Consider your options
When you are contemplating buying a property with someone else there are various factors you should consider:
Do you want to hold the property as joint tenants or as tenants in common?
If you hold the property with one or more persons as a joint tenant, then you hold it in undivided shares and the right of survivorship applies. This means that if one joint tenant dies, then the property passes automatically to the other joint tenants regardless of anything to the contrary in the deceased joint tenant’s will.
A tenancy in common allows you to have a specified share of the property which does not pass automatically to the other joint owners when you die. If considering a tenancy in common, then it is important to consider also making a will and a declaration of trust. The declaration of trust will set out the share of the property owned by each joint owner. If the joint owners have made unequal contributions to the purchase price, then a tenancy in common and declaration of trust should be considered
What do you want to happen to your share on death?
If you want your interest in the property to pass to the other joint owners when you die, then a joint tenancy will fulfill that requirement. If however you want to be able to pass your interest in the property under the terms of your will, then you may require a tenancy in common.
If you are buying with your partner and you are unmarried or not in a civil partnership, have you entered into a cohabitation agreement?
A cohabitation agreement sets out clearly a couple’s requirements in respect of, for example, the payment of bills, the division of household chores, and the settlement of assets in the event of a dispute. Such agreements can be tailor made to suit the couple’s requirements.
If you are considering marriage or a civil partnership, have you considered entering into a pre-nuptial agreement or a civil partnership agreement?
A pre-nuptial or civil partnership agreement acts in a similar way to a cohabitation agreement. Although it is important to note that pre-nuptial agreements are not, at present, legally binding in the courts of England and Wales, they can be considered by the Court and often are considered if the Court is asked to deal with a financial settlement following divorce. Recent case developments have shown that the Court may uphold terms of a pre-nuptial agreement if appropriate in the circumstances of the case. If such an agreement is required, it must be considered and completed well in advance of the actual marriage or civil partnership.
Consideration of these matters is important because, although it is hoped that relationships will be enduring, sadly that is not always the case and it is prudent to consider matters in advance because that can save time and money spent in litigation at a later date. When a relationship deteriorates, it can make you feel very upset and when you are feeling emotional, it is not the best time to have to deal with litigation.
If you wish to discuss any of these issues, please feel free to contact our Family Department on 01494 450171.