Today’s debunked myth is for the unmarried, cohabiting couples. And this family-type is on the rise. Even the Prime Minister is doing it!
When a couple buy a property together, it is often the case that their contributions are not equal. Sometimes this in the form of one contributing more to the deposit, than the other. Sometimes, it is in the form of one paying more towards the mortgage. Often couples have understandings between themselves along the lines of “if we break up and sell the house, we will get back what we each put in”. Sometimes they don’t speak about it at all but each understand something different about what would happen on a breakdown of the relationship.
For a lot of people, particularly we ‘stiff upper lip British’, it is difficult to talk about money. I know I was brought up in a family where you don’t talk about it at all – it is rude. And in the early stages of a relationship, when you are so in love and can’t imagine life without the other person, you don’t want to be the person who says ‘Darling, I think we really need to put this down in writing, you know, just in case’. But please do! You can both think of it as a gift to your future selves, which you hope you will never have to use.
It is far safer for a couple to record their intentions in writing. If the intention is not to share the property in equal shares, then this can be recorded in an express declaration of trust. Your conveyancing solicitor can help you to prepare this document before you proceed with the purchase. If, for example, one of you contributes 75% of the deposit, you may wish to set out that that person owns 75% of the property. But if the other of you is, in return, going to pay more or all of the mortgage then maybe it will come out even and you want ownership to reflect that. Or maybe you want an agreement that you each get out the same percentage deposit you individually contributed, but after that everything is 50/50. These, and other agreements can all be set out in a declaration of trust.
If everything is set out in writing at the start, it will make matters easier as it will show, beyond doubt, what each of you thought you were doing when the transaction took place. Without an express declaration of trust, you may find yourself later arguing about past conversations and recollections of your respective intentions from many years ago which is uncertain and can be expensive and time-consuming to resolve.
For more information on the issues raised in this blog please do not hesitate to contact one of the team at Rayden Solicitors.