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  • Division of assets

    Hi,

    I live in Alberta and I have recently split up with my common-law partner in which we have lived together for 3 years.

    2 years ago, we begun the process of purchasing a brand new house, she made a down payment of roughly 150,000 for the house. Fast forward 2 years now, we are now debating as to how we split up our assets; so far we have no issue on how to split up furniture and other little things. However with the house, we're butting our head.

    We have built the new house and the title is in both of our name, the mortgage we've made is 68% in her name and 32% in my name. Now, as far as that goes, that's just the mortgage part, not the house. How much we both paid for mortgage payment out of our pocket can't be confirmed as we have joint bank account; most likely 50/50. Once the mortgage is paid off with the sales of the house, how the remaining money is split up is in dispute. She believes that she should get the entire amount, even at profit or loss. I disagree as it's difficult to believe that after 3 years of commitment to this relationship, I walk away with little or nothing.

    How does matter like this get settled with or without going to court?

  • #2
    I would treat it like a business arrangement.

    She invested a significant amount (the 150K down payment).

    You and her both invested into the upkeep, the mortgage, the taxes, and organizing of getting the house built etc.

    She invested more so she should get or lose more.

    The profit and loss is easy = the actual selling value of the house minus the payout of the mortgage, costs to sell the house, but don't count her down payment yet.

    How to divide the profit or loss is by percentage of investment.

    She invested 150K + mortgage payments + taxes + effort
    You invested mortgage payments + taxes + effort

    Things like utilities and other costs that would be incurred by a renter for example do not count as they did nothing for the return on investment.

    You know how much you each paid (or at least can figure it out) to maintain the mortgage and taxes and upkeep.

    So the only unknown is how much value do you assign to the effort of getting the house purchased, the mortgage in place, and the other efforts of getting the house built and eventually sold. Perhaps you can simply determined how much you would have to pay someone to do this work and assign that value to it if you can.

    Once you know how much you each invested, you can then split the profit/loss accordingly. So for example if you assign the mortgage, taxes, effort etc a value of 30K each, then she invested 180K, and you invested 30K, for a total investment of 210K. You get 30/210 (14%) of it and she gets 180/210 (86%) of the profit or loss.

    I think this makes sense (from a business point of view).

    So if the house for example sells for $300K, you pay off the mortgage and the realtor, and you have $220K left, then she gets 189K and you get 31K.

    Comment


    • #3
      Ok, I might live with your "business arrangement"

      Let's consider today's scenario.
      She put in 150k
      Mortgage is 267 (262 currently)
      House was brought for ~412k

      If we sell it, we're most likely going to sell it less than 412k since the housing market is unfavorable. Lets assume we sold it for 400k
      Mortgage paid off - 262k
      Commissions and lawyer fee paid off - ~20k?
      Mortgage Penalty - 13k
      Home equity LOC - 20k
      Remaining monie - 85k

      You're saying that she gets the entire 85k, despite the fact that I paid half of the mortgage?

      If we wait a few years until the housing market becomes favorable again, in the meantime; rent the house to someone else and go our separate ways.
      Let's assume that we sold the house for 430k
      Mortgage paid off - ~252k
      Commissions and lawyer fee paid off - ~20k?
      Mortgage Penalty - ~8k
      Home equity LOC - ~10k
      Remaining monie - ~140k

      Based on your scenario, she walks away with the entire 140k, even if the highest possible house price (maybe 450k) and I pocket 5k change, how's that scenario any better?

      At this point, either way, I'm wondering if there's any point in bothering to stick around and continue to pay my share of the mortgage? Even with the legal document saying that my share of the mortgage is 32% which I can handle, there's still no point in myself bothering to try to get a share of the money that is left over once all the debts and fees are paid for.

      Comment


      • #4
        Wait a minute...

        I forgot about the mortgage. She put in 150K cash, but you BOTH invested by getting a the mortgage, and BOTH took risk with that mortgage.

        SO you need to adjust the amount invested as mentioned in my first post to also include the mortgage to come up with a new ratio on how to divide the investment profit/loss.

        If you were responsible for 32% of the mortgage then you should add 32% of the mortgage to your investment amount, and %68 of the mortgage to her investment amount. Now you said you paid for half the mortgage, so I am not sure if you should add half each or the assigned amount each of the mortgage - it really comes down to risk. So if you say that 32% was assigned to you, then perhaps that is the true amount you risked (and invested)...

        So using your numbers...

        She put in 150K + 267 *.68 = 331K
        You put in 267 * .32 = 85K

        So she owns 331/416 = 80% of the house
        You own 85/416 = 20% of the house

        So that is how you should split the profit or loss.

        Comment


        • #5
          Here is the unfortunate truth...(and i have experienced it) lets say you put all that money into the down payment and you made 100% of EVERYTHING, then the break-up begins....guess what..she is entitled to 50% of assets and you pay her spousal support for the length of half the time you were together.....heres my advice (although because you are a male this wont work, because you have NO RIGHTS)... take half of all assets and make her pay spousal support (assuming she makes more money then you).....sorry but I am a bitter child support payer and have come to grips with the fact that men have no civil rights in the country of canada when it comes to parenting and divorce. my other advice...get a sex change you might have a fighting chance to come out of this break up with your cloths!!!!

          Comment


          • #6
            My understanding of the law is that it makes no difference who paid how much when it comes to the "matrimonial" home - maybe this isn't so with common law?

            When a marriage breaks up, matrimonial property (house, furniture, vehicles - and also debt) is split 50-50. I suggest you speak with a lawyer for some advice. DO NOT hire them to represent you. Just pay the $200 for an hour session and find out exactly what your RIGHTS and OBLIGATIONS are, based on your specific circumstances.

            Another piece of advice is to avoid going to court AT ALL COSTS. If you DO end up in court, I would advise representing yourself. Lawyers are really only interested in themselves and will procrastinate and use the system to drag the case out just as long as they possibly can, 'cause guess what - you're paying them to do it!

            Comment


            • #7
              Wow. What happened to you has no bearing on this discussion. I'm trying to resolve this in a reasonable way and you just walk into this thread with some rambling about getting sex change and suggesting that I go as far as taking half of everything and screw her even more by demanding spousal support.

              Comment


              • #8
                You will see.
                www.canadacourtwatch.com

                have a look....and the sex change was just a joke, I was kidding. I can honestly tell you right now, you are not going to like the way your situation is going to play out. This is a fact. To be fair in my opinion pay her back her downpayment and split the assets. and walk away.

                Comment

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