By Quentin Fottrell
“I got repelled when I asked for my share of the proceeds”
My longtime girlfriend and I moved to Florida three years ago. After renting a house for a year in a neighborhood we liked, we bought a house together. I wasn’t working at the time, she was, so we agreed it would make sense not to put me on the loan application, even though my credit rating was higher than hers (however, we did both what would be considered “good” scores – north of 725 and 800). I believe the mortgage originator thought that was the right way to go as well. We made an offer on a house, signed by both of us, and it was accepted.
She received the proceeds from the sale of an old house and paid for much of the inspection costs herself. We put 20% down on the purchase and took out a mortgage for the rest. She paid more of that 20% than I did. Both of our names were on the closing documents—the ones not specifically related to the mortgage—and both of our names were on the deed.
I also purchased the adjacent vacant lot with my own money and put both of our names on that deed. It was a separate transaction with a different party than the purchase of the house.
We both proceeded to make half the mortgage payment each month for the house we share. We also spent money on home improvements and upkeep: new counters, appliances, flooring, paint, etc. I paid part of the expenses, she paid more. I did all the home improvement work myself.
Seventeen months later, we decided to sell our house. Looking back, it looks like we sold at the height of the current Florida housing boom. The house sold for almost double what we paid. After paying off the mortgage, the net proceeds were just under $200,000.
At the time of closing, all the profits were transferred to his bank account, which I accepted because it was easier. The fencing company said they don’t usually split wire transfers and I was ok with that. I thought we were pretty solid and I had no concerns.
It’s been five months since the shutdown, and things are tough between us. I get pushed back when I asked for my share of the product. My position is that we should both be reimbursed for all of our expenses and that the remaining proceeds should be split 50/50.
I believe his expenses/costs for upgrades, new appliances, inspections, etc., can be around $30,000, while mine are more like $20,000.
In this example, that would leave about $150,000 to split equally, so $75,000 each. They transferred $25,000 to me, leaving him with about $175,000. I feel like I still have $70,000 owed to me – my share of the profits ($75,000 + my $20,000 expenses = $95,000).
Am I wrong in my thinking? What should we include and exclude in our list of expenses for which we should be reimbursed? For example, in her list of expenses, she includes the monthly cable/internet bill, which I think is fine, but it’s also the bill I paid in our rental house for 13 months, but I don’t never got that money back.
Any advice you can provide is greatly appreciated.
Fair in Florida
This impasse could have been predicted in the tea leaves.
Nothing happens by accident. Of course, it was only easier for the person receiving the funds. It was never going to be easy for the one whose bank account remains empty. You have to proceed on that basis. It was no coincidence. It was – regardless of what your girlfriend (or ex-girlfriend) argues – done knowing that she would hold all the cards. I’m assuming you cleared $200,000 after capital gains taxes.
Overall, I agree with your cost-sharing logic, but it won’t get you very far. Cable bill payments are the least of your worries. The more you quibble about the details, the longer the money stays in your ex-girlfriend’s bank account and the more likely it is that the money will be spent or transferred to other bank accounts. She can’t give you what she claims she no longer has, and the money will be harder to come by over time.
You were both on the deed and you both had a 50% share in the property, so the law is on your side. Consult a lawyer to come up with a plan of action, but before you get embroiled in a long, drawn-out legal battle with your girlfriend, suggest hiring a mediator to help resolve your issues. Be prepared to compromise. She may procrastinate and get in your way until she decides on her next move. Obviously, $25,000 for you is not enough.
Be prepared to take legal action if it becomes clear that she does not want to share the profits fairly. But you both spent money on the property, and if your ex wants to push you to sue, it would be wise to let her know that she might just end up owing you the full 50% of the proceeds. , or $100,000. You both paid bills and invested in improvements, but you invested in a 50/50 condominium property. If she’s smart, she should settle down with you now.
Other possible source of leverage: The other asset you bought together. If you were to file a share action to sell this property now, you would lose money and she would lose a potentially large profit, so it makes sense for you and her to stay on good terms – regardless of your relationship status. – – to ensure a higher salary in the future. It wouldn’t be wise for her to pass a profitable business down the road for short-term gains today.
She has physical control of the $175,000, but she does not have the legal standing to keep it. Divide the $200,000 minus the difference between your down payments and your renovations. No doubt, however, it will be a more difficult negotiation given that she is in possession of the funds. It’s tempting to imagine what she could do with $175,000, and she may be making all sorts of rationalizations as to why she should keep the lion’s share. A mediator should give him a deadline to transfer the agreed funds.
If she misses that deadline, lawyer.
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