Buying house - make arrangements if relationship breaks down?

Red-Squirrel_2

Whatever you decide, get it on a deed of trust sorted by your solicitor before you complete on the sale and make sure you have your own copy. Your boyfriend sounds like someone who might not be the most reasonable and might try and keep as much as he can when you do split up.

AndyBSG

I think a few of the posters on here are being a bit unfair WRT questioning the strength of the OP's relationship or how much of 'a catch' her OH is TBH.

OP has very sensibly asked for advice on both of them protecting themselves in the event the relationship fails, not for advice on her choice of partner.

On that front there are a few things to consider.

- How much is the OP stumping up for the purchase in total. Solictor fees, moving fees, stamp duty etc

- How much is the OH stumping up for the deposit.

For example if the deposit is £11,000, fees and moving costs are £1,500, stamp duty is £2,500 then the total upfront cost is £15,000.

If the OP is putting in £2,500 and her OH is putting in £12,500 then he is putting in £10,000 more than her. So, his 'additional' £10,000 is what should be protected, not the £11,000 of the deposit.(likewise if he is just putting in the £10,000 while the OP is putting in the £5,000 in fees and costs then he is only putting in £5,000 more so should only have £5,000 protected)

It's not fair for him to expect all of his 'share' to be classed as the deposit which is essentially a safe investment unless the property market collapses while her share is on all the costs that are dead money!

So, the agreement in the above case should be that if they split up and sell then he get's his £10,000 back and anything over and above that is split 50/50.

p00hsticks

I'd suggest that both parties should pay half the fees in buying the house and accept that neither will get that back if and when they come to sell - ditto with the costs involved in that selling process.
As far as the deposit, they need to consider and agree what happens in the various possible scenarios.

For example - what if property prices fall, and there isn't enough equity when selling to cover the original deposit value ?

What if on a break up one wants to remain in the house and refuses to sell ?

If the break up isn't particularly amicable, it can be very difficult for ex-couples to agree on what is an acceptable offer for the proeprty, and this is going to be worse if one party is adamant that they need to get their full deposit back.

[Deleted User]

I am sorry, but having been in not one but two relationships where I was expected to support my ex (slow learner) and allow the 'hims' to not pay their due.., I too would be a bit worried about the dynamics of the relationship. Its hard when you are 'in lurve' to see this clearly. But the fact that he expects to get his deposit back in full, ignoring your contribution to this deposit and the reasons why you don't have a deposit.., AND expect you to lose the fees without a second thought does indicate that the dynamics aren't too good.

And I think you know this deep down, otherwise you wouldn't have made a post on here.

Think carefully about this. If he won't negotiate now, when you have a relationship.., what is it going to be like if it breaks down? What if you have children?

I'm living it lol. I'm still trying to get an expensive mobile phone back from one of them lol (that I'm paying for, and don't always have enough for food for us but that makes no difference to him lol). And that's chicken feed next to buying a house expenses. With my first relationship, we did buy a house together.., I earned more than him but didn't put the deposit in - he was given the money from his mother.., the house was sold, I got zilch (ended up in a hostel with our child) and he got rather a lot of money. And I still didn't learn.

Are you going to be making a deed of trust? What happens to mortgage payments and will this translate into any share you get out of the house if you do split up. Painful as it is, it might be very good to discuss this thoroughly before you start paying fees.., and get the legal paperwork signed.

getmore4less

whats the rest of the dynamic.

who has been buying the food/takeaways?
who pays when you go out to eat or for a beer?
who pays on holidays etc?

kayleighae

Thanks for the advice, just wanted to put an update on. We had a second chat and what we are doing is counting my contribution the same as his. As we talked about it further, we agreed that neither would be able to continue paying the mortgage alone and we would be forced to sell if we could no longer live together. In that event, provided house prices haven't fallen he would get back his deposit and I would get back my contribution, any equity will be split 50/50. If house prices had fallen we would split the loss on a percentage basis.
I'd also like to add, I haven't been keeping a tally of how many nights he has stayed, mentally clocking up how much I could of charged him! I just added this info in for perspective, up until 2 months ago he lived with his mum, no rent / bills to pay which enabled him to save up a bigger deposit which is great. However, if he didn't have the opportunity to stay with me part of the week I think we both agree that he wouldn't of managed being at home with Mum for so long. Me keeping a rented house going alone has hindered my ability to save. Neither of us would be able to get the house without the other. As first time buyers I'm sure there will be a couple more discussions as we go along, but its good to find out other opinions. Thanks

Mojisola

kayleighae wrote: »

We had a second chat and what we are doing is counting my contribution the same as his. As we talked about it further, we agreed that neither would be able to continue paying the mortgage alone and we would be forced to sell if we could no longer live together. In that event, provided house prices haven't fallen he would get back his deposit and I would get back my contribution, any equity will be split 50/50. If house prices had fallen we would split the loss on a percentage basis.

Now get all that in writing with both of you signing it.

Innys1

AndyBSG wrote: »

I think a few of the posters on here are being a bit unfair WRT questioning the strength of the OP's relationship or how much of 'a catch' her OH is TBH.

OP has very sensibly asked for advice on both of them protecting themselves in the event the relationship fails, not for advice on her choice of partner.

On that front there are a few things to consider.

- How much is the OP stumping up for the purchase in total. Solictor fees, moving fees, stamp duty etc

- How much is the OH stumping up for the deposit.

For example if the deposit is £11,000, fees and moving costs are £1,500, stamp duty is £2,500 then the total upfront cost is £15,000.

If the OP is putting in £2,500 and her OH is putting in £12,500 then he is putting in £10,000 more than her. So, his 'additional' £10,000 is what should be protected, not the £11,000 of the deposit.(likewise if he is just putting in the £10,000 while the OP is putting in the £5,000 in fees and costs then he is only putting in £5,000 more so should only have £5,000 protected)

It's not fair for him to expect all of his 'share' to be classed as the deposit which is essentially a safe investment unless the property market collapses while her share is on all the costs that are dead money!

So, the agreement in the above case should be that if they split up and sell then he get's his £10,000 back and anything over and above that is split 50/50.

Not sure I agree with this.

Look at it as an investment - without the bf's deposit, the OP wouldn't have a hope in hell of buying the place based on her £2,500 plus any mortgage payments they made.

Any increase in value prior to a split should reflect the gearing the OP has benefitted from by being with her bf.

So, to keep the numbers easy, let's say the purchase price was £100,000, the value goes up £10k and, they have each paid in a further £2,500 as mortgage payments before they split. The mortgage balance when they split was £85,000 meaning a gross profit of £25,000.

The OP's total contribution has been £2,500 + £2,500 = £5,000.

His total contribution is £12,500 + £2,500 = £15,000.

Of the gross profit, he gets the first £10,000 - the protected amount - leaving a profit of £15,000 to be split between them.

She is entitled to 1/4 of that and he's entitled to 3/4 of that. So, the OP gets £3,750 and he gets £11,250.

At first sight it seems unfair - she gets less than she put in - but that's simply because the fees and stamp duty have eaten into her share of the small profit.

If instead, the property value had increased to £150,000 and they had each paid £10,000 off the mortgage, it would look much more rosy for the OP.

Her contribution would have been £12,500 and his was £22,500. The mortgage would have dropped to only £70,000 meaning a gross profit of £80,000.

He gets his protected £10,000 leaving a net profit of £70,000 to be split in the ratio of 12.5/22.5. She gets £25,000 of that and he gets £45,000.

By splitting any profit 50/50 beyond the deposit, the one who doesn't contribute any deposit gets a free ride.