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  • Cottage equity buyout

    We are separated and still legally own a summer home which we've had for 10 years. We were married 17 years. However I have been banned by my ex from using it since he won't allow me access to it because he wants it. I have then stopped paying into the mortgage since the separation last year since I can't access it. He wants to buy me out less the payments I have not made. Can he do this even though we jointly own it? My name has always been on it.

    I'd like to know if I can keep my name on it but not further contribute to payments and still be entitled to half the equity when I am prepared to finalize our separation agreement which is not yet completed.

  • #2
    So you want your half of the equity and he wants to give it to you in the form of a buyout. What is the issue?

    Your name stays on it until equalization when you transfer it to him alone, whether you are paying or not. You would be entitled to half the equity up until you stopped paying - you wouldn't be entitled to anything past that date as it is his contribution alone.

    What he is offering you is exactly what you have stated above is what you both want, so not sure what the issue is.

    Comment


    • #3
      Originally posted by blinkandimgone View Post
      So you want your half of the equity and he wants to give it to you in the form of a buyout. What is the issue?

      Your name stays on it until equalization when you transfer it to him alone, whether you are paying or not. You would be entitled to half the equity up until you stopped paying - you wouldn't be entitled to anything past that date as it is his contribution alone.

      What he is offering you is exactly what you have stated above is what you both want, so not sure what the issue is.
      What it sounds like is that they own the cottage together. He's decided it's his cottage and she isn't allowed to use it. So, she decided to stop making a contribution towards the mortgage on said property.

      While he wants to buy it out from her, what she would like is for him to continue to pay 100% and when it is sold (to someone other than himself), she'd like 50% of the proceeds. That's how to increase your net worth. Own 50% of something you pay nothing towards and when it's close to paid, cash in that investment.

      Nothing like wanting your cake and eating it too.

      You can't reasonably expect to receive 50% from the sale of a cottage that, since separation, you have refused to pay your 50% share of. Does your separation agreement specify that you were to maintain your share of this property?

      Personally, I believe his proposal to be 100% correct and equitable. 50% equity less the amounts you should have paid, yet didn't.

      Comment


      • #4
        I agree, seems like that's what she's looking for. Neither fair nor reasonable to expect.

        Comment


        • #5
          To me it sounds more like he wants to buy her out now, but she wants to wait until a future date when other financial issues have been resolved - in other words, the cottage buyout and transfer is the "carrot" to get those issues resolved. Given that her share of the equity in the cottage is frozen as of the data she stopped contributing to the mortgage, it probably doesn't make a big financial difference whether he pays out now or later.

          I don't think he can force her to take a buyout now - I believe she can continue to refuse unless he gets an order for the sale of the property. But her equity is tied up until she does agree to the buyout.

          Comment


          • #6
            Thanks for your input. The issue is I CANNOT use it? I'm not interested in being bought out currently, I wish to continue using it and when I want to be bought out later, I want my portion of the equity, not now. I'm only going to pay for something I can use, which I still wish to do. Do you not think that that is fair ? By not allowing me to use it, she is trying to force a buyout immediately.

            Comment


            • #7
              Colour me confused, your original post implied your ex was male, and now you imply your ex is female. What's the real story there?

              Your ex (he/she) is paying for it and could very well get an order for exclusive possession of the property because of it. Which is very fair.

              Your desire to sit on your equity for an unknown and potentially very long period of time, dragging out the entire equalization process for both you and the ex is unreasonable. You are both agreeable to him keeping the property and you keeping your equity, which is fair. Your expectation that this should happen "some day" is unreasonable and will hold up the entire equalization and divorce process.

              Your options are basically accept his buyout or buy him out. So take the buyout and use it to get another place somewhere else that doesn't force the two of you to be very awkwardly linked to each other for an indefinite amount of time.

              What you're currently looking for is basically the equivalent of stopping paying rent on an apartment, but expecting the landlord should still allow you to be there until you "feel like" moving out even though you aren't paying because you had paid at one point in time.

              Comment


              • #8
                So you're willing to resume making payments on the cottage in exchange for resuming access to the cottage? Why not put that to your ex as a proposal? The position you're in right now - you aren't contributing to the costs but you want to use it - is not a strong one.

                Comment


                • #9
                  Originally posted by Splitsville15 View Post
                  Thanks for your input. The issue is I CANNOT use it? I'm not interested in being bought out currently, I wish to continue using it and when I want to be bought out later, I want my portion of the equity, not now. I'm only going to pay for something I can use, which I still wish to do. Do you not think that that is fair ? By not allowing me to use it, she is trying to force a buyout immediately.
                  Was the use of this property not addressed in the separation agreement?

                  Unfortunately, you can't force your ex to hold property in their name because you aren't ready to sell it.

                  And while I agree that only paying for something you use is fair, this isn't a rental or a lease, it's owned.

                  You can't expect to get 50% of his 100% mortgage payments from then until sale. In fact, use of the cottage aside, him paying the 100% of the mortgage and taxes is actually protecting your equity interest in the property for the future.

                  Comment


                  • #10
                    "She" was a typo and we do not have a separation agreement yet.
                    Yes I want to contribute to the payment. All I want is to continue to be able to use it until we establish a formal separation agreement.
                    I'm obviously I will likely have to settle for the equity up until the day I stopped paying and continue to be banned from my own property!

                    Comment


                    • #11
                      I don't believe there's such a thing as a "second matrimonial home". There's one mat home, the other properties are just properties.

                      Occupational rent would only be relevant if the ex was living primarily at the cottage, not if it's a property used for recreation.

                      Comment


                      • #12
                        Actually he had claimed this his primary residence and the only home he owns. The term occupational rent is new to me. So thank you Ontariodaddy
                        I wanted to buy him out but he flipped at that idea. I think know I just want out but this is the one sticking point in completing the separation agreement. We have not done anything through the courts as of yet. All mediation so far.

                        Comment


                        • #13
                          You want it to be done, it's the last part of your separation agreement. So take the buyout and it's done.

                          What you need to understand is that without one of you buying out the other, it never gets done.

                          At this point, you are the one holding up the final agreement and what you're asking for is unreasonable. If it goes to court a judge will agree that you're being unreasonable expecting him to share a second home with you for an indefinite amount of time until you "feel" like actually separating your finances and your life from your ex.

                          You'll spend a tonne of money going to court to fight to be allowed to continue to share a home with your ex husband, and the end result will be the same: it gets sold to someone: you, him or a third party.

                          You've already said you want your equity, he's trying to give it to you.....take it. I can't see how occupational rent would apply given he's been trying to give you your equity and you are the one refusing.

                          Comment


                          • #14
                            If you just want out ... why not take the buyout now? What would you gain by waiting any longer? The amount of money coming to you would be the same (as your share of equity is based on when you stopped making payments), and why would you want to be able to come and go on a property where your ex lives full-time, if that's what the cottage is? Take the buyout, say goodbye to the cottage (sad perhaps, but divorce is sad), and you're done.

                            Comment


                            • #15
                              Originally posted by OntarioDaddy View Post
                              I understand your feelings, but what are you basing this on?

                              In Ontario, you can have more than one matrimonial home which comes with different rules. Occupational rent being one of them.

                              Buyout should be based on the home's value at the time of buyout, not when op stopped paying mortgage... Regardless of ex's wishes to buy you out now. You're both equally entitled to the cottage.
                              They are both equally entitled to the cottage. But, one party has ceased paying their share. So, buy out would be sale price less mortgage/fees, divided in half, with her missed payments deducted from hers and added to his.

                              However, there is argument that because one party stopped paying their share, the other party stepped up and protected BOTH of their assets by paying both shares, and may have more entitlement to either buy the property out, or use it more often.

                              While you can't arbitrarily tell one person they aren't able to use the property - the response should not be stop paying your share. That could be construed as walking away from it.

                              Again, was there no agreement regarding use of this property?

                              Comment

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