Declaration of Trust re money lent to daughter

Guest101

MrGumby wrote: »

Wow! What a very quick and very helpful range of replies. Thank you.

I've taken all that on board and will discuss it with both of them.

She is getting a mortgage and I'm happy to satisfy the lender by making the money a gift. She does have a significant deposit of her own.

The lender has told her she can take a lodger (but will not take rental income into account in deciding the maximum loan, hence the need for my £60K).

I'd be happier if they bought together but she is reluctant to do so after an earlier experience. We need to decide whether boyfriend will formally be a lodger or just informally contribute the equivalent of rent towards the mortgage. I accept that a lodger doesn't share a bed with his landlord but can see significant problems with the latter arrangement.

Good point that it's worth paying for a solicitor's help. I'll do so.

He cant be a lodger, there's nothing to decide on that.

[Deleted User]

Seems a little unfair that she is not prepared to purchase a property with him but will quite happily have him live with her, contributing money towards her mortgage, bills, upkeep etc. The term 'cash cow' comes to mind. Is he happy with that arrangement?

AnotherJoe

hazyjo wrote: »

Did you have a deposit though? No (they didnt provide a deposit), that was my money Has the OP's daughter? No idea. Surely, if not, the property would be bought with 100% borrowed money. Correct Are they allowing that? Well yes thats the point. It also gets them a good mortgage rate as the LTV is lower.

Note, the crucial difference between this type of borrowed deposit and any other via say credit cards or a bank loan, is that mine (and the OPs) doesn't require repayments and I had to sign to that.

OP there is no need to make it a gift as long as the lender is OK with that. Not all are. You can always review at a logical break point, for example, when the fixed period of the mortgage ends.

MrGumby

Deleted_User wrote: »

Seems a little unfair that she is not prepared to purchase a property with him but will quite happily have him live with her, contributing money towards her mortgage, bills, upkeep etc. The term 'cash cow' comes to mind. Is he happy with that arrangement?

He seems relaxed about it but you're right to point this out. I think he would like to get engaged/married and buy jointly but she is wary after backing out of a long-term engagement a year or so ago.

I think a long discussion with them is in order, taking into account the wisdom offered here. I'm very grateful to all contributors.

visidigi

To be honest, we have friends that have done similar. And they resolved it this way...

Declared the original deposit from each side, so a contributed £x and b contributed £x.

In the case of split this is returned initially.

They then agreed to pay the mortgage 60% and 40%.

In the case of split this is returned accordingly - that way if money is made then they both see a return.

If money is lost its done so proportionately.

Seems to work for them and they have no issues - but they are both on the mortgage...

TBagpuss

Deleted_User wrote: »

Seems a little unfair that she is not prepared to purchase a property with him but will quite happily have him live with her, contributing money towards her mortgage, bills, upkeep etc. The term 'cash cow' comes to mind. Is he happy with that arrangement?

Why wouldn't he be? He would have to pay bills and rent if he were *npot* living with her, as their relatinship develops they can look at when they change the arrangements.

OP, your daughter and her partner could get a Cohabitation agreement set up which can explicitly state that he will gain no interest in the property as a result of contrinutions to the mortgage or bills.

You and she could get a declaration of trust drwn up confirming your insterest in the house - if your daughter is using a proper solicitor then they shouldbe able to advice on whetehr this will work with her specifc mortgage.

If the two of them do go on to get ngaged then a pre-nup would be a good idea whil they are not legally binding they are given weight by the court and certianly can't hurt! The courts have not given specifc guidance about how long a pre-nup will 'last' for although it is sensibel to review nad update them regualrly so they remain current.

Guest101

TBagpuss wrote: »

Why wouldn't he be? He would have to pay bills and rent if he were *npot* living with her, as their relatinship develops they can look at when they change the arrangements.

OP, your daughter and her partner could get a Cohabitation agreement set up which can explicitly state that he will gain no interest in the property as a result of contrinutions to the mortgage or bills.

You and she could get a declaration of trust drwn up confirming your insterest in the house - if your daughter is using a proper solicitor then they shouldbe able to advice on whetehr this will work with her specifc mortgage.

If the two of them do go on to get ngaged then a pre-nup would be a good idea whil they are not legally binding they are given weight by the court and certianly can't hurt! The courts have not given specifc guidance about how long a pre-nup will 'last' for although it is sensibel to review nad update them regualrly so they remain current.

Appreciate the source is not the best, but there are factual aspects to the article http://www.dailymail.co.uk/news/article-3525528/Judges-say-ignore-pre-nups-unless-couple-rich-Warning-majority-agreements-waste-time-courts-instead-base-decisions-fairness.html

mrginge

Guest101 wrote: »

He may have a claim if he pays rent, as he would gain a beneficial interest in the property.

Are you quite sure about this?

Guest101

mrginge wrote: »

Are you quite sure about this?

Yes, absolutely.

mrginge

Guest101 wrote: »

Yes, absolutely.

Go on then, enlighten me...