In absence of any written agreement or provable mutual understanding between A and B (even though oral only) covering this situation it simply becomes a matter of market negotiation. B’s executors’ argument seems, prima facie, unfair to A. By having to waif for their monies A surely must benefit at least in part in the growth in value of the property post A’s death even though B continued to pay the mortgage.
Not sure either suggestion in your post is fair.
I think the figures involved are potentially important but we are not given these.
ARGUMENT 1
One argument might be that B continued in occupation effectively in exchange for discharging the mortgage. Thus B didn’t need to move home on A’s death but A received no monies ie had to wait until B died.
A and B then share in any growth in value of the property ie A and B now each get 50% of market value on B’s death less 50% of mortgage outstanding on B’s death.
ARGUMENT 2
B as owning 50% on A’s death effectively had a right to continue to stay there.
On B’s death B receives back the amount of mortgage B has paid off post A’s death. A and B then each take 50% of property’s market value at date of B’s death less 50% each of the outstanding mortgage on B’s death. B has then effectively lived in the property". rent free" but A now shares in the growth in market value of the property post A 's death.
ARGUMENT 3
There has to be an incentive for B to continuing paying off the mortgage and for A to have to wait for the monies on a sale.
This might suggest A and B each get 50% of market value of property on B’s death less 50% of outstanding mortgage on B’s death.
ARGUMENT 4
B has lived in the property albeit in exchange for paying the mortgage, say.
On A’s death he would have been entitled to 50% of the property’s then market value less 50% of the then outstanding mortgage; assume net figure 100.
On B’s death A is entitled to 100 compounded until B’s death at say 5% (or whatever % selected). A is making an investment for a fixed rate of return whereas B is gambling on the movement in the market value of the property between A’s death and B’s death.
The possible arguments are endless. As mentioned above, the figures may affect which possibilities are “fair”.
Malcolm Finney