Protecting financial interests when purchasing a property
As the property market starts to get busy once again for summer, before you complete on a purchase of a property it is important to discuss the financial contributions that are being made to the purchase with your conveyancing solicitor.
When purchasing a property, especially when two or more parties are involved, it is crucial to ensure there is clarity as to the financial contributions that are being made, and to ensure each parties’ financial interests are protected. These issues often become important later on the breakdown of a relationship (whether the parties are married or not), or if one party dies.
If you are buying a house in joint names the default position is that the property is held as beneficial joint tenants. This means that both parties jointly own the whole of the property, and each have an equal (50%) beneficial interest in the equity in the property. If one joint tenant passes away, their share automatically passes to the surviving joint tenant, no matter what is stated in their Will or the different financial contributions that may have been made.
There are a number of ways in which financial contributions to the purchase of a property can be protected. A skilled and experienced solicitor will be able to discuss the options with you and advise you on the best options for your circumstances. This may include one or more of the following:
- Holding the property as tenants in common rather than joint tenants
- A Declaration of Trust
- A Nuptial Agreement
- A Cohabitation Agreement
- A Will
If money if being gifted by a third party, such as a family member, it is important that they have their own independent legal advice so that they understand the implications of gifting money.
It is crucial that these important matters are addressed at the time that the property is purchased and that a legally binding agreement is drawn up at the time. This prevents disagreements and misunderstandings that may arise later down the line, especially when it comes to determining how much each party contributed, how the sale proceeds should be divided, rights of occupation, and how mortgage repayments should be met.
At Butcher Andrews our experienced property lawyers can
advise you on all the stages of buying (and selling) a property which will include advising on protecting financial contributions. If you would like any advice on purchasing a property please do get in touch with us so we can discuss your requirements further.
Our telephone number is 01328 863131 or our email address is [email protected].
