Buying a property with a friend or partner? Protect your investment now
Are you thinking of buying a house with a friend or co-habitant? The Law Society is urging people to seek legal advice before signing an agreement to protect your estate and your investment.
Co-habiting couples or friends buying together have no protection on their initial investment when it comes to selling up and are not protected by law in the same way that married couples or civil partners are.
A solicitor can draw up a 'declaration of trust' that clearly outlines what share of the property each person owns. Without it, provided you hold the property “in common” you have a right to half the property but no more. If you own the property “jointly” your estate could stand to lose everything if you were to die before your joint owner.
These issues can be sorted out as part of the usual conveyancing process. So if you are investing a considerable amount more than your buying partner, protecting your money is a wise move. Even though a Declaration of Trust will cost a little bit extra now, it could save thousands in future.
Law Society president Nicholas Fluck said the rising property market means more people have to double up in order to afford a home, which is where problems often arise.
'As banks demand bigger deposits and house prices rise, the money at stake is considerable,' he said.
'Buying a home is a huge, expensive step, and of course it's exciting, but before signing anything, make sure your deposit is ring fenced. No one can predict the future, but if you need to sell the house for any reason and move on, it's better to come away with your fair share and avoid a messy legal dispute.'
For advice about joint property ownership or to talk about a Declaration of Trust please contact a member of our Residential Conveyancing Team.