Ex-partner trying to provoke foreclosure
I have a half share in the house with my ex-partner. I paid for half the house and I am on the title. I separated from her and suggested she could move out and I could stay in the house and pay her half of a fair market rent or vice versa. The alternative was to put the house on the market and in the meantime rent it out to a third party.
I was stupid enough, when we were still in the relationship, to suggest that I renovate the house, the whole house, which would increase its value. She was more than happy but refused to take any loan for renovation materials. I not only put in my labour but also took a $30K loan in my name, she promised to pay me half after we sell the house. There was another loan of $20K in my name.
I moved out two and a half years ago and my ex hasn’t paid me a penny and of course I cannot evict her or force her to pay as half of the house is hers so she doesn’t need to move out of this half. She has trespassed me from the property so I cannot use my share.
I paid the loan for 6 months after I moved out but then I couldn’t afford it. She is delaying the sale, subletting the downstairs and I have the loans to pay and the bank chasing me and no use of the house, no income from it and no influence over the sale process.
There are some strange things going on with the offers we have had so far and it looks to me as if she wants to provoke me to break down and sell my share to her for far less than it is worth.
I have told her on several occasions that I have stopped paying the bank loans and that she should make the payments to the bank directly from what she owes me in rent arrears if she is not prepared to pay me directly on a regular basis (and pay the balance to me). What she owes me is more than enough to cover all the loan repayments although, because they were not paid on time there are a lot of extra charges, fees and fines which she should pay.
She hasn’t made any payments to the bank or to me. I keep asking that she moves out and we rent the house to a third party but this seems pointless. She claims that she cannot afford the rent but yet also refuses to move to a smaller and more affordable property. I know, you will tell me to take her to the family court but the problem is that she decided to claim that we did not have relationship as it is clearly to her advantage to do so. She can demand some more money from me and stay out of all the debts. Whilst I had the loans in my name, borrowed some money and have CC debts she has a nice little term deposit. Yes, she knew how to use the relationship to her advantage.
I now have to prove my relationship with her in order to force the sale, get a fair division of the relationship property and my share of the furniture which she also refuses to give me.
This will take time and will cost about $23K and I have already paid heaps to the lawyer to help me solve this and to negotiate and at the moment I cannot afford all the legal fees. I do not need a family lawyer just the money to pay mine to continue and file to the court, but I need some help and advice and perhaps another property lawyer who has experience in foreclosures.
A few months ago my ex informed me that she is putting my rent aside to ‘bail me out’ with the bank, obviously in her view I am incapable of paying my own loans. Why she is putting this money aside and not paying the bank when the money is due to avoid hefty costs, fines and interest, I have no idea.
I have now received a final demand from the bank but when I requested that my ex immediately pay the bank from the rental contributions she owes me and which she claimed she had put aside, her lawyer wrote saying that she wouldn’t be able to pay the whole amount and in his recent letter said that I should find the rest of the money myself to pay the bank.
My question: I am afraid that the bank may decide to foreclose. What are my rights and what options do I have? I am not sure how the foreclosure process works and if I can only buy the house at an auction together with other buyers or can I negotiate with the bank beforehand?
I believe I could get a mortgage to buy the other share. I could not pay the loans if I have no use of the house and no prospect of using it or selling it in the near future. I think my ex might have deliberately created this situation to buy my share at a low cost. How can I prevent this? Can she go to the bank and say that because I have the debt towards them they should only sell my share (the shares are independent) and she will make an offer for this share because, obviously, no one else would be interested in buying half of the house. Can the bank sell her my share at some ridiculous price? What are my options?
I have been through all this before.
I am going to assume no children are involved since you did not mention any.
1. Are the loans secured against the property? I will assume that they are.
2. Create and maintain a very close relationship with you bank manager. I went and had monthly meetings with mine and explained absolutely everything to them up front. That way the bank were happy to provide me with a new mortgage regardless of the outcome.
3. I recommend you take a dramatic change of approach.
In my view the best thing to do is to make foreclosure your friend. It is a fine line. What you have to realise is that she has more to loose than you. All the costs you are incurring mean that the potential losses of foreclosure for you are not that much more significant than the course you are currently on. Whereas she has more to loose if there is a forecloser.
So in fact if you speed up the path towards foreclosure the game will change. Switch tack. When you do this do not step over the line. You need to speed up the path towards a forced sale but all the time you need to make it clear that this is directly as a consequences of the delays and lack of payments she has ALREADY created. The longer she delays selling the property, keep making sure it is well documented that this is the cause of the accelerated path to a forced sale. i.e. her fault for failing to act quickly enough.
Mostly likely what will happen is that she will eventually realise the property needs to be sold to a private buyer quickly or else the bank will sell it. So you will get the current market value anyway.
One thing to watch is that the property should be sold to someone that is not known to her or to you. You don’t want her friend or relative to buy it at a bargain and you should not do that to her either.
If you want to know more then answer point one first and ask me whatever you like.
In terms of the settlement – take a similar line. If you are clear on figures and can document things well then great. Do the following. File court proceedings immediately. Represent yourself. Don’t pay a layer to negotiate for you. It is a total waste of money.
Also as you represent yourself and she hires a lawyer her costs shoot up but your do not. Therefore she has an additional incentive to reach a settlement all of a sudden. This helps your situation where delays on her part cost her more than you.
Be determined to get the settlement decided in court asap. This can happen in parallel to forcing a sale. Although if she is paying for a lawyer and you are not then a long drawn out process can be helpful.
Also at the same time as filing proceedings, file for the court to make an order to force her to agree to sell the property. I.e. do this immediately. Ask that this application be heard urgently in an attempt to prevent foreclosure. Make it clear that even if the court hears this part and makes such orders urgently it may already be too late to prevent a foreclosure. This is not only to give your ex a message but it is to give the court a message which will be useful in the final settlement. Her lawyer will tell her to agree to orders by consent. That will do. Accept it but ideally you do not want this. You want the court to be forced to order the sale without her consent.
You are right on the money. I would like to ask you some questions though, do you have a skype account?