What to consider when buying a house with your partner

Moving in with your partner or buying a house together is an exciting prospect but potentially risky from a legal point of view.  Unmarried couples do not have the same legal protection as married couples but many only realise this when it is too late and the relationship has broken down. 

If you are buying a property jointly with your partner consider carefully how you wish to hold that property. Consider the following:-

• The contributions each of you are making towards the purchase of the property.  Are you contributing the same or is one party contributing more?
• Are you both going to have an equal share in the property or is one party’s greater contribution, for example, being reflected in the way you hold the property.
• What will happen to the property in the event that your relationship breaks down?
• Are there children involved or could there be children in the future.
• Is the property going to be purchased in one party’s name with the intention that it will be a home for more than one party.
• What is to happen to the property in the event of one party’s death?

Giving some thought to the above at this stage can avoid problems in the future.  When purchasing your property your solicitor can draft a legal document to give effect to your agreement.  This means that if there is a dispute in the future when and emotions are running high what is going to happen with the property is clearly detailed in a legal document. 

The ways that your solicitor can help:-

(a) Your solicitor can draft a legal document (Trust Deed/Declaration of Trust) at the time of the purchase of the property so that both parties intentions in respect of that property are incorporated into a legal document and recorded at the Land Registry so there can be no doubt as to the parties intentions in the future.

(b) Cohabitation Agreement – your solicitor can assist you in drawing up a contract detailing the terms upon which you and your partner will live in the property.  The agreement can deal with who pays what and what will happen in the event that the relationship breaks down.  It may be that it is agreed that one party will vacate the property, and/or have the option of buying the other out etc.  If it was never the intention that the non-owning party would gain an interest, then this can also be clearly documented to avoid dispute and problems in the future.

(c) What do you want to happen to the property in the event of your death?  You can purchase the property as joint tenants or tenants in common.  If you hold the property as joint tenants and you die your share will automatically pass to the other party, however, if you do not wish this to happen you can hold the property as tenants in common and this way if you die your share will pass to whomever you nominate in your Will.  Again, discuss with your solicitor and they will advise you as to the best way to hold your property depending on your intentions.

(d)  What will happen if you die?  A house is a valuable asset.  Therefore it is important to make a Will. 

There are several benefits to making a Will:-

• Determine who benefits from your Will, you decide precisely which of your family and friends receive any or all of your assets.  Your Will allows you to be as detailed as you feel is necessary to fulfil your wishes.
• It may be that some of your beneficiaries are young children or teenagers. Preparing a Will allows you to stipulate to what age they will inherit your chosen assets and who shall control them until they are inherited. 
• Choose your own Executors.  Wills allow you to stipulate who will be responsible for ensuring your wishes are carried out and your assets distributed as you would like.  This gives you the opportunity to select the persons you believe most appropriate and most likely to be willing to take on this role. 
• For minimising inheritance tax.  Your solicitor will assess the level of assets and advise you on ways the inheritance tax payable out on your estate can be minimised thus reducing the financial burden on your beneficiaries when you die.
• You can make your own funeral arrangements.  You are able to state in your last Will and Testament the arrangements you would like to make for your funeral including any requests for a special venue or ceremony.