FHTB AFTER A BREAK UP!! HELP

Louise447

Newbie
I really need some help !!
So my other half took out a forces help to buy loan a couple of years ago of 10k with his now ex partner they lived in the house 2 months before splitting up (she's a civvie) now I've searched everywhere and phoned up jpac and no one knows much about this scheme!! So she turned very nasty the house is now sold but the money remains sitting in the solicitors account they made a lot of money on the house but she is now refusing to allow the military to be paid back for this help to buy loan and wants to leave my partner with the debt and take 50% of the whole proceedings made.
The military have thrown my partner under a bus with this and haven't helped at all!
Where does he stand with this as it's going to court and no one seems to know much!!
He was advised this loan CAN NOT be used for anything other than on the purchase of their property so why doesn't it have to be paid off with the sale?!! Is there not a loop hole somewhere ?! They had a nasty break up so why should he be left with debt that was to buy a house In joint names and she walk away with thousands of pounds?!! PLEASE HELP!
 
I really need some help !!
So my other half took out a forces help to buy loan a couple of years ago of 10k with his now ex partner they lived in the house 2 months before splitting up (she's a civvie) now I've searched everywhere and phoned up jpac and no one knows much about this scheme!! So she turned very nasty the house is now sold but the money remains sitting in the solicitors account they made a lot of money on the house but she is now refusing to allow the military to be paid back for this help to buy loan and wants to leave my partner with the debt and take 50% of the whole proceedings made.
The military have thrown my partner under a bus with this and haven't helped at all!
Where does he stand with this as it's going to court and no one seems to know much!!
He was advised this loan CAN NOT be used for anything other than on the purchase of their property so why doesn't it have to be paid off with the sale?!! Is there not a loop hole somewhere ?! They had a nasty break up so why should he be left with debt that was to buy a house In joint names and she walk away with thousands of pounds?!! PLEASE HELP!
@Louise447 It appears that your "other half" is the one that needs help, having reached an impasse in a situation that just didn't happen overnight. Unless one of the diminishing No. of RR subscribers has been through an identical hoop it appears to me that professional legal advice is essential in his situation.

I'd suggest that the first step would be to approach Citizens Advice, quick scan of their FAQs led me to this page - https://www.citizensadvice.org.uk/r...-you-own-your-home-jointly-with-your-partner/

<<...What the court will look at
In the important case of Jones v Kernott [2011] UKSC 53, the Supreme Court set out some guidelines. The guidelines apply where a family home was bought jointly by a cohabiting couple who are both responsible for the mortgage, and where there is no express declaration of their beneficial interests. The guidelines are:

  • the starting point is that if you own the property jointly, then this would normally mean that you share the beneficial interest equally
  • this presumption can change by showing that you both had a different intention either when you bought the property or at a later stage
  • the intention is to be worked out from the conduct and dealings between you both
  • if it's clear that you both didn't intend to have equal shares from the beginning, or if your intention changed at a later stage and the court can't work out exactly what you intended, it will decide on the basis of what it thinks is fair and reasonable
  • each case will be considered on its own facts. Financial contributions are relevant but there are many other things that the court can take into account.
So, if you want to argue that the family home is not owned equally, you will have to show why your share should be different to the legal title...>>

Edited to Add: Re your...The military have thrown my partner under a bus with this and haven't helped at all!

I very much doubt it - The Ts & Cs would have been explained to the applicant and he would have to have signed to state that he understood those Ts & Cs.

Divisional advice should have pointed him towards seeking legal advice for his current dilemma, unless he has been telling you Porkies?

Tread very warily, Louise, and bear in mind that your OH was one the "two-to-Tango" in his previous relationship.
 
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Polto

War Hero
JSP 464 has all the answers, items 1237 and 1224 deal with this scenario. I'm having difficulty uploading the info from work but bottom line is that this is a debt that should be repaid immediately from the proceeds of the sale of the house . The money belongs to the crown.
 

Louise447

Newbie
Thankyou for your reply but I have been the one to deal with most of these issues it's been an ongoing problem for quite some time, as he is in the field quite often it's difficult for him to deal with this himself but when he is available he will also try and find information for himself. it has already been through solicitors once and actually I do stand by what I said by the military haven't helped I have searched myself, along with others to find in the application process the clear understanding where it states the "help to buy" scheme isn't a loan for the property purchased and I can honestly say we couldn't find it as he was then a first time buyer he didn't have much knowledge before hand. I appreciate the time and effort you have taken to reply to my comment but I am after advice if anyone actually has some light on the FHTB as after many letters and lengthy phone calls with solicitors, JPAC and the FHTB team themselves we still find ourselves none the wiser.
 

Polto

War Hero
Try this:

JSP 464



1224. Sale of FHTB Property. A participant in the FHTB scheme may sell or otherwise dispose of a property purchased or extended with the aid of FHTB. If a FHTB advance remains outstanding at the date of sale or other disposal, the claimant must immediately inform DBS Mil Pers, FHTB Section. The FHTB must be repaid immediately and in full (see paragraph 1242) or be transferred immediately to another qualifying property (see paragraph 1225). Failure to report the sale or disposal of the property or, if appropriate, to repay the outstanding balance immediately, will be regarded as a breach of the regulations (see paragraph 1244) and will result in interest charges being levied against the outstanding balance from the date on which the sale took place. In circumstances of foreclosure, the balance of the FHTB advance will be recovered from the capital released on resale.


1237. Effects of Divorce/Dissolution of Civil Partnership - Sale or Transfer of FHTB Property. A new FHTB applicant or FHTB recipient who is married or in a civil partnership who currently owns a property (or who has owned a property within the 12 months preceding sale or transfer) may be obliged to sell the property, or to transfer ownership of the property to the Service person's ex-spouse/civil partner, as part of a settlement on divorce or dissolution of a civil partnership. In these circumstances, the Service person would cease to be the legal owner of the property. Regardless of whether the sale/transfer forms part of a voluntary settlement or is by direction of a Court Order, the following regulations apply:


a. If the property, which is sold or transferred was purchased (or extended) with the aid of a FHTB, and the FHTB has not been repaid in full, the procedures for ‘Sale of Property’ apply; (see paragraph 1224).


b. If the Service person subsequently wishes to re-enter the housing market with the aid of a FHTB advance, the Service person may apply by virtue of meeting the extenuating circumstances in paragraph 1218.


c. In circumstances where a Service person is obliged to pay the mortgage on a property as part of a divorce settlement, that person may subsequently qualify for an FHTB under the conditions of sub-paragraph 1218 (4). However, when applying for any subsequent FHTB, applicants are to make any such financial commitments known to DBS Mil Pers, FHTB Section.
 

Polto

War Hero
It is not a loan, it is an advance of monies, or in old terminology and advance of pay. This is how they get around the need to charge huge interest rates. A small premium is levied instead often via the tax code.

Edit: Although this is interesting as regards to 'loan' status:
1205. Income Tax. In accordance with ITEPA 2003 Section 180, FHTB will attract an individual liability to tax (because such an advance is classed by HM Revenue and Customs (HMRC) as being a beneficial loan) if the average amount outstanding on this and any other beneficial loans55 during a tax-year exceeds £10,000. The amount liable to tax equates to the notional interest that would have been paid by the recipient had they taken the loan from a commercial lender (a rate set by HM Treasury). Where applicable, tax is normally collected by adjusting the individual’s PAYE tax code. However, if the property for which the FHTB advance was used to purchase is subsequently rented out, the entire FHTB amount will be liable to interest, charged at the HM Treasury rate.

Footnote reference 55 is this: Transactions classed by HMRC as beneficial loans, and so counting towards the £10,000 threshold, include all Advances of Pay, any public debt arising from Overpayments or Undercharging, Long Service Advances of Pay (LSAP) (JSP 752, Section 4) and any payment made under the Forces Help to Buy (FHTB) scheme.


Apparently it may be a 'beneficial loan'.
 
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silverfox

War Hero
Moderator
Book Reviewer
I've read your first post and I'm not quite sure where the issue lies. The advance has to be paid from the proceeds of the house, there is no disputing that fact. Rather it seems to me that issue is whether the FTHB repayment should be made from the proceeds of the house before they are split between them, or after ie they both take 50% and then your OH repays the FTHB advance out of his share. I am no expert but I think you would have to prove that the financial benefit gained by both parties in terms of the profit on the sale would not have been possible without the FTHB money and therefore should be repaid jointly, and then the residue is split between them.

If I've missed the point then I'm sorry
 

Polto

War Hero
If the ex is the one refusing to allow the money to be repaid then she (and yourself) ought to be aware of this, as should the solicitors: "1244. Breach of Regulations - Impact on Interest Charges. A FHTB will be interest-free except where otherwise indicated (see paragraphs 1222 and 1224). However, if the applicant commits, or causes to be committed, a breach of any of the conditions of the FHTB scheme, the outstanding FHTB will be converted to a Crown Debt and the Service person shall be required to pay interest from the date of that breach until the final recovery of all sums outstanding at a rate to be determined by the Secretary of State for Defence (normally at the HMRC Official Rate). This requirement does not affect any of the applicant’s other liabilities and obligations under the conditions of the FHTB scheme and at law. Any interest due will be deducted from the applicant's salary and from any terminal benefits to which they may be entitled".

This is my bit: The MOD place final responsibility at the feet of the service person with regards to repayment. But the rules do state that the money should be paid immediately from the sale of the house. The solicitor should not have the power to withhold the money from the MOD as it does not belong to the ex or the service person. This is public money. The rules are fairly clear on that. The ex can make as much noise as she likes. Do the MOD know where the money is?
 
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@Louise447 Polto has provided the JSP 464 'small print' with regard to the need for your OH to inform the authorities of the property sale and that, if not repaid immediately, then interest charges are levied against the outstanding balance from the date on which the sale took place.

Q Are the authorities at DBS Mil Pers, FHTB Section aware of the property sale? (If not they need to be informed PDQ)

Instead of/in addition to my earlier references to CAB the other avenues of professional advice open to you/ your OH can be found at: http://www.royalnavy.mod.uk/welfare/find-help/welfare-information-support


Introducing the Information Support Team

The Welfare Information Support Team is the first port of call for the Service Personnel and their families and friends who are looking for the advice, support and resources they need to deal with the rigours of life in the Royal Navy. These demands go beyond those of civilian life, such as pressures that come with separation from family and friends, or the potential dangers of deployment, to name just two.

ie What Information Is Available?


LEGAL ADVICE


There may be times that you require legal support. If this is the case and you are not sure where to start or how to access such support your Welfare Information Team will happily direct you.

Finally, be aware that, in addition to the Divisional system, the Unit Padre can always be relied upon to provide links to unlock seeming challenging issues such as yours.

Bob L
 

Louise447

Newbie
Brilliant I have printed parts off and highlighted them. I'm not sure if it's myself missing it out but I still don't see where it's clear the money from the sale of the house has to be used though? As this could obviously be used in our favour. See the solicitors holding the money assured my partner they had delt with these cases before and not to worry everything will have to be paid off before splitting the money 50:50 so he signed the paperwork there and then to accept the sale of the property to then at later date be told it's not a debt on the property it's classed as a personal loan so she will have to agree it gets paid off before they will pay the debt off back to the MOD, if he knew this he would never have signed the paper work. So it then caused a long line of stress eventually leading to this.
When he informed JPAC they didn't really seemed to bothered she just notified him that the interest will start to be charged if it's not sorted promptly, the lady on the phone said it doesn't matter how it's paid off, it doesn't have to be from the sale proceedings (after first telling us she wasn't sure so had to ask around) which was then why we have chased this up as like we see on the terms and conditions this can only be used on the purchase of a property so the argument is how is this NOT a debt on a house ? I apologise if I'm not getting the point. It's just all very confusing and long winded.
I of course would love to see it as he stands a chance in court but there's no hard evidence as of yet that really states this is 100% a loan on the property. Again, I'm very greatful for all your help thankyou.
 

Louise447

Newbie
Silverfox, No you have it bang on. I'm just trying to seek some advice to maybe gain some evidence that actually the FHTB could not have been used for anything else other than the purchase of that property, for this to then aid his appeal in court. they would never have been able to buy the property if it wasn't for that loan. However she doesn't see it in that way she's just looking at ££££ and making sure he walks away with nothing because in her eyes "it is his loan not hers"
 

Polto

War Hero
Try this:

JSP 464



1224. Blah blah blah. The FHTB must be repaid immediately and in full (see paragraph 1242) or be transferred immediately to another qualifying property (see paragraph 1225). Failure to report the sale or disposal of the property or, if appropriate, to repay the outstanding balance immediately, will be regarded as a breach of the regulations (see paragraph 1244) and will result in interest charges being levied against the outstanding balance from the date on which the sale took place.


There. Is that big enough for you? @Louise447
 

Polto

War Hero
It doesnt matter what way she or anyone else sees it. The money belongs to MOD, the solicitor is not allowed to hold it back.
 
Sorry to jump into this belatedly but it isn't quite as simple as the MOD having ownership of any money from the sale of the property. FHTB operates as an advance of income to be used specifically for the purpose of a deposit on a property. The MOD has no legal charge over the property (as opposed to the mortgage or a secured loan) and the solicitor has no responsibility to ensure that the outstanding balance is repaid.
The situation is mostly similar to a case of one party using their savings to provide a larger part of the deposit for the property. In that case the party who contributed more would be most likely to recoup that difference before the proceeds are split in the event of an amicable separation but in the event of a more difficult separation then normal legal proceedings would need to be taken to ensure that the financial split worked in their favour.
The SP does however have a responsibility to ensure that the FHTB is repaid on the sale of the property as that is the contractual claim stated in JSP 464 that your other half signed up to.
In a nutshell, the FHTB has to be repaid (or it will be converted to a crown debt and interest charged) and your OH will have to argue that he should receive that money from the sale of the property before any split in equity occurs.
Not really what you want to hear I'm afraid but unfortunately the sale and the FHTB are 2 separate entities. There is no reason to suspect that your OH wouldn't get that money back through the courts/settlement but it may not happen in the order that will work best for you.
 
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