Question re: "tenants in common"

MattLcfc

Rollinghills wrote: »

All I can say is that if I had to think that hard about it I would probably not be buying a house with someone.

Have to agree with this.

jetfighter

Isn't it sensible to think about things and make a plan? Rather than just to go into things blindly?

I should probably point out I will be contributing a £65,000 cash lump sum towards the deposit which is the equity from my old home, and my partner will be contributing maybe £10,000 so there is a sizable difference here. Although it's not a pleasant thought I want to ensure that if she died, or our relationship broke down, I wouldn't lose out.

I have been a homeowner for 12 years and put a lot of work into a renovation project which has given me a very good profit. She has owned a new build property for 4 years and has not made much profit on it.

However she earns more than I do (approximately £400/month more) so can afford to pay a bit more on the mortgage to make up the difference in "percentage owned" over the years, if this is the sensible way to go about it.

I want it all to be as fair as possible for both of us, if the worst should happen, that's all.

jetfighter

C_Mababejive wrote: »

If you are a tenant in common, each partner can bequeath their share of the house to whoever they wish on death.

Imagine this..you both reach retirement age,,your partner dies and her/his share passes to someone else. They want their share,they force the sale of the house and the surviving partner is out on the street.

So are you saying that tenants in common is a bad idea? Hrmmm... or maybe tenants in common plus a will is best?

I'm finding the whole thing quite complicated. I guess we will need to discuss with a solicitor when the time comes as I would like for us both to have peace of mind.

Rollinghills

I'm just more traditional I suppose. When you become a family, all money is shared, there is no longer my money and your money. I know people do split up / divorce. But I would not live my life planning for it. I do realise many people think differently though.

In your case though I'm not even sure why you personally need any protection. You are proposing to own 75% of the property. That's what will be written in the deeds so by default you will own 75%. On the other hand your partner will own 25% and she'll have to prove her right to a higher share based on 50/50 contributions.

If you are going down that route I think Red-squirrel's idea is fair and easy to understand / work out. But again, it is your partner who should be more worried about this than you.

Your partner can write a will but can change it at any time without letting you know. This may however apply for either joint or common tenants (I'm not an expert on this though).

goodwithsaving

We can all offer opinions but at the end of the day (and after face to face professional advice) only you both can be sure of what is most comfortable for your situation. We had very different deposits but we both brought things to the table. We wanted to do it in such a way that we were both protected in the event of a separation but we wouldn't be operating a 'well you owe me this and I owe you that' whilst together. That said, we don't "share money". We pay our bill costs and then retain the remainder of our income separately. Unfortunately you can't predict the future but you can prepare for it.

jetfighter

Rollinghills wrote: »

I'm just more traditional I suppose. When you become a family, all money is shared, there is no longer my money and your money. I know people do split up / divorce. But I would not live my life planning for it. I do realise many people think differently though.

In your case though I'm not even sure why you personally need any protection. You are proposing to own 75% of the property. That's what will be written in the deeds so by default you will own 75%. On the other hand your partner will own 25% and she'll have to prove her right to a higher share based on 50/50 contributions. If anything she needs protection in this scenario.

If you are going down that route I think Red-squirrel's idea is fair and easy to understand / work out. But again, it is your partner who should be more worried about this than you.

Well, that's why I'm asking for advice for both of us, not just me. I was hoping there was some magical algorithm that I am just too "maths stupid" to figure out (was never my strong subject), but it sounds like it's all a bit more complicated than that, so I guess discussing with a solicitor is probably the best bet, especially considering we are going to need a solicitor anyway for the purchase.

Thank you all for your input.

getmore4less

jetfighter wrote: »

Isn't it sensible to think about things and make a plan? Rather than just to go into things blindly?

I should probably point out I will be contributing a £65,000 cash lump sum towards the deposit which is the equity from my old home, and my partner will be contributing maybe £10,000 so there is a sizable difference here. Although it's not a pleasant thought I want to ensure that if she died, or our relationship broke down, I wouldn't lose out.

I have been a homeowner for 12 years and put a lot of work into a renovation project which has given me a very good profit. She has owned a new build property for 4 years and has not made much profit on it.

However she earns more than I do (approximately £400/month more) so can afford to pay a bit more on the mortgage to make up the difference in "percentage owned" over the years, if this is the sensible way to go about it.

I want it all to be as fair as possible for both of us, if the worst should happen, that's all.

it does not work like that you own the % based on the debt you are servicing.

eg. say the £65k+£10k is 50% of value and you borrow the rest.

if she services £65k debt and you service £10k then you own 50:50.

On sale you split the proceeds 50:50 then pay of the remaining debt at the 65:10 ratio.

using equity basis works for all values of depoit and splitting the debt.

getmore4less

jetfighter wrote: »

Well, that's why I'm asking for advice for both of us, not just me. I was hoping there was some magical algorithm that I am just too "maths stupid" to figure out (was never my strong subject), but it sounds like it's all a bit more complicated than that, so I guess discussing with a solicitor is probably the best bet, especially considering we are going to need a solicitor anyway for the purchase.

Thank you all for your input.

There is and it works.

Rollinghills

jetfighter wrote: »

Although it's not a pleasant thought I want to ensure that if she died, or our relationship broke down, I wouldn't lose out.

I'm sorry if I misunderstood but reading the above makes it sound like it's you trying to protect your interests. But going back to your original post what you say makes sense.

A solicitor is a good starting point and there are some good ideas in this thread.

kingstreet

Tenants in common + deed of trust + wills.

Don't do any one or two without the other(s)!