My longtime girlfriend and I moved to Florida three years ago. After renting a house for a year in an area 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 would be considered “good” scores — north of 725 and 800). I believe the mortgage originator thought that was the way to go too. We made an offer on a house, signed by both of us, and it was accepted.
She had proceeds from the sale of a previous residence and paid for many of the inspection costs herself. We put 20% down for the purchase and got a mortgage for the rest. She paid a larger portion of that 20% than I did. Both our names were on the closing documents – the ones not specifically related to the mortgage – and our names were both on the deed.
I also bought the vacant lot next door with my own cash and put both of our names on that deed. This was a separate transaction with a different party than the home purchase.
We both proceeded to make half of the mortgage payment each month on the house we shared. We also spent money on home improvements and maintenance: New countertops, appliances, flooring, paint, etc. Some expenses I paid, others she paid. I did all the home improvement work myself.
““The closing company said they don’t usually split wire transfers and I was fine with that.”“
Seventeen months later, we decided to sell our house. Looking back now, it looks like we may have sold at the peak of the current Florida real estate boom. The house sold for almost twice what we paid. After paying off the mortgage, the net income was 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 usually don’t split wire transfers and I was fine with that. I thought we were pretty solid and I had no worries.
It’s been five months since the closing and things between us are difficult. I get pushback when I asked for my share of the proceeds. My position is that we should both be reimbursed for all our expenses and the remaining income should be split 50/50.
I believe her expenses/expenses for improvements, new appliances, inspections, etc., may be around $30,000, while mine is closer to $20,000.
In this example, that would leave about $150,000 to split evenly, so $75,000 each. $25,000 has been transferred to me, leaving her with about $175,000. I feel like I have another $70,000 left in me – my share of the profits ($75,000 + my expenses of $20,000 = $95,000).
Am I wrong in my thinking? What should we include and exclude in our list of reimbursable expenses? For example, on her list of expenses, she includes the monthly cable/internet bill, which seems fine to me, but that’s also the bill I paid on our rental house for 13 months, but I never got any of that money back.
Any guidance you can provide is greatly appreciated.
Exhibition in Florida
This confrontation could have been predicted in the tea leaves.
Nothing happens by chance. Of course, it was easier only for the person receiving the funds. It was never going to be easy for him whose bank account was left empty. You must proceed on this basis. This was not an accidental turn of events. It was done — no matter what your girlfriend (or ex-girlfriend) claims — it was done with the knowledge that she would hold all the cards. I assume you have cleared $200,000 after capital gains taxes.
I generally 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 more you discuss the details, the longer that money stays 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. He can’t give you what he claims he no longer has, and the money will be harder to trace as time goes on.
You were both in the deed and both had a 50% share in the property, so the law is on your side. Consult an attorney to come up with a plan of action, but before you get involved in a protracted and protracted legal battle with your girlfriend, suggest hiring a mediator to help you work through your issues. Be prepared to compromise. She can project you and discourage you until she decides her next move. Clearly, $25,000 is not enough for you.
““You both paid bills and invested in upgrades, but you invested in a property that was jointly owned 50/50.”“
Be prepared to take legal action if/when it becomes clear that he does not wish to split the proceeds fairly. But you both spent money on the property, and if your ex wants to push you into litigation, you’d be wise to let her know that she may end up owing you the full 50% of the proceeds—that’s $100,000. You both you paid bills and invested in upgrades but invested in a property that was jointly owned 50/50. If she’s smart, she should settle down with you now.
Another potential source of leverage: The other property you bought together. If you filed for partition to sell this property now, you’d lose money and she’d lose a potentially large profit, so it makes sense for you and her to stay on good terms – regardless of your relationship status – secure a bigger day payment in the future. It would not be wise to spend today on a profitable venture for short-term gains.
He has physical control of the $175,000 but does not have the legal standing to hold it. Split the $200,000 minus the difference in your down payments and renovations. No doubt, however, it will be a more difficult negotiation given that she has the funds in her possession. It’s tempting to imagine what he could do with $175,000, and he can make all kinds of rationalizations as to why he should keep the lion’s share. A mediator should give her a deadline to transfer the agreed funds.
If he does not meet this deadline, a lawyer.
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