Received a letter from a legal firm stating they represent a former girlfriend of mine. She and I purchased a property together. However, shortly after, we broke up and she walked away without ever contributing any monies to the property. I covered it all

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Received a letter from a legal firm stating they represent a former girlfriend of mine. She and I purchased a property together. However, shortly after, we broke up and she walked away without ever contributing any monies to the property. I covered it all

She is now taking legal action to have the property placed on auction so that she could recoup her initial investment half of the down payment. 1st question – aside from her portion of the down payment, is she entitled to anything else…appreciation, etc? 2nd question – I’ve yet to be served, only received a letter…am I under any timeline obligation to do anything until I am served?

Asked on March 27, 2019 under Real Estate Law, Missouri

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

1) No, you don't have to do anything until served, but may wish to try to resolve before then: generally, the more money you make the other person expend on a legal action, they more they will require to settle the matter.
2) An an owner, she is entitled to half the equity in the home, adjusted for any additional amounts the other owner (you) paid but she did not. So she is likely entitled to more than just her portion of the down payment. Example: a house was bought for $150k: $15k down ($7.5k each person) and $135k mortgage. It is now worth $200k. The mortgage currently stands at $100k. In addition to your $7.5k down payment, you also paid another $45k in taxes and mortgage, etc. that she never did. 
If the house is sold now, there is a $100k left after paying off the mortgage. Of that $100k, you first should get $45, for your additional payments, leaving $55k. Since you and she are both owners, once you've been compensated for your additional payments, the remaining $55k is split 50-50, or $27.5k each. So in answer to your question, she does share in the appreciation, even though you would, if the matter went to court, get a credit or adjustment for additional costs you paid. So you most likely need to offer more than her down payment to settle the matter without litigation.


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