychology in first year there are topics that everyone in the school of psychology must take in the massive lecture halls before you specialise later on, regardless of what your specific psychology degree was. And I'd say 95% of the people in that lecture hall were women. Data from 9 years ago suggests that 76.7% of the psychology workforce were female (https://www.myhealthcareer.com.au/psychology/psychology-work…) and that's probably skewed by older psychologists as psychology used to be dominated by males.
Though psychology is a pretty niche profession, and science in general is pretty niche, so probably doesn't significantly alter the average woman's income. But it is an example of the times changing and women dominating professions previously dominated by males.
Why get involved in his issues?
50/50 means, 50/50 … whatever is going on in his private life comes out of his share!
Unless this is a "mates agreement" without legal documentation, in which case, just give the wife everything to avoid the headaches and legal fees ;)
This arrangement was always going to end in tears
would I need to give his wife any money after selling the property or it would be just him paying from his share of the ownership?
You have nothing to do with his wife. The asset is his.
They will both figure out their assets and liabilities. Figure out who gets what percentages of assets less liabilities (eg, 50/50, 60/40, …). Then figure out how they will split the net assets (assets-liabilities). They don't have to split each asset at that exact percentage - only the net assets.
It would be imo hard to value your cousins 50% of the house.
Is it really worth $400k (in any property settlement) in your example if some random (you) owns the other 50%.
I am fairly sure the house can not be sold without your permission.
if the settlement involves her getting a fair share of his ownership,
then a professional valuation needs to be done on the properties and a number will be worked outSure.
But suppose the cousin has no other assets.
How can the cousin's 50% be cashed out (to pay his wife some money) if the OP (who we now know lives in the house) refuses to sell his share?Who would make the OP sell his share?
Probably court order but their divorce lawyers would know
How can the cousin's 50% be cashed out (to pay his wife some money) if the OP (who we now know lives in the house) refuses to sell his share?
I'm not a lawyer, but after looking into this a few year's back (I own a property under joint tenancy) it would be via a court order and then you'd be compelled to sell the property and redistribute the funds accordingly.
@skittlebrau: Well that makes sense for joint tenants as both own the house.
But for tenants in common I’m not so sure how easy it would be to compel a 3rd party (the OP) to sell their 50% share.
I mean why should they? They own their 50% independently.
I am not a lawyer.
@Eeples: I just asked someone in my office who used to be a real estate agent.
A court order can force all joint owners to sell a house regardless of whether the property is under 'tenants in common' or 'joint tenants' ownership.
It may not sound fair, but it's law.
Whatever happens to him has nothing to do with you. You are entitled to your % and that is it.
What if he buys the cousin's share for $1 before the settlement, then sells it back to him for $1 after the settlement?
Won't make any difference… If this strategy worked, the spouse who has access to the bank account would always make money disappear.
This is called Gifting and it is legal but no one in the right mind will do it. Firstly, stamp duty applies on both transactions and it is calculated on Market Value. Secondly, think of it from the cousin's point of view. I sell this to OP for $1 and i pay the stamp duty (because it is my issue so I am willing to fork out the expenses). I now run risk that he doesnt sell this back to me at $1 and ran away with my value of the property.
This situation is worse than splitting the share of the property with the partner. At least OP's cousin is still getting 1/4, assume equal split and no out of pocket stamp duty.
You need a lot of trust with the person you are transacting with and from OPs point of view, there is no benefit for him to do this. The cousin also might refuse to cough up the stamp duty last min and now OP is legally liable to pay this amount.
Thanks for answering guys. It gave me some relief.
properties in your name and your cousin's name only? then your cousin gets his shares and you get yours
your cousin wife settlement is between him and his wife you have no part in it.
I was wondering if anybody here would know that if he and his wife split up
Then you could get together with her and you might even end up with a bigger share of the house.
Or she could take you both to the cleaners and end up with a far bigger share in future if the relationship doesn't work out.
The wife is only entitled to something if they agree or the court orders it.
It has nothing to do with the OP unless she has a claim to the house and the cousin cannot pay her out. In this case you may have to sell.
Advise your cousin to get help to ensure she gets nothing.
They may divide their assets however they want, or potentially the court orders, to form a settlement.
Whatever the ownership looks like once this occurs, OP may be dealing with people who are more interested in the cash, compared with holding an asset, than they have been.
How long have they been married? Does the purchase predate their relationship? If there's a mortgage, she'll get the same percentage of the liability as she gets of the asset. Many women are blind to liabilities. They just see assets. Particularly if they are Gold diggers.
Yes, it would be good to know if there is a mortgage.
It would also be good to know how much each of them put in for the deposit and how much each of them has contributed to the mortgage.
Even though the tenants in common are 50% partners it doesn’t mean they needed to or have to contribute evenly.
I’d say she would be getting 50% of his share guaranteed + if they have kids she could get more, so he can possible expect to basically forfeit his share to her esp if he doesn’t want to give her half of his super