Buying a House with your Partner: What you need to consider

This is an exciting time; you are buying a house – it’s exciting life is good. What could go wrong? Well, it’s our job to consider things that could go wrong, even though you may not want to think about it, and plan solutions

What could go wrong; dispute, debt, divorce, death.
What can we do now to alleviate as much risk as possible?

Firstly, you have a choice over how you own the legal title. The first option is called Joint Tenants and it means you both own equally. If one of you were to die the other would own the property outright with nothing much to be done. If you were to fall out though the standard position is that you both own equally. Joint tenant may not be appropriate for many reasons; one of you contributed more to the deposit or the monthly mortgage payments; you own other property and may wish to benefit from tax advantages of separate legal ownership; you have children from another relationship and want to leave your share to them should anything happen to you.

Your second option is holding the legal title as Tenants in Common. This is where you both own a divisible share. This shares can be equal, i.e. 50/50 or any share that relates to contributions made or to be made or that would be more beneficial in terms of tax or estate planning/wealth management. This is often more advisable for unmarried couples, buy to let investors and those with second families to consider. Once you hold the legal title in divisible shares you should document those shares with a Deed of Trust. The Trust is how the equity in the property is held, i.e. what shares and deals with who gets what on a sale, dispute or divorce.

These simple options require an individual approach and professional advice after careful consideration of all the aspects of the transaction. Of course there are other options such as Bare Trusts where the property is in one name but held solely for the other partner. We could go on and on. Indeed, the beauty of property law is that its flexible and can be designed to fit individual circumstances. It is important to find an experienced and knowledgeable property solicitor rather than a transactional conveyancer who may be more concerned with the volume of completions than in tailoring each transaction. it is important to ask these questions when getting quotes and I have had clients interview me before formally instructing the firm, but those clients are now fully protected against the risks inherent in co-ownership

This articles is written by Bernadette McDonald who has over 15 years of experience dealing with residential and commercial conveyancing and property disputes and heads the property department at bmd:law.

This article is a summary of considerations and options and is not intended to constitute legal advice. It does not contain all the options available. If you require further information, please do not hesitate to contact Bernadette on 0151 722 8004