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Old 02.11.2018, 09:46
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Divorce - sale of property - buying the other persons share?

It has been covered here before but not in such detail.

I do have a lawyer and asked a high level question (not yet answered) but have also requested to have a meeting next week to get the legal standpoint.

The judge handed me/us our heads on a plate for the matter of divorce going on for so many years (5 years now), my perspective what the hell can you do when the other side refuses to negotiate! The judge told us to resolve it by the 21st December 2018 between us or she will set the price and we won’t like it!

Stunned a bit as my -ex- had all the paperwork for the property an apartment to hand and was keen to sell!

Before she had been reluctant as in 3+ years it will no longer be a controlled price and would give an extra estimated 400K. (5.5 piece apartment in a really good location)

The numbers she spoke of in court were low but correct on the fixed price at 895K minus (mortgage + rolled interest + 50K penalty) = not a lot. (even though I put up about 400K into this)

Now for the dumb questions:

I assume I can by her 50% equity out?
I assume I have the right to that before selling to anyone else as I have a 50% interest in it?
What if she agrees to the sale, sign the papers and doesn’t move out? (Is that possible)

Based on the figures she was speaking we would dodge the penalties and she would end up with more money. This sounds good in principle but I believe (without any grounds or evidence but being my totally jaded and not trusting in her at all) that she wants to have her partner buy it at the knocked down price.

I plan to tell her that I will leave the apartment equally for our three children so at least they benefit. (after all I can’t take it with me and I prefer they benefit than anyone else)

Time is against me, so any good advice and or knowledge of the law would be helpful.

Will post back what my lawyers tells me after I have the meeting with her.
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Old 02.11.2018, 13:26
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Re: Divorce - sale of property - buying the other persons share?

So you want to buy her half, and she wants to buy your half, but she also wants to sell to you but you can't agree on a price.

Normally an independent professional party is asked to give an estimate of the value, and that value is used for the further calculations and buy-out.

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I assume I can by her 50% equity out?
If your financial situation is good enough to pay for it, or to get the loan/mortgage, yeah sure.
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I assume I have the right to that before selling to anyone else as I have a 50% interest in it?
No, unless agreed upon by contract.
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What if she agrees to the sale, sign the papers and doesn’t move out? (Is that possible)
In the sales contract you also set a date by which she has to leave the house and she signs to do so, if she does not leave after that you go to court and have her evicted.
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Old 02.11.2018, 13:53
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Re: Divorce - sale of property - buying the other persons share?

The price is not negotiable it is a fixed price (if you sell before the ten years are up), so that bit is easy.

No she just wants to sell

I think I had that put in the contract at the time of purchase but will check.

In theory I need approx 125K to buy her out but after three years I can refinance the whole lending.
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Old 02.11.2018, 13:56
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Re: Divorce - sale of property - buying the other persons share?

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The price is not negotiable it is a fixed price (if you sell before the ten years are up), so that bit is easy.

No she just wants to sell

I think I had that put in the contract at the time of purchase but will check.
Surely you put in 400k so it won't be split 50:50 just the excess of 400K split 50:50
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Old 02.11.2018, 13:58
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Re: Divorce - sale of property - buying the other persons share?

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In the sales contract you also set a date by which she has to leave the house and she signs to do so, if she does not leave after that you go to court and have her evicted.
This is the hard part because with two children that is going to be difficult to get her out.

Maybe it is possible in the deal that she has to vacate before the signing date if we have a signed agreement before completion?

Hire the locksmith to change the locks ... I guess
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Old 02.11.2018, 14:01
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Re: Divorce - sale of property - buying the other persons share?

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Surely you put in 400k so it won't be split 50:50 just the excess of 400K split 50:50
No she is entitled to half of the equity as there was no prenup agreement.

400K doesn't equal equity because some was taxes, lawyers fees and improvements. The improvements were about 100K and not sure why she did not include that in the figures she produced.

You are allowed to ask for the fixed price+improvements at time of the build.
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Old 02.11.2018, 14:07
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Re: Divorce - sale of property - buying the other persons share?

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No she is entitled to half of the equity as there was no prenup agreement.
If there is none, default in Switzerland is that any assets that you had when entering the marriage remain yours and yours alone, and are not split.

And if the funds were via inheritance, before, during, or after, they are always separate even if you DO have a prenup stating otherwise.

Tom
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Old 02.11.2018, 14:16
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Re: Divorce - sale of property - buying the other persons share?

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The price is not negotiable it is a fixed price (if you sell before the ten years are up), so that bit is easy.

No she just wants to sell

I think I had that put in the contract at the time of purchase but will check.

In theory I need approx 125K to buy her out but after three years I can refinance the whole lending.
She wants to sell.
You can get her share for 125000. Doesn't really seem much.
Kids staying with her? Have the rent evaluated, put in the divorce-contract that the rent is taken off your alimony while she stays in the house.
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Old 02.11.2018, 14:52
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Re: Divorce - sale of property - buying the other persons share?

Ask the Saudis to intervene ?
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Old 02.11.2018, 15:30
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Re: Divorce - sale of property - buying the other persons share?

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She wants to sell.
You can get her share for 125000. Doesn't really seem much.
Kids staying with her? Have the rent evaluated, put in the divorce-contract that the rent is taken off your alimony while she stays in the house.
Agreed 125K is not much, brilliant idea about putting the rent in there!
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Old 02.11.2018, 17:59
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Re: Divorce - sale of property - buying the other persons share?

She may feel, even with a valuation, a higher price could be achieved and so insist on selling. However you could try and negotiate that you will buy at the best offer + 1 franc.

For the rest I can't say as there are two many unknowns, age of children, are they still in education, does she work, do you work, are you much older etc. All this will likely be taken into account by the judge as to how the split will be.
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Old 07.11.2018, 11:08
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Re: Divorce - sale of property - buying the other persons share?

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She may feel, even with a valuation, a higher price could be achieved and so insist on selling. However you could try and negotiate that you will buy at the best offer + 1 franc.

For the rest I can't say as there are two many unknowns, age of children, are they still in education, does she work, do you work, are you much older etc. All this will likely be taken into account by the judge as to how the split will be.
No, it is a fixed price by law as it cannot be sold for more until 10 years and we are coming up to 7 years, after that it can be sold for the free market price.

The rest well, she works 40%, me 100% because I cannot afford to work less ... the kids I already pay through the nose for them including the one who stays with me.
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Old 07.11.2018, 11:50
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Re: Divorce - sale of property - buying the other persons share?

How do I finance this then? (numbers are rounded but very close anyway)

Fixed price = 894K (for the next 3 years & 5 months)
1st loan = 580K Interest only at 2.1% (approx 65% of the valuation)
2nd loan = 83K (Interest at 2.1% plus amortization currently 800 CHF p/m)

Penalty for selling early @60K

The price can be set lower if we do not come to an agreement before the deadline and the judge has threatened to do that.

Ignoring the penalty I would have to pay her approximately 116K
Calculation being ... (894 - (580+83))/2

In theory my -ex- would be 30K better off, so based on logical thinking which is dangerous that would be a good deal for her at the moment.

Options are:
  1. Borrow the money from a friend and repay in full 3 years time + Interest
  2. Borrow 115K from other source but not sure it can be secured
  3. Refinance the whole lot and take the 60K hit

After 3+ years I could refinance the whole deal and get a much better deal as the free market value currently would be about 1.3M and my borrowing needs would be <65%. (@60% so interest only)

Currently the apartments in the block rent for between 3.5K to 4K pcm. (even though you are not supposed to charge more than 2K pcm)

Thoughts ideas appreciated?
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Old 07.11.2018, 12:34
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Re: Divorce - sale of property - buying the other persons share?

Selling at the fixed price would be a huge bonus for the buyer (I buy it!). She would understand that too of course. If you are still on speaking terms try to find a way that you both benefit from the jump in value in 3 years.

Would it be possible to agree on an ownership split for the appartement as part of your divorce agreement? This way you both benefit. You could take in account the 400K upfront and the rent for the person who stays in the appartement.

after the 3 year wait period the value goes up and the one staying could get an additional mortgage to buy out the other. etc.
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Old 07.11.2018, 12:57
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Re: Divorce - sale of property - buying the other persons share?

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Selling at the fixed price would be a huge bonus for the buyer (I buy it!). She would understand that too of course. If you are still on speaking terms try to find a way that you both benefit from the jump in value in 3 years.

Would it be possible to agree on an ownership split for the appartement as part of your divorce agreement? This way you both benefit. You could take in account the 400K upfront and the rent for the person who stays in the appartement.

after the 3 year wait period the value goes up and the one staying could get an additional mortgage to buy out the other. etc.
I have tried to talk to her but wants to use her lawyer, who is good but then there is only so far she can go!

The reality is if I offer her a better deal than if we sell now, that the judge will side with the deal, even if my -ex- does not.

At the back of my mind I have a bad feeling she wants someone else (maybe her partner) to buy the apartment cheap.

Having said that I own 50% so I have to come up with a deal that is better than currently my -ex- has presented to the court.

If we go ahead with what my -ex- has submitted to court, she would get 86K, I am offering 116K ... surely the judge would side with the more sensible deal, especially as I will mention I want to leave it to my three children.

My -ex- benefits in the short term, I benefit in the medium term, our children benefit in the long term.
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Old 07.11.2018, 13:02
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Re: Divorce - sale of property - buying the other persons share?

So, if she sells to you she gets 116K

But if the house goes on the market she gets 116K+(1.300K-894K-60K)/2 = 289K

If the fine to sell for 406K more is only 60K than the value as for dividing is not worth the 896K you paid for it, but it is worth 894K+406K-60K = 1.240K

So yeah, I can see why she does not agree to sell you her part for 116K and let you get all the growth in value which both of you made on the house while being together.

And when not selling to the market one could argue that the 60K is not relevant and should also be added to the total value since this is a profit which otherwise would fully go to you.

Last edited by EdwinNL; 07.11.2018 at 13:18.
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Old 07.11.2018, 13:23
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Re: Divorce - sale of property - buying the other persons share?

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So, if she sells to you she gets 116K

But if the house goes on the market she gets 116K+(1.300K-894K-60K)/2 = 289K

If the fine to sell for 406K more is only 60K than the value as for dividing is not worth the 896K you paid for it, but it is worth 894K+406K-60K = 1.240K

So yeah, I can see why she does not agree to sell you her part for 116K and let you get all the growth in value which both of you made on the house while being together.

And when not selling to the market one could argue that the 60K is not relevant and should also be added to the total value since this is a profit which otherwise would fully go to you.
No that apartment can only be sold at a fixed price for 895K maximum until March 2022 then it can be sold at the market price!

I am happy to keep the apartment until the 10 years are up and sell then and split the profits but she is insistent on selling now!

Yes, she is entitled to 50% and in theory that value date is set at July 2017 as are other assets in that case. (for example my pension, life insurance policies etc.)

I didn't want any of this, she chose to find a new partner and wants a divorce but that is the emotional crap

Last edited by magic; 07.11.2018 at 13:25. Reason: Clarification
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Old 07.11.2018, 13:37
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Re: Divorce - sale of property - buying the other persons share?

If you sell now the extra money has to be paid towards the previous owner?
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Old 07.11.2018, 13:59
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Re: Divorce - sale of property - buying the other persons share?

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If you sell now the extra money has to be paid towards the previous owner?
Not sure I understand the question as this was a new build in 2012 and we were the first owners - jointly in title.

If we sell now, we both get 86K after deductions.
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Old 07.11.2018, 14:03
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Re: Divorce - sale of property - buying the other persons share?

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Not sure I understand the question as this was a new build in 2012 and we were the first owners - jointly in title.

If we sell now, we both get 86K after deductions.
Open market value is way above the fixed price. What happens with the extra money if the house would be sold above the fixed price? Does it go to the project developer, the state, is it partially fined, or can you keep it?

Also I don't see why a Judge would set an even lower price than the fixed price to make you both unhappy. It opens the way for you or her to ask your uncle or nephew to buy the house for such price and just sell it in a few yrs with a guaranteed huge profit, agree on offering them a 100K profit on their investment and the one who does this walks out with 300K while the other gets nothing. Many forum members would love to buy your house today for either fixed or even lower price, even for only a partial chunk of the profit. Or if one party stays in a lower set value cannot make both unhappy since the one who stays gets a bargain where the other gets less. I fail to understand this.
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