Declaration of Trust

steeeb

Hi,

My girlfriend and I are in the process of buying a house. As part of the solicitors questions - we chose 'Tennancy in Common' and unequal shares. The main reason being that we are unmarried with no children, and I will be providing the whole deposit, all legal and mortgage fees and will be paying 100% of the mortgage. The percentage I chose was a 99% to 1% split.

My girlfriend originally ummed and arred about it, thinking it wasn't a "proper mortgage". After explaining it to her, she then signed it.

Fast forward to last night and her and her mum were discussing it on the phone and my girlfried is obviously unhappy about it. Her mum is adamant it should be 50-50, and feels like I'm just in it for an investment and that I am unsure of our future because of it.

But doing this is pretty standard for unmarried couples with no children, I'm protecting my life savings and my future financial commitment to the house.

Her mum is coming round tonight to talk about it. I've suggested they seek independant legal advice so they can have it explained to them - but they don't want that. Is there a way I can explain it to them, or something I can point them towards that might help the situation? I feel like they feel they don't trust me and I am trying to con my girlfriend - or preparing to pack my bags and get rid or something.

We are both legal owners to the house, the only different thing is that if it comes down to selling the property I get 99% of it. Obviously if we were to get married or have children, then this would change - but until then I have to surely protect my money - I'd be stupid not to.

Any advice would be really appreciated - as it's already started an argument.

Kynthia

Sorry I'm confused, you say you have children and then it appears that you are saying you don't. If you do have children then I think you are being very unfair to your partner as you are both contributing in different ways to you family yet you want to get your contribution back at the end of it should things go wrong.

If you are unmarried and don't have any children then I agree with you to an extent. All unmarried couples buying should discuss these issues first and have a Deed of Trust or a legal cohabitation agreement. However if you are putting in the whole deposit and paying the mortgage, why is your partner's name going down at all. Buy it on your own and add her to the deeds if you marry.

I personally think people who aren't ready to legally commit to each other should not take on a 25 year debt together (how many relationships last this long) with an asset that can decrease in value causing negative equity, and be difficult to sell should things end between you.

steeeb

Sorry, unmarried with no children.

The reason why I am not buying it in my own name, is that she wants to be on the mortgage so that it feels like the house is hers, although I am happy with either way.

We are buying this to be in a better financial state (It'll be cheaper to pay mortgage than renting, for instance - and the money will actually be going on something). And so that it can become our family home in the future - In which case I'd then change the deed of trust.

Richard_Webster

Sorry but I don't really understand why people are prepared to enter into the heavy financial commitment of buying a house together and yet aren't prepared to get married. OK a few folk do have principled objections to marriage as such, but for most it is a lack of commitment on one side or the other.

If you are prepared for one commitment, then you should be prepared for the other. If you are not sure about your commitment to each other such that you want a 99/1 agreement then you shouldn't be buying together.

SecondTimeBuyer

I have undertaken the same process. In our decleration of trust it is stated the first proceeds from the sale will be paid to the mortgage company, and then the deposit amount (which I am paying) will be paid to me, and if there is any profit from the sale it will be split 50/50.

This is fairly common in young couples who are unmarried and have unequal deposits.

steeeb

SecondTimeBuyer wrote: »

I have undertaken the same process. In our decleration of trust it is stated the first proceeds from the sale will be paid to the mortgage company, and then the deposit amount (which I am paying) will be paid to me, and if there is any profit from the sale it will be split 50/50.

This is fairly common in young couples who are unmarried and have unequal deposits.

Indeed. Now if you were paying 100% of the mortgage, 100% of the deposit then would the 50/50 split be different - and more like the 99/1 split I am doing? I assume that you are both paying equal amount to the mortgage which is why it is 50/50?

Kynthia

She isn't a child and should therefore know she can't always get what she wants. If she's not paying towards the deposit or mortgage repayments then she isn't buying a property and you are muddying the waters by putting her on the deeds.

I'm all for women financially protecting themselves in relationships but both people in a couple should be clear on what they are doing and what difference not being married can make.

Meadows

steeeb wrote: »

The main reason being that we are unmarried with no children.

But doing this is pretty standard for unmarried couples with no children, I'm protecting my life savings and my future financial commitment to the house.

Obviously if we were to get married or have children, then this would change.

Kynthia wrote: »

Sorry I'm confused, you say you have children and then it appears that you are saying you don't .

Where does Op say he has children?

OP I know you say she wants her name on the mortgage for it to feel like here house, fully understandable, but if you are both at the stage where you are committed enough to move in together you should be committed enough to have a joint mortgage, pay equal amounts into it and be equally liable for the costs if there are trust issues both sides, then maybe you are (one or both) not ready to take the relationship further right now)

Why not buy the house purely in your name making your girlfriend your tenant until such times that you feel 100% confidant that this is a secure relationship and you can then change the details, or commit to a total 50/50 split where she pays half the deposit, fees and an equal share of the mortgage.

DRP

Kynthia wrote: »

She isn't a child and should therefore know she can't always get what she wants. If she's not paying towards the deposit or mortgage repayments then she isn't buying a property and you are muddying the waters by putting her on the deeds.

I'm all for women financially protecting themselves in relationships but both people in a couple should be clear on what they are doing and what difference not being married can make.

^^yes, this. If she isn't paying for anything , then she shouldn't be contractually involved.

When we bought a house, my girlfriend supplied the whole deposit (~£26000) and we split the costs and the mortgage 50/50. She (bless her) waived any right to the deposit if we split, presumably relying on my good nature(!) - but I would certainly have supported her right to place such a condition.

I assume your girlfriend is not able to contribute currently? is the plan for her to contribute in the foreseeable future and is going to contribute to household bills etc from the start?

SuzieSue

What you are doing is entirely reasonable and you need to protect your investment. The fact that this has caused an argument involving her mother also indicates you have done the right thing.

Until you have children, there is no reason why she should get any more than 1% of the house if you split up as she isn't contributing towards it in any way.

Richard_Webster

If OP is paying 100% of the mortgage then why is the property being purchased in joint names?

Was the girlfriend's income needed to obtain the mortgage?

If that is the case is it really true that OP is paying 100% of the mortgage? Won't GF be contributing to household expenses in other ways? Doesn't she have some moral entitlement because he wouldn't have got the mortgage without her?

If her income wasn't necessary to get the mortgage then putting property into joint names looks like a sop to the relationship and is storing up problems for the future.

If there is a breakdown later on and she is joint owner then she can simply refuse to sign to sell the property unless she gets what she thinks she is entitled to. OP might have to go to court about it. If OP wins a court case against her then he may get an order for costs against her and that would come out of her 1% share. On a £250,000 property that 1% would be £2,500 and the costs could easily be more than that!

If looked at from the point of view of financial contributions it may well be almost impossible for her to justify anything like 50/50 but as I have already said, I'm not sure that is really the point. The prospect of disagreement over what share or interest she has in the property does not bode well for the future of the relationship and then the two of them may be shackled together financially for some years whether they like it or not. If house prices fall and there is negative equity it gets worse because it may then be very difficult to extricate themselves.