Every year, countless couples move in together unaware of how little legal protection they have when it comes to ownership of the home that they now live in. You can live with your partner for decades, but if things were to go horribly wrong and you end up going your separate ways, you could end up with nothing.
In Scotland and Northern Ireland, it is a different scenario; however you still do not have an automatic right to a share of your partner’s property. In order to avoid any potential disputes and make your position absolute, the best course of action is to have a legal agreement drawn up.
The law in its current form allows joint owners of a property to become Joint Tenants, meaning if one of them were to die, the survivor will own the property outright and all the equity that comes with it. Additionally, couples also have the option to become Tenants in Common. In this situation there is no survivorship clause, each owner owns a specified share of the property and the value will be split appropriately.
There are benefits in choosing either option, and whether you choose to go for Joint Tenants or Tenants in Common is down to your own personal circumstances.
If both individuals purchasing a property bring differing equity amounts to the table, then purchasing as Tenants in Common and having a trust deed drawn up may be the recommended course of action. This is effectively a “legally binding agreement” which is very much like a contract giving full protection over your specific contributions.
This document will allow both parties to outline exactly how they wish their current and future equity to be distributed resulting from a sale of the property, minus any sale costs.
While many may consider going down the road of drafting their own trust deed and using a colleague as a witness, choosing this path is not a recommended one. There could be nothing worse than discovering the document you thought was legally binding is in fact not worth the paper it was written on.
Finding a good, highly credible solicitor could not be more important to draft your trust deed. They will make sure the document ultimately reflects your wishes and crucially will ensure that it is “fit for purpose” and a recognised legal document.
In terms of what this may cost you, the region of £180 plus VAT is generally considered the norm for a standard deed. However, it can vary depending upon the intricacy of the document and the respective fee scales of the firm you choose.
Buying a home with your partner is a complex process and although you may think you will never part company, nothing in life is certain. There is a lot of money at stake when property is concerned and if anything was to happen, getting back what you invested could not be more important. Paying the sum of up to £200 to have yourself fully protected is a small price to pay in the long run and could be priceless in contrast to the cost of a property.
