Browse Forums Home Finance 1 Jan 02, 2011 11:53 am My friend, Anne bought a house in Glen Waverly with her friend John. The house was bought for 600K. It was bought in the name of John. Anne paid, 300K cash to John (deposited in his bank account). And John got a home loan for 300K. The agreement was, whenever they sell, they will split the money equally. But, they have nothing to this regard in writing. Recently, they have agreed to sell the house. But, Anne has doubts, if John will keep his word. (He has suggested few times, he will not honor the commitment) She feels, she is going to lose her 300K. Can she do anything? Legally, she has no right to that property, as her name is not on the property. But, they both have been living there for the past few years (eversince, they bought the property) What can be done, if John decides to keep the whole lot to himself? Can he really get away with this? [Their friendship is platonic, they never had a romantic relationship, althought they have been flat-mates for years] Has anyone been in similar situation. Any suggestions of how to deal with this, would be greatly appreciated. Re: Has anyone been in this situation? 2Jan 02, 2011 1:16 pm Big mistake!!!! Unless it was a donation of funds why didn't Anne ensure she was on the loan as well? It doesn't make any sense that you'd invest such a large amount of money just on "word" that the monies will be split when sold. If it was an investment property you would ensure everyone involved is on the relevant documents. I'm not sure why Anne didn't ensure she was on the mortgage documents. I'm really baffled. I think all she has is for John to honour their agreement. Re: Has anyone been in this situation? 3Jan 02, 2011 1:33 pm Dollar, thanks. From what I hear. She was helping him get his first home. And she wanted to get the first home owner's grant from the Govt. (She is not first-home buyer)
John, says the money she gave was a gift. But, she has been living in the house and has been paying home insurance for teh last few years and few of the bills are on her name (telephone, Foxtel) - Can they be of any help? Re: Has anyone been in this situation? 4Jan 02, 2011 1:44 pm Has John being paying the full mortgage repayments himself without any contribution from Anne? Did she electronically transfer the $300k into his account? Surely there is a trail of the money from her bank account to his. John needs a decent slap if he think that was a donation. Anne equally needs a slap for lending a 'friend' such an enormous amount of money with no written agreement. Re: Has anyone been in this situation? 5Jan 02, 2011 1:47 pm Oh I have no idea Roland. My advice would be to get her to speak to a solicitor about the situation and at least get some advice. Lets hope if all else fails John sticks to the deal. Re: Has anyone been in this situation? 6Jan 02, 2011 2:12 pm Aaron & Erin Has John being paying the full mortgage repayments himself without any contribution from Anne? Did she electronically transfer the $300k into his account? Surely there is a trail of the money from her bank account to his. John needs a decent slap if he think that was a donation. Anne equally needs a slap for lending a 'friend' such an enormous amount of money with no written agreement. Lol... Yes, I agree. They both need a slap!! To answer your question, yes Anne had transferred $300K from her account to his. And she has the record to prove it. She hasn't been paying any mortgage, as she has paid her half. And he has been paying for the last few years, monthly mortgage. He says, she told him, it was a gift. She says, they agreed to split it equally. The question is, should she do anything now or wait until he sells the place and then ask for money? Because, my hunch is, once he sells the place and gets the sold amount in his account (as he is the sole property owner) - it might be harder to get her money back? Re: Has anyone been in this situation? 7Jan 02, 2011 2:15 pm She needs to act now. Seek advice from a solictor and get an agreement written up and signed by John asap. I wouldn't leave it any longer. Sounds like greed has taken over with John Re: Has anyone been in this situation? 8Jan 02, 2011 2:16 pm She needs to start action now. Once the house is sold the money is his. The fact that they are not in a defacto relationship means she doesn't even have that to fall back on. A lot of solicitors will still be closed but tell her to start phoning first thing on Tuesday and get an appt straight away. Make sure she has her bank statements / receipts showing the transfer etc. The more paper trail she can prove the better her chances. Some things are worth waiting for. Re: Has anyone been in this situation? 10Jan 02, 2011 2:39 pm Definitely get advice asap. I am guessing that John is not going to be signing any agreement that is subsequently drawn up. It is really her word against his. She says she loaned him the money, he says it is a gift. She may be able to get a caveat put on the property if she can show sufficient interest in it and that will stop John selling it for now but only for about 3-6 months. Definitely Definitely get legal advice but having worked in law you may want to advise her that she is in for a tough and expensive ride without any formal documentation regarding her interest in the property. It will really come down to who presents their argument best to the Court if it is not settled amicably. Good luck to Anne. Fingers crossed something can be done to resolve this. Re: Has anyone been in this situation? 11Jan 02, 2011 2:46 pm Thank you for your reply Crawley. Yes, I will advice her, it will be a tough legal battle if they can't settle out of court. All I know is, sitting by until he sells the place will make it even harder for her, to get her money back. Has anyone been in this situation? 12Jan 02, 2011 4:48 pm She needs a solicitor to put a caveat against the title. Then when he sells, no funds will go to him until they have both reached an agreement. This is how I did it when my husband left. We built the house together and had 3 kids but the bank wouldn't lend us as much with me on the title. Get the caveat, all will be ok. Re: Has anyone been in this situation? 13Jan 02, 2011 5:26 pm You beat me to it MrsG It might be worthy lodging a financial interest Caveat. If a person lends money to help someone else buy land, then a caveat can normally be used to prevent the owner selling, giving away or mortgaging the land in preference to the payment of that debt. But it is dirty business as soon as you bring the sharks in! Better to seek mediation as tough as it may be...(anyway you'd be straight to the Sup court since it is over $250K and that would involve mediation as a part of the process. based on the info supplied there would appear to be an actual financial interest but there might be a third part to the story we are not aware of. I shudder when I think of the fun we had NOT! Where you are coming from is where you are going to... Re: Has anyone been in this situation? 14Jan 02, 2011 9:02 pm A prime example of where failing to ensure having the right legal documents necessary can go sourly wrong. Get professional advice pronto! Isn't the saying...never go into business/property with family or friends. (But if you ever do, ensure you have documents that are legal). I'd be interested to know the outcome. Wish I had a spare $300K. Re: Has anyone been in this situation? 15Jan 02, 2011 11:58 pm I was going to say caveat, but caveats are not always easy to get. She needs a soly asap. She needs any emails/letters they may have which document something prudent to the arrangement. Even if she starts to write to him now confirming the agreement (in a roundabout way), that's a start. A thankful person is a happy person. [/color]My hobby design blog: http://aviewondesign.blogspot.com/ Re: Has anyone been in this situation? 16Jan 03, 2011 12:10 am Yep.. get answers without a hammer Where you are coming from is where you are going to... Re: Has anyone been in this situation? 18Jan 04, 2011 1:53 pm Fantastic, please keep up posted on the outcome, good luck to Anne!!! Re: Has anyone been in this situation? 20Jan 04, 2011 11:11 pm I feel for anne, but she has made a huge error just to get a few thousand in first home buyers! i hope everything works out. she needs Judge Judy!! 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