Dancing on Ice

Buying your first home together, filled with romance and belief that this is the way to show your commitment to each other, however research suggests that this tinted glasses approach could be leaving them financially vulnerable if the relationship was to run into trouble.

It is known that a very high percentage do not discuss who is entitled to what if the relationship was to break down and the vast majority have never heard of cohabitation agreements and that they could protect money that had invested in a property.

Double axle

Three are basically two ways in which a property can be split between a couple.

Joint tenancy

The most common when a married or cohabiting couple own a property is described as joint tenancy.

In essence the couple own 100 per cent of the property together.  Most opt for joint tenancy because they don’t know that they can divide ownership and wrongly believe they both own a 50 per cent share of the property.  Secondly some couples are aware they can divide ownership of the property but don’t want to and is common among married couples, they do not want to acknowledge that possibly in the future they may divorce.

In the event of divorce the Courts decision considers in the main if there are children involved and the age of the children is under 18. This could result in the property being awarded to the wife and the husband paying to keep the roof over their heads in the form of maintenance payments. If there is no children involved then the courts try to split the assets in as fair as way as possible.

Another issue with joint tenancies is that because both parties own 100 per cent of the property either can put the property up for sale at any time.

Tenancy in common

An agreement entered into by a couple or several individuals and this agreement clearly states the share of the property that each individual owns.  These have been available to homeowners for many years but are less common that joint tenancies despite the increase in cohabiting couples and friends buying together.

A tenancy in common agreement typically splits the share of the property 50/50 unless requested otherwise. There is a greater flexibility with this type of tenancy in that the amount of the property that each owns can be defined by the amount of money that each puts in at outset or by the percentage of the mortgage they pay each month.

It is also not possible for one partner to sell the property without the agreement of the other under a common tenancy.

An Outside Edge

A declaration of Trust or Cohabitation agreement is a further way to avoid unnecessary litigation if there is a break up but worth noting it is only used in combination with a tenant in common or joint tenancy agreement.

An Inside edge

Whatever your journey David Jordan Estate Agents will be with you to offer their years of expertise to guide you along the way.

Call us on: T:  01323 898414

or email us using the details on our website www.davidjordan.co.uk