Buying a property with your partner can be an exciting time but if you’re not married or in a civil partnership, there are a few more things you’ll need to think about before taking the plunge and buying a property.
Jodie Purdue, one of our licensed residential conveyancers (and Partner), will talk you through her top tips for buying a property with your partner.
How will you co-own your property?
It’s really important to think about how you will co-own your property. There are two options to consider.
The first is as joint tenants. If you and your partner are joint tenants, you will both own an equal share of the property regardless of the amount of money you put into the property. As joint tenants, if one of you dies, your partner will receive your share of the property. This is called right of survivorship and overrules any will you leave.
The second option is as tenants-in-common. Tenants-in-common mean that both you and your partner own a specific share of the property. This could be an equal share or if you put in different amounts of money to the purchase, it could be an unequal share. As tenants-in-common, there is no right of survivorship either so you can choose who you leave your share of the property to in your will.
There are pros and cons to both of these and it’s important to talk these options through thoroughly before you start the process.
Do you need a Declaration of Trust?
A declaration of trust is a document that outlines who owns what proportion of the property. It’s a good idea to have a declaration of trust in place if you’ve put in more of the deposit than your partner.
You should also consider a declaration of trust if you or your partner has been gifted or borrowed money from parents or siblings for example. If you don’t put a declaration of trust in place, any gift or loan will be included in the whole ‘pot’ of assets. This means there is little protection for the person who was gifted or loaned the money to be in a position to get it back if something happens.
Parents are loaning their children money to buy their first home because of the large rise in house prices, and ‘Bank of Mum and Dad’ is rivalling the ninth largest mortgage lender in the UK. The amount being lent or gifted to family members is thought to be more than £6 billion in the next year. If your parents are lending or gifting you money, making a declaration of trust will make sure everyone involved is protected.
Make A Living Together Agreements
Couples who live together are not given the same rights as a married couple, even if you’ve lived together for years. Common law husbands and wives are a myth and as a result, both of you should seriously consider making a living together agreement, sometimes known as a cohabitation agreement.
You can make this agreement legally binding by asking a solicitor to make it for you or else, the agreement may not be enforceable.
There are a number of important things to include in your living together agreement. Some things are essential to make the agreement legally binding, so take advice from a specialist solicitor.
So if you’re planning to buy a property with your partner, you should plan ahead and make sure that you’re both protected.
For help with any of the issues in this article, call 0117 926 4121 or make a Free Online Enquiry now.