Does the $ amount of renovations make a difference?

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Onceagain

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I have been reading through the forums for awhile, and have found some great answers to questions I have, I guess now I am just looking for some clarification.

I have just ended a common-law relationship. We were together 5 years, and have been separate 1 month. We maintained separate living places for the first 3.5 yrs, however during that time, he was paying for renovations on my home. He finally moved in May 07 and moved out again Dec 08. I owned the home going into the relationship, but had his name put on the deed 2.5 yrs into the relationship due mainly to the renovations he was paying for. I did not ask him to do or pay for the renovations, it was his own undertaking as in his words "The house is a wreck". Central Air was added (loan is in his name) solely for him, I could live without it! At no point during the renovations did we discuss any type of payback for the money being spent, but I guess that's why I had his name put on the deed, feeling that I owed him something. He kept all receipts for the renovations, and up to this point has not turned over any copies of them even though I have asked to see them. So I don't have an exact dollar figure, but I am guessing $25k.

So, obviously, my question is, is he still only entitled to 1/2 the increase in value of the house from the time we were together until separation, or will the amount of money he spent on renovations have any affect? Although he moved in May 07, it was not until Sept 07 that he begain contributing any mortgage payments, or other day to day bills, other than the truck lease which he paid for since Dec 06. From Sept 07 until he moved out, he may have contributed 50% to the mortgage, and he paid for 2 bills both of which were due every 2 months, as well as groceries from time to time. Other than that, all other bills were paid for by me ie, Heat and Hydro, cable etc.

He is considering his payment of the renovations an investment in the house, and is expecting to receive back all he put into it. The increase in value of the house I don't expect to be more than $5,000 in the 5 years, I live in a small town which does not have huge increases in value like bigger cities.

I hope this isn't too long and boring:rolleyes:, just trying to provide as much information as I can so if anyone is interested in providing an opinion, it would be an educated one!!
Thanks so much in advance...
 
I could be way off (if I am I will soon be corrected) but I believe as co-tenents or rather co-owners, you each own 50% of the current value of the home, regardless of who put what, when, how or for how long each has been on title. Unless of course there was an written agreement at time you put the other person on title. This is my presumption and understanding hopefully others will contradict me or agree shortly.

Good Luck!
 
Thanks for your reply Today.
I picked this quote out of another posting somewhere in the Common-law Forum from Dadtotheend.

"Common-law couples are definitely treated differently than married couples when it comes to the marital home. Common law couples only have to split the increase in equity over the time they were together, not the entire equity at separtion as with married couples. '"
Even though we only lived together for 18 months or so and that in itself is not Common-Law in Ontario, I understand a court could interpret the fact he paid for renovations on the house while living in separate residences to mean we were actually common-law.
I also understand that the fact that I did not ask him to do the renovations is irrelevant in terms of unjust enrichement, although I don't think an increase in value of $5000 really is considered unjust enrichement.

There was no written agreement whatsoever when his name was added to the deed, foolishly enough the assumption was the relationship was going to be long term ( my foolishness!!)
I am seeing a lawyer next week, he has papers in the mail for me, not sure yet what they are. Expecting either a notice from his lawyer, or a civil action for the money put into the house.

Anyways, thanks for letting me babble, and try to get my thoughts straight!!

I am grateful for any comments made, as I try to figure out just where I stand and how to approach this situation!
 
Dad tooo is a great source of info, very dedicated to helping others here. Unfortunatley with out understanding exactly what your agreement was in writing with your then partner it may be difficult to offer proper advice. I can say this.....If you added your partener to the ownership of home. then possibly you may have given him half the value of home.

Meaning that the courts will not care who put reno dollors into home, the home is registerd in two names therefore the value is half and half minus debt towards assett (house).

He will not be able to ask for his investment but at same time and perhaps worse he may be able to ask for 50% of market value since he is listed on title. No fight about who put what into house, simply sell and slpit profit left over....period
 
Presumably he was put on the mortgage as well as the deed at the same time. If so you gave him half the equity (value of house minus mortgage amount owing) at that time.

What was the equity when you put him on title?

If it was more than your guess on the value of the renos he paid - $25K including (his?) labour then you would appear to have gifted him some money. If the equity at the time you added him on title was reasonably close to the value of the renos he contributed, then you would appear to be even-Steven, at least not worth litigating about.

PS Thank you for your comment, today.
 
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Thanks both of you for your opinions.

My partner is not on the mortgage as he was not working at the time of renewal and the bank would only put the mortgage in my name. He did however have money in the bank from closing his buisness it's not simply that he was unemployed.
At that time the equity would have been maybe $20K, obviously need to find that out specificallly, as well as the equity as of Dec 2008.
I would prefer to not sell the house at this point, I have 2 children (my own, not his) and this is the only house they have ever known, other than their dads apt. And with the market the way it is today, who knows what one might actually get!! My mortgage is also lower than the rental of most apts. The kids are 8 and 10, and have been through enough at this point in their young lives.
Would I have the opportunity to stay in the home with the kids and be able to payout his equity either at time of sale, whenever that may be down the road, or perhaps refinancing is the way to go.....

After reading some past posts, I feel rather foolish in that we are not talking huge amounts of money here, but they are large amounts to me. I don't make that much, but I am able to make ends meet, feed the kids and have pizza once a week!! :)

Thanks again for your comments
 
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So nowI have another question, involving market value and equity.

I received the letter from his lawyer today. In a nutshell, the proposal is the property be appraised and I pay him one-half of the appraised value, or the property is sold , and I would assume the proceeds would be split, although it does not stipulate that in the letter.

Assuming the house is valued at 110,000, does he get half of that, or half of what is left after the mortgage is subtracted. His name is not on the mortgage, only on the deed, so I fear I know what the answer is, and probably won't like it.
His lawyer is telling me as joint owner of the property, he would be entitled to an Order for sale as a matter of right, and if I don't cooperate, a judge would order the property sold, and that if I take that route, I would be required to pay his legal fees.

Again, I do see a lawyer on Tuesday, and supposedly she is very good when it comes to family law, and I hope his lawyer is just playing hard ball. ARGHHHH!!! Can't wait until Tuesday. I really dont want to be forced to sell this house for the sake of my kids, but ther is no way I would be able to add an additional 55,000 to my mortgage.

I feel damned if I do and damned if I don't. Either put up with the drinking binges and unacceptable method of dealing with me and the kids, or lose your house....great options!!
 
Yes, the lawyer is playing hardball trying to intimidate you into settling. My ex left the house and she had her lawyer continue to send me letters for months and months requiring that the house be put on the market. She did this because the kids were still here and she wanted to uproot them from the only home they have ever known to strengthen her custody argument.

There's a hardly any chance that a judge will order the sale when the kids live there. They are making baseless threats. It must anger and frustrate you that they would be so prickish as to do that. Stay calm and rational - don't fall into a trap and respond with emotion. Just say that the kids need the home and that you don't agree with the sale.

Regarding him not being on the mortgage, I would be a little scared on that too, but I wouldn't worry. In the end you will be staying in that house and nothing is going to happen to it for as long as you want. You can wait him out for many years and not sell the house. Eventually you will settle and the fair outcome will prevail i.e. that the numbers will be calculated as if he was placed on the mortgage at the same time as he was placed on title.

BTW, I don't understand why the bank consented to having him on title but not the mortgage.
 
Thanks again Dad for your reply....you have made me feel a little better, hopefully I can get through the weekend now until Tuesday without bursting into tears!!
As far as the bank allowing him to be on the Title but not the mortgage, the bank had nothing to do with the transfer. We had a lawyer do a transfer, eh voila, it was done.
Today, in reference to your question regarding the agreement when the transfer was done, while there is nothing in writting, the line of thinking was that as he was doing the renovations on the house, his name should go on the Deed. The plan was for him to move in, which would allow me to work less hours so I could spend more time with my kids...my son has behavioural problems which really merited me being home with him after school and not working stupid night shifts. Of course by the time he moved in he was unemployed after closing down his buisness, and I had to continue to work the long and stupid hours, I get a little nervous when there is no money coming in, even though the thought was that he had enough in the bank, there was no effort on his part to help with bills until 4 months after he moved in.

Thanks again for all the helpful advice, even if some may not be what I want to hear, I need to hear it so I can do the right thing!!!
 
It's just as well he isn't on the mortgage. If you had to buy him out, you might have trouble getting a mortgage on your own... but you already know you can do that.

A judge will not likely force you to sell your house. Worst case scenario, they will figure out the equity in the home (not the total value) when he moved in, and the equity when he moved out. The equity will be up because the value will be up due to the renovations, but it will also be down because the market is down. You may have to pay him off, but let the judge decide how much.
 
Onceagain said:
As far as the bank allowing him to be on the Title but not the mortgage, the bank had nothing to do with the transfer. We had a lawyer do a transfer, eh voila, it was done.
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That's very odd. If you check the terms of your mortgage there is almost certainly a requirement that you inform and/or get the bank's consent. Otherwise, folks would transfer title all the time and skip on the mortgage, leaving the bank high and dry with no recourse against a borrower who no longer owns the house, or at least the portion of the house that the bank thought he owned. That's why the bank has to requalify both prospective owners and redo the mortgage whenever a title transfer is proposed.

I'm surprised the lawyer didn't mention this, he has a duty to the bank even when acting for you.

Check into this. If I'm right, the bank may have the right to call in the loan, which is the last thing you need right now. Obviously you don't want the bank to know about the title transfer until you have checked the facts.

Regarding your ability to qualify on the mortgage yourself, don't automatically assume that just because you obtained the financing when you acquired the home, that you would qualify today. Your income may have changed, and today's lending climate is different than it was as recently as a year ago due to the credit crunch in the US and plumetting interest rates.

Probably the best thing you can do right is to continue to renew the mortgage when it comes up, and don't ask questions at the bank about getting a better deal. You may want that sleeping dog to lay.
 
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Paris
Thanks for your thoughts, your worst case scenario actually seems to me to be the best case scenario!!
Dad
I will look into that!! And you are right about requalifying, I quit a job just after the last renewal, went back to school and have a new job, but my income is lower than before, I'm just hoping that as I have good credit with the bank, and I have no other outstanding debt other than the house and the car, they will continue to want to do buisness with me!!
 
This happens more often then one would think.
I also transferred the deed into my name without notifying the bank.
So as it stands the deed is now in both names but the mortgage is held in just the husband’s name, mortgage payments are drawn from my account.

If at some hopeful that since all mortgage and insurance payments for the last 8+ years have come from my account & that I would have a strong standing for approval should they so choose to take this route.
 
Dad
I checked my mortgage papers and you are in fact right! Thanks for the info, very good to know so at least I don't get blindsided, but adds to the mound of worries right now...double edged sword!!
You are all really great though, I'm sure you know the thoughts and worries that are running through my mind....sometimes I can convince myself it'll all work out, other times I am convinced I am going to loose everything I have worked so hard for these last few years.

I appreciate the info and help I have received from all of you, and will try to keep my chin up at least until I see the lawyer on Tuesday.....if she can actually prove we have been common-law this whole time, I think I will be ok...guess that is the first step!!

Cheers everyone
Have a great weekend
 
Then just remain under the radar, at least until such time as you feel confident that you can qualify if it becomes an issue. Don't miss any payments and keep renewing the mortgage without making a fuss at the bank. Again, you need that sleeping dog to continue to lie.
 
Thanks for the advice Dad

Unfortunately, he is proposing we either get a certified appraisal and I buy him out for 1/2 the appraised value or immediately put house up for sale, and there is no stipulation as to what happens after sale...I would expect the mortgage by paid out and we split the difference, but at this point I would also expect he assumes we split the difference before mortgage paid out and I am left with nothing.....the mortgage is only 72K at this point, but if we are able to sell house for 140k, then I would be left with only enough to pay off mortgage. This is why I feel I need to prove we were infact common-law even with only 18 months living together!
Point of interest, the lawyer, at the time of doing up the Deed with his name on it, 2006, put on the Deed that The parties were spouses as defined in the Family Law Act and therefore no tax was payable. I understand the difference between CCRC requirements for common-law and the Family Act requirments, however if the lawyer is quoting Section 29 of the Family Act on the Deed, then perhaps it gives me a leg to stand on. We also hold the vehicle lease 2005 in both our names as well as the insurance on the vehicle. I believe all that points to the relationship as being a Permanent Relationship, and more than simply joint tenants.
Then we look at the kids. My kids, however he did act as Parent in Loco. Signing school forms, attending Mental Health Meetings for my son with me, and being referred to by the kids as their step-father. Again, a permanent relationship, even though we were only living together 18 months, the other issues go back 4 years.
Just some of the thoughts whirling through my brain at this point!
 
Onceagain said:
Paris
Thanks for your thoughts, your worst case scenario actually seems to me to be the best case scenario!!
Dad
I will look into that!! And you are right about requalifying, I quit a job just after the last renewal, went back to school and have a new job, but my income is lower than before, I'm just hoping that as I have good credit with the bank, and I have no other outstanding debt other than the house and the car, they will continue to want to do buisness with me!!
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As a person who has been in the mortgage business, since the stocks began to fall in Oct, there have been 13 lending institutions that have left Canada. The major lending institutions have made it more and more difficult for people to obtain credit. If you have never defaulted on your mortgage payments but on other creditor you may have had a late payment or two they look at that very seriously now. Your best bet is to go to a mortgage broker rather than a bank. Mortgage brokers have a number of lending institutions available to them. I will give you an example my brother in law to be just before the market falling in Oct was to renew his mortgage he too changed jobs and was making much less then before his wife still had the same job their income went from 80K to 50K huge difference. The bank would renew but at 5.75% and would not lower that rate even though the both of them had excellent credit scores in the high 700's and never late on any payments to any creditor. A mortgage broker got them their mortgage just before the banks changed their prime rate lending from prime minus to prime plus. They ended up with a mortgage of prime - .50% and a line of credit with prime +1%. so they are pay only about 2.5% on their mortgage and 3.5% on their line of credit. It pays to shop around with a mortgage broker. If you go it alone and go from one lending institution to another there will be a tracking on your credit file that will show where you have been looking for credit and the more your file is pulled that too will lower your credit score. Hope that helps you out.
 
dadtotheend said:
Yes, the lawyer is playing hardball trying to intimidate you into settling. My ex left the house and she had her lawyer continue to send me letters for months and months requiring that the house be put on the market. She did this because the kids were still here and she wanted to uproot them from the only home they have ever known to strengthen her custody argument.

There's a hardly any chance that a judge will order the sale when the kids live there. They are making baseless threats. It must anger and frustrate you that they would be so prickish as to do that. Stay calm and rational - don't fall into a trap and respond with emotion. Just say that the kids need the home and that you don't agree with the sale.

Regarding him not being on the mortgage, I would be a little scared on that too, but I wouldn't worry. In the end you will be staying in that house and nothing is going to happen to it for as long as you want. You can wait him out for many years and not sell the house. Eventually you will settle and the fair outcome will prevail i.e. that the numbers will be calculated as if he was placed on the mortgage at the same time as he was placed on title.

BTW, I don't understand why the bank consented to having him on title but not the mortgage.
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Regarding the mortgage end of it.... the lending institution holding the mortgage must be paid out regardless before anyone get any profit from the home. They have a lien on the property, in a nut shell they do not care what is going on between the two of you just that they get paid. They would have to sign release of the mortgage. Secondly if there is no equity on the home or much of one.... no one get anything and your out on the street so to speak with your children. I am sure the courts will not be overly impressed with that considering the relationship and how everything went to this point with him.
 
The amount contributed for renovations only makes a difference if it increased the value of the home. The onus is on him to prove the increase. The chances of winning an unjust enrichment claim are slim. It will cost him more than the renovations did.
Since his name is only on the title and has been there for the last 2 and a half years, he can only claim the increase in value for that time period.
Good luck and don't worry. Piece of advice do as much advance homework as you can before you go to the lawyer. ie home appraisal or market evaluation for the time he moved in. A real estate agent could give you this info for free.
 
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