cohabiting - what would you do?

Vincent.waldorf

Kynthia wrote: »

Are you buying together or are you buying and you both will be living together? It's an important distinction and changes what actions to take. So have a chat together and work this out first.

If you are buying on your own and she is going to live with you then you need to consider protecting your asset from any future claim and she needs to protect herself from paying money into an asset she has no claim on. She'd is not legally your lodger as you will be living as a household. It's also not fair to charge her half the bills, mortgage, decoration and repairs when she is left with nothing should you split. That doesn't necessarily mean she lives there rent free either but come up with a fair amount of reduced 'contribution' together. Also I might be wrong but a deed of trust is usually when buying jointly but a cohabitation agreement might suit your needs (google on Shelter's site).

If buying jointly with the intention if splitting all bills, mortgage and maintenance costs but you want to protect your deposit then get a deed of trust. You can either own unequal percentages or have it that you get your deposit back and any remaining equity is split between you. Don't forget to put in there what happens if the house is worth less and what happens if you break up. So both discuss this and come to an agreement. This all is the same even if it's all just in your name but the intention is that you are in it together.

I'm sure you both want to protect each other as you love each other so the best thing to do is make sure you are both clear on what the plan is and what it is you both want out of it. Misunderstanding and lack of communication is the enemy.

I just wanted to put it out there but his GF would have had to pay someone else rent and bills anyway so why would she have any future claim to his assets?

If you were to rent out a room you go in knowing that if you walk away i.e. end your tenancy then you are left with nothing. why would it be different even though they were your BF/GF?

She came in with nothing and should leave with nothing right??

Kynthia

vincent.waldorf wrote: »

I just wanted to put it out there but his GF would have had to pay someone else rent and bills anyway so why would she have any future claim to his assets?

If you were to rent out a room you go in knowing that if you walk away i.e. end your tenancy then you are left with nothing. why would it be different even though they were your BF/GF?

She came in with nothing and should leave with nothing right??

If the girlfriend lives in his house then it isn't a purely business arrangement like having a lodger and people need to be aware of that, that's all. They will be living together as a household which is why tax doesn't need to be paid on the "income" like with a lodger. I personally don't think it's fair to 'profit' from a partner like you would a lodger for the same reason, the relationship is not a business but that doesn't mean I think 'rent free' is necessarily right either. I'm not saving she would definitely claim a beneficial interest in the property or whether or not she would be successful. As long as they are both clear on what the situation is then they can come up with their own fair agreement on contributions. For some people that's half the bills only, for others it's market rate rent for a lodger plus half the shopping.

As long as they are both aware on whether they are buying jointly or she is just moving in, and then agree between them what is fair, then that's the main thing. The problem is that sometimes people move in together without making this distinction, either to each other or even themselves, and it can make things messy in the future.

Vincent.waldorf

Kynthia wrote: »

If the girlfriend lives in his house then it isn't a purely business arrangement like having a lodger and people need to be aware of that, that's all. They will be living together as a household which is why tax doesn't need to be paid on the "income" like with a lodger. I personally don't think it's fair to 'profit' from a partner like you would a lodger for the same reason, the relationship is not a business but that doesn't mean I think 'rent free' is necessarily right either. I'm not saving she would definitely claim a beneficial interest in the property or whether or not she would be successful. As long as they are both clear on what the situation is then they can come up with their own fair agreement on contributions. For some people that's half the bills only, for others it's market rate rent for a lodger plus half the shopping.

As long as they are both aware on whether they are buying jointly or she is just moving in, and then agree between them what is fair, then that's the main thing. The problem is that sometimes people move in together without making this distinction, either to each other or even themselves, and it can make things messy in the future.

Whilst I understand your point, I would not charge my wife rent even though I bought the house before we met BUT if we were thinking about this in terms of finance she would have spend £X renting another place anyway right? I don't think it would be right that she would have a financial claim on HIS assets. If they were not together then she would have had to pay rent+bills eitherway anyway.

I think to preserve the relationship put her name on the mortgage with a fair mathematical calculation on how things a divided in the worst case ... the only complication is that she would never be in negative equity because she has none ... !

Errata

vincent.waldorf wrote: »

I think to preserve the relationship put her name on the mortgage with a fair mathematical calculation on how things a divided in the worst case ... the only complication is that she would never be in negative equity because she has none ... !

That's an important point. Negative equity could mean the OP loses £10k of his deposit and she loses nothing, if it's sold. If it increases in value, his deposit has gone some way to earn that increase, whereas her £0 deposit earns nothing.
A 50/50 split of any profit or loss isn't what it seems to be on the face of it, and needs some careful and sensible thinking about

getmore4less

If done properly any negative equity can be accounted for in a fare way.

It is really easy to do the numbers.

The issue is how to get the money at the time.

Kynthia

vincent.waldorf wrote: »

Whilst I understand your point, I would not charge my wife rent even though I bought the house before we met BUT if we were thinking about this in terms of finance she would have spend £X renting another place anyway right? I don't think it would be right that she would have a financial claim on HIS assets. If they were not together then she would have had to pay rent+bills eitherway anyway.

!

I think the ability to claim a beneficial interest in the property is more intended for those who live as husband and wife for many years, probably pooling their income, maybe even having children, one working less for child are reasons, etc, but never married and for some reason the family home is only in one of their names (perhaps owned before the relationship or because one had bad credit in the past). Then they split and the non-owner is kicked out with nothing, they then try to get some share by claiming beneficial interest. However that's not to say that those who were never meant to have any don't later try to claim it to. So it's just best to be aware.

bobcratchit

Some really important stuff here which I'm trying to compute.

If I'm honest I'm looking to buy a house at the same time as being with my girlfriend rather than we are 'buying together' and I'm glad that distinction has been made black and white for me.

If that's the case then keeping just my name on the mortgage and having her pay a reduced rent seems like the most sensible option. Can I use this rent for my mortgage payments without there being a risk of say two years down the line and we split that 'beneficial interest' would come into play? Or, is it more as Kynthia stated that that only happens in much longer term cases and usually with children involved etc?

My girlfriend could always put away the money she saves from the reduced rent into an account to use for either a deposit or for us to share should we commit long term?

dotdash79

Beige wrote: »

I don't think the mortgage company would allow the partner to have an ownership claim on the property, since the mortgage is only in the name of the OP.

If you put the mortgage company at the top of the deed of trust they won't care. so the order is when a property is sold:

Mortgage company
Legal and selling fees
Deposit
Anything left is split between the two.

thequant

bobcratchit wrote: »

Some really important stuff here which I'm trying to compute.

If I'm honest I'm looking to buy a house at the same time as being with my girlfriend rather than we are 'buying together' and I'm glad that distinction has been made black and white for me.

If that's the case then keeping just my name on the mortgage and having her pay a reduced rent seems like the most sensible option. Can I use this rent for my mortgage payments without there being a risk of say two years down the line and we split that 'beneficial interest' would come into play? Or, is it more as Kynthia stated that that only happens in much longer term cases and usually with children involved etc?

My girlfriend could always put away the money she saves from the reduced rent into an account to use for either a deposit or for us to share should we commit long term?

No money from her should be used for the mortgage or being spent on any improvements on the house. Any money from her that increases the equity in the house automatically creates beneficial interest.


Simple fact is you cannot treat her as a lodger and GF at the same time. If she was a lodger you would have to pay tax on her income, If she was a lodger and became unemployed she could claim housing benefit.


But she is not a lodger, you cant pick and choose the best bits of having a GF living with you and a lodger. It's one or the other.

Errata

The money situation is so completely out of balance, I'd suggest a sensible way forward would for both of you to separately take sound legal advice and base your discussions on that.
It's hard to believe she doesn't have as much as a red cent to put down as a deposit, and I think you need to understand the reasons for that.