Girl pays the mortgage, taxes, insurance. Her ex collects half the rent.
November 14, 2016 6:17 PM   Subscribe

My girlfriend and her ex own a two family house. She pays the entire mortgage/taxes/insurance. She lives in one half, and her ex collects half the rent of the other unit. What's her best course(s) of action?

The tenants are playing it safe and paying both him and her equally. I don't blame them, but she's paying everything because he had completely stopped.

This is in Ontario, so I understand if all suggestions here don't apply. These are really nice tenants and she'd ideally like to keep them. She just can't afford paying for this house while he's taking a portion of the rent. How does she convince them to pay her entirely?

In a worst case scenario, she can only evict them if she moves into their side after 60 days, and rents out her side to new tenants (this is the way parts of Ontario protect tenants. Landlords can evict if they or family move in).

My other concern is if there's any repercussions in a future divorce settlement if he's no longer collecting any rent, or did he forfeit any right to rent if he's not paid any mortgage for over a year?
posted by smersh to Law & Government (10 answers total)
She needs to see a lawyer. That's the only advice that will matter.
posted by Mo Nickels at 6:20 PM on November 14, 2016 [23 favorites]

This is most definitely a lawyer question. She needs to know both her rights and the actual costs of enforcing her rights in order to negotiate with him or be in the clear with landlord tenant law. Family lawyers aren't scary. This is what they do.
posted by Salamandrous at 6:21 PM on November 14, 2016 [2 favorites]

How ugly does she want this to be ? What's the desired outcome ? Regardless of the answers, the only real answer is lawyer, lawyer, lawyer.

(US answers would be how's the house titled, who claims what on their taxes/takes the depreciation, etc etc But if you just want it done, either you buy-out the partner via a refinance, or sell it/partition lawsuit.. )
posted by k5.user at 6:23 PM on November 14, 2016

Definitely lawyer. Important piece here is whether he has any equity in the house (where she is currently living without paying him any rent, right?). I get she is paying the mortgage now, but I'm less clear on whether the ex contributed to any down payment or mortgage payments before the couple split up, plus what Ontario law and/or a prenup may have said about how big purchases are split up among married couples.
posted by rainbowbrite at 6:24 PM on November 14, 2016 [2 favorites]

Lawyer. If they're joint owners, it makes a big difference in Ontario if they were married or common law. It they were common law, one party can unilaterally apply to have the property "severed" into two distinct ownerships and then force a sale. IANAL but I've contributed greatly to a lawyer's speedboat fund.
posted by bonobothegreat at 6:35 PM on November 14, 2016 [3 favorites]

yeah, lawyer - there's no clear common sense answer and saying the wrong things could materially impede the ultimate outcome. IAAL IANYL ETC
posted by Sebmojo at 6:43 PM on November 14, 2016 [1 favorite]

Just please don't let this situation go on any longer. Lawyer now.

I say this having watched two extended family members go through something similar where one was paying all the bills and the other was collecting all of the rent. Because they were closely related to each other, the person on the paying end didn't really want to rock the boat too much, but still wanted things divided properly, and hence this mess dragged on for decades causing all sorts of bitterness and resentment and issues within the family. Additionally, because the timeline was so extended there were issues around what were essentially statute of limitation (that's not the proper wording but you get the idea) claims. Keep in mind this was in Ontario.

From watching this unfold, I'd say skip any lawyer that wants to negotiate things first. I watched what that process was like and essentially it was a waste of money for the bill paying party. The rent collecting party knew they were in the wrong and had no intention of negotiating a fair deal. They just kept dragging their heels and making useless counter offers. The lawyer bills piled up quickly and nothing was ever resolved.

It was only when the bill paying party switched to a trial lawyer who put things in motion to go before a judge that the whole issue got resolved. (MeMail me if you want the lawyer's name. He was Toronto-based but took the case which was outside of the GTA.)
posted by sardonyx at 7:17 PM on November 14, 2016 [8 favorites]

Thanks, all. She already has a lawyer, but he's done nothing in a year. Barely offered advice, only wants to negotiate. This expensive limbo is why I took to metafilter.

We'll look into another lawyer for her.
posted by smersh at 8:46 PM on November 14, 2016 [7 favorites]

Good. If the reason the first lawyer hasn't done anything is because he thinks she's in the weaker position here, legally (marital property? terms of the mortgage/title?), she needs to know that so that she can make her own decision, not just keep hanging on for nothing. Not all lawyers are conscientious/smart/good, and it sounds like she needs to ditch this one. Even if she's not understanding because part of her doesn't want to understand that this is a no-win situation for her, hearing it from another lawyer can only help.
posted by Salamandrous at 4:48 AM on November 15, 2016 [2 favorites]

Is your girlfriend and her ex in the 1 year separation period prior to divorce in Ontario? If so, there might not be a whole lot that can be done about this situation. I'm assuming that the house they own is marital property. Records should be kept showing who's paid what since the separation. When looking to finalize equity/possessions during the final divorce agreement, your girlfriend should then be able to argue for the half that her ex stiffed her on.

Removing an existing tennant, to replace with a tennant who only pays her could sadly be seen as the exact same game playing that her ex is doing and be used to argue that the lack of payments shouldn't be tracked. Do not do this without legal advice.

Is there equity in this house (base this upon the likely valuation at time of divorce (someone/both will likely need to get an appraisal unless both are willing to agree at a valuation number))? Will your girlfriend be able to buy out his equity to retain ownership (don't necessarily count on the payment's he's withheld being able to be subtracted from the equity owed)? If there's not a chance that she can buy him out with the final divorce, then it might be best to stop considering this property as hers. That might mean looking to sell now (if he can agree to sell), or perhaps she might need to also stop making payments on this property. Obviously don't do this without sound legal advice.

If the house is underwater, then there's a chance your girlfriend can keep the house, and in theory her ex would owe the negative equity (along with the missing payments) to her. But until the divorce is final, that's all just wishing money. And after the order is final, she might need to go to court again to get an order to garnish his paychecks if he doesn't actually pay her.

Yes, her lawyer doesn't seem to be helpful. However, legal fees to go to court over a divorce can be pretty high; it's cheaper for everyone if there can be a negotiated agreement. Sadly, I know an example from Ontario where it should have been two parties walking away with their separate assets based upon the initial agreed-to split during the separation. Because one party's legal team was financed by his angry parents, the other party consented to paying out a 5 digit figure to "settle" instead of paying a higher 5 digit number (estimated by her lawyer) that would been spent to go to court.

If your girlfriend's lawyer is not being good about explaining of timelines, and potential outcomes, and why s/he is not doing anything (or seems to be doing nothing), then your girlfriend needs a different lawyer, or at least a "talk to me!" converation with the lawyer. A large part of a lawyer is providing at least some piece of mind during a pretty crappy time.

If your girlfriend and her ex are fully divorced (or never married to begin with), but kept joint interest in the property, then they're in a stupid situation (and probably ignore all of the above). A good lawyer should be able to do something, or start doing something now. Or at least communicate to her why it's wise to wait for the time being.
posted by nobeagle at 8:18 AM on November 15, 2016 [1 favorite]

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