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Declarations of Love

It is a truth universally acknowledged that discussions about breaking up and finances, when you’re in love and buying a new house together, is about as unromantic as it gets. If you’re buying a property with your partner, and you’re not married or in a civil partnership, it is important to think about the long-term consequences and what you would want to happen, if the worst happened. It could save you a lot of heartache in the long run.


If you purchase a property in joint names, with both your names on the legal title to the property, there are different ways you can ‘hold’ the interests in the property. If you hold the property as what is known as ‘joint tenants’ it means that you both own the whole property together and not distinct shares in it. Holding the property this way means that if one of the co-owners were to die, the entire property would pass automatically to the surviving owner and not form a part of the estate of the co-owner who had died. This makes matters administratively easier, if you are both happy with that arrangement and wish for your co-owning partner to benefit from your interest in the property following your death.


If you want to leave your interest in the property to a third party, however, who is not a co-owner (for example children) then a joint tenancy is unlikely to be the best way of holding the property for you. In those circumstances, you should choose to hold the property as what is known as ‘tenants in common’. This provides each co-owner with a defined share in the property. If two co-owners purchase a property together as tenants in common, it is usually presumed that they each have an equal share in it, unless they have made a declaration of trust confirming differently.


Declarations of trust are documents which record an agreement between co-owners as to what interests they will have in the property. If, for example, you have each contributed different sums of money to the purchase or are intending to pay different amounts towards any joint mortgage, you can record that in a declaration of trust which can set out that you have agreed between you that, if you separate and the property needs to be sold, you will each receive the amounts set out in the declaration of trust (which usually correspond with your contributions to it). This can avoid costly and time-consuming disputes about who is to receive what following a breakdown of a relationship when tensions are running high, and both parties need funds to rehouse themselves.


If you are either contemplating purchasing a property with someone and would like some advice with regards to the creation of a declaration of trust to protect your interests, or you have already purchased a property without a declaration of trust in place and would like some advice on your legal position, then please contact, or call 01825762281 and we would be happy to help.


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