Should payments into a house’s mortgage be repaid to a tenant that moves out?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Should payments into a house’s mortgage be repaid to a tenant that moves out?
an unmarried couple bought a house with plans to maintain it and turn it into a rental property in 5 years. Both paid into the mortgage, but after a year they split. One wants to keep the house, while the one moving out wants to be repaid the investment into the mortgage. Is this proper? Shouldn’t the payments into the mortgage be considered the same as paying rent in this situation? Who owes who what?
Asked on June 25, 2009 under Real Estate Law, Pennsylvania
Answers:
J.V., Member, New Jersey Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
This situation is very common and yet there is no set rule as to how to proceed. Basically if both parties contributed funds than both parties presumably own the home (and I assume both names are on the deed). At that point if one party want to get out of the agreement they would technically be owed the equity and/or fair market value of their contribution based on the remaining individual gaining the possession of the property. With this being said each situation is handled differently depending on the market, the price paid, and the specifics of how each party wants to work with the other.
Because this is such a gray area I would advise you contact a local attorney and see how your area tends to handle this type of situation because it oftentimes differs from location to location as far as how a situation is perceived and handled. You will than be prepared to attempt to alleviate the situation based on the decision made between yourself and your attorney as to whats best for you while not leaving possible issues to arise in the future if the situation isn't handled properly at this point. Also if he name is on the deed you will want to agree on a price to have her sell her portion to you so you are the sole owner. Because it can get complicated I would suggest professional help from a local attorney. Good luck with everything and feel free to post again with additional questions or for clarification.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.