Buying a home with your partner can be an exciting time, with lots of research to do, decisions to make and plans to put in place. It’s important not to overlook the legal considerations of buying a home with your partner as this can have a major impact on what might happen much further down the line.
There are many different relationship structures in place. You may have been married before, have children from a previous relationship, or you are newly married or in a civil partnership. Whatever your relationship set-up, it’s worth considering the legal options when buying a property together.
When purchasing your home with your partner, your conveyancer will ask you how you want to own the property.
What are the legal options of buying a property with your partner?
There are two different options when it comes to jointly owning a property.
- Joint tenants
- Tenants in common
A joint tenancy means that you will own the property equally, and if one of you dies, the other will automatically be given the full property. This is known as survivorship and means that your home cannot be passed to anyone else.
Joint tenancy is the traditional method of owning a home, but family dynamics have changed dramatically over the years and so when buying a new property, the type of legal ownership should be carefully considered.
For example, if you have children from a previous relationship, and you would want them to inherit your share of the home if anything were to happen to you, then joint tenancy would not be the right option for you.
Another thing to consider with joint tenancies is whether or not one partner contributes significantly more to the purchase of the property than the other. Joint tenants are presumed to own the property in equal shares. You could find yourself losing half of your contribution and it is unlikely you would be successful in challenging the position through the courts.
Tenants in common
The simplest way of protecting your financial contribution to the property is to outline your financial situation before you buy, which can be achieved by choosing the tenants in common option. In this scenario, you can decide exactly who will inherit your share of the property under the terms of your Will.
Another benefit of selecting tenants in common, is that if you break up at some point in the future, your shares in the property are clearly defined, and financial contribution you made at the outset will be protected.
If you and your partner contribute equally to the purchase of the property, you can still opt for tenants in common if you would like your share of the property to go to someone else in the event of your death. In this scenario you would set up the ownership as tenants in common with equal shares.
If you contributing unequal capital into the purchase of your new home then there are further considerations. Beside owning the property as tenants in common with unequal shares, you should consider creating a Declaration of Trust.
A Declaration of Trust clearly outlines each of your interests in the property as well as additional provisions for example: proportion of mortgage payment contribution, what happens if either of you are unable to pay and what happens if you separate. This will provide reassurance for both parties should you decide to separate at any point in the future.
As with many forms of legal agreements, the discussion is likely to be emotive and will need to be handled sensitively by both parties. However, it is sensible to put plans in place for the future, so that you can enjoy life today, knowing that you have planned for the worst-case scenario.
If you currently own your home as Joint tenants, and after reading this believe that it is not the best option for you then don’t worry. With both party’s agreement, a solicitor can arrange for your current tenancy to be severed and a new one set up.
Rucklidge Law are specialists in family law. We can help you with legal options when buying a property, or Declarations of Trust. Contact us for a free initial consultation.