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Topic starter
18/05/2012 7:11 am
Hi. My partner had a trust deed which is now paid off. He owns his home but his ex is still named on the mortgage, she has agreed for it to be removed and we are in the process of doing that. We don't believe there is any equity in the property, he didn't have to pay any at the end of his trust deed but he did pay a nominal sum to prevent the house being revalued.
He has just discovered his ex has a trust deed when he was checking his record on the insolvency register. We are now concerned about equity if her trust deed company believes there is some. Where do we stand? She has not lived in the property for a number of years nor contributed to it financially. Given that she will hopefully be removed from the mortgage, if her trustee thinks there is equity can he come after my partner for it or will the ex be responsible for the shortfall and will have to pay it either via third party or by extending her trust deed? We don't know if they have decided there is equity but we are going on worst case scenario.
We'd appreciate any advice.
18/05/2012 8:23 am
Hi sk1601
There are a couple of issues here. You mention she is having her name removed from the mortgage. This does not alter her ownership of the property. This would only happen if she was removed from the title deeds of the property.
If she has signed a trust deed, then legally she would be unable to do this as any transfer would require to be agreed and signed by her trustee. Her trustee will have a valuation carried out on the property and also a note of the redemption figure for the mortgage. If there is any equity, then one half share would require to be paid to the trustee.
Mark
Mark is not posting regularly in the Trust-deed.co.uk forum.
Topic starter
18/05/2012 11:56 am
Thanks for replying Mark. We had no idea she was in a trust deed until we found it by chance the other night. She has signed an agreement that she is willing to be removed from the mortgage and the deeds, otherwise it is sold at a specified date if she can't be removed. She has also stated that she has no interest in any equity in the property and is not liable if it is in negative equity.
Now I'm really confused- does this mean the agreement is worthless or void? It was drawn up by lawyers and has cost a lot of money to do so. At no point has she mentioned the trust deed. Would it only come into play when we were completing the transfer of equity and they would have to sign and agree rather than her? We honestly don't think there is any equity.
I'd appreciate any help. It is a stressful situation. My partner will be consulting the lawyer but we're now worried that this is going to push things further back.
18/05/2012 12:05 pm
Hi Sk1601.
I think it is going to be worth spending a little more money with your legal team to verify your position in terms of the agreement and the trust deed.
However, if your partners ex remained the owner of the property at the time that the trust deed was signed, her share of any equity "vested" in the trustee at that point. The trustee may therefore conclude that they have no other option but to investigate whether there is equity in the property, and that they are duty bound to realise her share for the creditors if there is some.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds 
Topic starter
18/05/2012 12:15 pm
Thanks for your reply. Very frustrating as we did not know about the ex's trustdeed and we were never informed about it- only found out by chance.
