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Perhaps you’re thinking about popping the question to your other half on Valentine’s Day this weekend? Research reveals, however, that you should maybe have a rethink and present something else this Sunday: Put a ring on it? Put a key in it more like! An European-wide ING International Survey reveals that 60% of people were more interested in investing their money into buying a home with their partner rather than paying for a wedding day.

Young & in love – what could possibly go wrong?

Hopefully nothing at all! But buying a property will in all likelihood be your biggest financial asset throughout your life and for that reason it needs to be protected. With the vast increases in house prices over the last year it makes sense for a lot of young couples to buy together; half the budget required and half the running costs.

Nevertheless, research shows that around 90% of couples don’t have a conversation about who is entitled to what should things go from heart-shaped to pear-shaped. Without an open discussion at the beginning, a lot of unnecessary problems can crop up further down the line.

What can you do to protect your money?

There are a few main ways to protect your money when you decide to either live with another person or buy with them.

  • Declaration of Trust – this legally binding document sets out the shares that each party has in the property. It is mainly used to, upon the subsequent sale of the property, outline how the proceeds will be divided. Both parties decide before hand what the proportions will be; it can reflect what each put in at the start or can take into account if a certain party pays for the bills and property running costs.

Within the declaration, sometimes called a Deed of Trust, you will be asked if you want to buy the property as Tenants-in-Common or as Joint Tenants.

  • Joint Tenants/Joint Ownership – If you go for this option then each party is a co-owner of the whole property irrespective of the initial sums of money each contributed. If one co-owner dies then the other co-owner automatically becomes the sole owner of the whole property and can do as they wish. Here both parties basically act as one and make one decision between them; one party can’t just sell their half or remortgage their own share.
  • Tenants-in-Common – In this agreement, each party has an individual share of the property, e.g. 70/30. If one party should pass away as a Tenant-in-Common their share gets distributed according to their Will or to the Rules of Intestacy if they haven’t made a Will i.e. it does not automatically pass to the other co-owner(s). It’s a popular option for friends or family buying together.
  • Cohabitation Agreement – sometimes known as a ‘Living Together Agreement’ and is made between two or more people living together. This sets out what happens to the parties’ assets if things do go wrong. It provides people with some certainty that their financial contributions will be protected.

To speak to one of our expert solicitors about how you can protect your assets when buying a property or to set up one of the following agreement, call us on 0161 930 5151.