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 that it would make sense not to put me on the loan application even though my credit score was higher than hers (however, we both have what’s considered “good”) would be considered). scores – north of 725 and 800). I believe the mortgage lender thought this was the right way to go too. We made an offer on a house, signed by both of us, and this offer was accepted.
She had proceeds from the sale of a previous home and paid a large portion of the inspection costs herself. We made a 20% down payment for the purchase and took out a mortgage for the rest. She paid a larger share of that 20% than I did. Both of our names were on the closing documents – which were not specifically related to the mortgage – and both of our names were on the deed.
I also bought the adjacent vacant lot with my own money and put both our names on that deed. That was a separate transaction with a different party than the home purchase.
We both started making half the mortgage payment every month on the house we share. We also spent money on home improvements and maintenance: new countertops, appliances, flooring, paint, and so on. I paid for some of the costs, she paid for more. I did all the renovation work on the house myself.
““The closing company said they generally don’t split transfers and I was fine with that.””
Seventeen months later we decided to sell our house. Looking back now, it appears that we sold at the height of the current real estate boom in Florida. The house sold for almost double what we paid for it. After paying off the mortgage, the net proceeds were just under $200,000.
At the time of closing, all proceeds were transferred to her bank account, which I agreed to because it was just easier. The closing company said they generally don’t split transfers and I was fine with that. I thought we were pretty solid and I wasn’t worried.
It’s been five months since the shutdown, and things are rocky between us. I get resistance when I ask for my share of the proceeds. My position is that we should both be reimbursed for all our costs, and the remaining proceeds should be split 50/50.
I believe her expenses/costs for improvements, new appliances, inspections, etc. could be around $30,000, while mine are closer to $20,000.
In this example, there would be approximately $150,000 left to be divided evenly, so $75,000 each. $25,000 was transferred to me, leaving her with approximately $175,000. I feel like I’m owed another $70,000: 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 from our list of costs to be reimbursed? For example, in her expense list she lists the monthly cable/internet bill, which seems fine to me, but that’s also the bill I paid for 13 months in our rental house, but I never got any of that money back.
Any guidance you can provide would be greatly appreciated.
Fair in Florida
This impasse could have been predicted in the tea leaves.
Nothing happens by accident. Of course that was easier only for the person who received the money. It will never be easy for the one whose bank account remains empty. You must proceed on that basis. This was not a coincidental turn of events. Regardless of what your girlfriend (or ex-girlfriend) claims, it was done with the knowledge that she would hold all the cards. I’m assuming you paid $200,000 after capital gains taxes.
Overall, I agree with your logic about cost sharing, but that won’t get you very far. Cable bill payments are the least of your worries. The longer you argue over the details, the longer the money will remain 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 become harder to trace as time goes on.
You were both on the deed and you both had a 50% share of the property, so the law is on your side. Consult an attorney to work out a plan of action, but before you get involved in a lengthy legal battle with your girlfriend, it is best to hire a mediator to help you work out your sticking points. Be willing to make compromises. She may challenge you and antagonize you until she decides her next move. Clearly, $25,000 isn’t enough for you.
““You both paid bills and invested in upgrades, but you invested in a property that was 50/50 jointly owned.””
Be prepared to take legal action if/when it becomes clear that she does not want to divide the proceeds fairly. But you both spent money on the property, and if your ex wants to force you into a lawsuit, it would be wise to inform her that she could end up owing you the full 50% of the proceeds – i.e. $ 100,000. you both You paid bills and invested in upgrades, but you invested in a property that was 50/50 jointly owned. If she’s smart, she’ll have to settle for you now.
Another possible source of leverage: the other real estate you bought together. If you were to file a partition action to sell that property now, you would lose money and she would lose a potentially hefty profit, so it makes sense that you and she would remain on good terms – regardless of the status of your relationship – ensuring a bigger payday in the future. It would not be wise for her to set aside a profitable venture today for short-term gain.
She has physical control of the $175,000, but she does not have the legal status to retain it. Divide the $200,000 minus the difference into your down payments and renovations. However, it will undoubtedly be a more difficult negotiation since she has the money. It’s tempting to imagine what she could do with $175,000, and perhaps she’s making all kinds of rationalizations for why she should keep the lion’s share. A mediator must give her a deadline to transfer the agreed money.
If she doesn’t meet that deadline, a lawyer will be involved.
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