PLEASE READ BEFORE POSTING

Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.

We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
We're aware that dates on the Forum are not currently showing correctly. Please bear with us while we get this fixed, and see Site feedback for updates.

Finding a solicitor to draw up a floating Deed of Trust

I am planning to buy a flat with my partner and I would like to set up a floating Deed of Trust so that our shares in the property can change over time, reflecting the fact that one of us has a larger share of the deposit, but the other may be able to make higher mortgage payments.

I'm not necessarily asking for a specific recommendation of a solicitor (indeed I'm not sure the forum rules would permit this) but I'd appreciate any recommendations on how I would go about finding one.

Solicitors that I have contacted for conveyancing quotes have tended to add an extra £200-£300 to their quote when I mention a floating Deed of Trust, but when I dig a little deeper it seems they haven't really heard of the 'floating' part, and haven't taken into account that we might want some bespoke wording/formula for how our arrangement would work. I presume this would cost a bit more than £300!

I assume I should be trying to find a solicitor that can do both the conveyancing and the Deed of Trust but happy to be corrected on this.

Any guidance welcomed. Thanks!

Comments

  • Do you really need a floating deed.

    Might be easier to fix the % ownership at the start and just reflect the changes in debt as that is very easy to deal with.

    if the mortgage split will tend to be fairly constant this will work very well.

    In the simple example one of you pays 50% deposit and the other pays 100% of the mortgage.

    The ownership is 50:50 and never changes

    The one borrowing pays the debt from their share of the property.

    You can adjust the deposits and mortgage split to any values you like.

    eg 25% deposit 75% mortgage, split 25:50 to keep the ownership at 50:50.
  • Tom99
    Tom99 Posts: 5,371 Forumite
    1,000 Posts Second Anniversary
    [FONT=Verdana, sans-serif]In your situation I think I would come up with the formula myself and then ask for professional advise in putting that formula into legalese.[/FONT]

    [FONT=Verdana, sans-serif]Taking the full purchase cost, incl fees, if Party A is putting in 10%, Party B 20% and the mortgage 70% [/FONT]

    [FONT=Verdana, sans-serif]'On the sale of the property and after paying the sale costs and redeeming the mortgage the proceeds of sale shall be split as follows:[/FONT]

    [FONT=Verdana, sans-serif]Party A – 10% of the gross sale price less costs of sale[/FONT]
    [FONT=Verdana, sans-serif]Party B – 20% of the gross sale price less costs of sale[/FONT]
    [FONT=Verdana, sans-serif]The Remainder – split between Party A and Party B in the same proportions to which the parties contributed to the total of the mortgage repayment costs both interest and capital during the ownership of the property.'[/FONT]

    [FONT=Verdana, sans-serif]The above formula is far from perfect if expenditure is not evenly distributed over time. Say over 10yrs the property doubles in value then the month before you sell one party pays a large sum off the mortgage.[/FONT]

    [FONT=Verdana, sans-serif]Maybe incorporate a requirement that all mortgage costs are to be paid 50/50 unless agreed otherwise by both parties.[/FONT]

    [FONT=Verdana, sans-serif]If you are planning improvements to the property then how these are paid for will add further complications. [/FONT]
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
    10,000 Posts Fifth Anniversary Name Dropper Photogenic
    Such a formula will also need to take account of each partners non financial contribution. OP should keep a meticulous diary, lets say so that one hour cooking a meal for both is worth a fixed proportion of the payment made that month by the other (or perhaps a fixed sum per hour, indexed by CPI per year). Though if the meal is just for themselves, lets say making a lunchtime sandwich, then that doesn't count, or indeed if the meal is inedible then it becomes null and void.

    Of course, something like cleaning the bathroom would count as "income" (as otherwise you'd have to pay a cleaning service) unless that is cleaning up your own mess.

    Another issue, if one partner earns (say) double what the other does, then do you equalise it so that the higher earners money is worth half the others, or is the lower paid always permanently on catch up and what happens if perhaps there are children and one takes a lower paid job in order to do childcare? Though perhaps with so little trust between the two of them kids arent on the menu anyway.
    Anyway, I'm sure there is someone here with the necessary spreadsheet skills to rustle something up.
  • Tom99
    Tom99 Posts: 5,371 Forumite
    1,000 Posts Second Anniversary
    AnotherJoe wrote: »
    Such a formula will also need to take account of each partners non financial contribution. OP should keep a meticulous diary, lets say so that one hour cooking a meal for both is worth a fixed proportion of the payment made that month by the other (or perhaps a fixed sum per hour, indexed by CPI per year). Though if the meal is just for themselves, lets say making a lunchtime sandwich, then that doesn't count, or indeed if the meal is inedible then it becomes null and void.

    Of course, something like cleaning the bathroom would count as "income" (as otherwise you'd have to pay a cleaning service) unless that is cleaning up your own mess.

    Another issue, if one partner earns (say) double what the other does, then do you equalise it so that the higher earners money is worth half the others, or is the lower paid always permanently on catch up and what happens if perhaps there are children and one takes a lower paid job in order to do childcare? Though perhaps with so little trust between the two of them kids arent on the menu anyway.
    Anyway, I'm sure there is someone here with the necessary spreadsheet skills to rustle something up.
    [FONT=Verdana, sans-serif]You are correct to suggest keeping kids off the menu. They will be needed for sweeping chimneys and dusting the cracks their little finger can get to. Besides chicken is much tastier (so I am told).[/FONT]
  • Keep the buying separate from the living.

    Simple split is
    buying is the stuff a landlord would cover
    Living is the stuff the occupants would cover

    Do not mix them together.

    To get round the problems with changing payments on the debt you just split it into two virtual pots as if you have borrowed off the bank of M&D to buy the place, then treat the debt separate from the ownership.
  • Do you really need a floating deed.

    Might be easier to fix the % ownership at the start and just reflect the changes in debt as that is very easy to deal with.

    if the mortgage split will tend to be fairly constant this will work very well

    In the simple example one of you pays 50% deposit and the other pays 100% of the mortgage.

    The ownership is 50:50 and never changes

    The one borrowing pays the debt from their share of the property.

    You can adjust the deposits and mortgage split to any values you like.

    eg 25% deposit 75% mortgage, split 25:50 to keep the ownership at 50:50.

    First of all thanks for the sincere reply.

    So if I understand you correctly, we would each "own" part of the debt, and payments we each make on the mortgage would pay down our respective parts?

    The question then remains how this is reflected contractually if we are both named on the mortgage - i.e. surely the assumed legal position would be that the balance remaining on the mortgage at any point in time is split between us 50-50?
    if the mortgage split will tend to be fairly constant this will work very well

    Our situation is that the split will not necessarily be fairly constant. I can envisage a situation where we take turns maybe taking some lower-paying work and/or going back to education. In those circumstances one of us would support the other financially, but we would like our respective contributions towards home ownership to be reflected.
  • AnotherJoe wrote: »
    Such a formula will also need to take account of each partners non financial contribution. OP should keep a meticulous diary, lets say so that one hour cooking a meal for both is worth a fixed proportion of the payment made that month by the other (or perhaps a fixed sum per hour, indexed by CPI per year). Though if the meal is just for themselves, lets say making a lunchtime sandwich, then that doesn't count, or indeed if the meal is inedible then it becomes null and void.

    Of course, something like cleaning the bathroom would count as "income" (as otherwise you'd have to pay a cleaning service) unless that is cleaning up your own mess.

    Another issue, if one partner earns (say) double what the other does, then do you equalise it so that the higher earners money is worth half the others, or is the lower paid always permanently on catch up and what happens if perhaps there are children and one takes a lower paid job in order to do childcare? Though perhaps with so little trust between the two of them kids arent on the menu anyway.
    Anyway, I'm sure there is someone here with the necessary spreadsheet skills to rustle something up.
    It would be genuinely interesting to understand what motivated you to write this rather nasty and presumptuous response to a genuine question. Seems like you might have a little too much time on your hands. Being a new poster, I thought it would seem a bit rude of me to ask people with opinions like yours to refrain from commenting. So I didn't, and then up you popped. What a shame.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic

    The question then remains how this is reflected contractually if we are both named on the mortgage - i.e. surely the assumed legal position would be that the balance remaining on the mortgage at any point in time is split between us 50-50?

    The contract that the mortgage lender will ask you to sign. Will be on the basis of joint and several liability. There is no assumption involved. In effect the lender reserves the right to go after either party to recover any outstanding monies. Whatever you independently agree has no bearing on the outcome.
  • First of all thanks for the sincere reply.

    So if I understand you correctly, we would each "own" part of the debt, and payments we each make on the mortgage would pay down our respective parts?

    The question then remains how this is reflected contractually if we are both named on the mortgage - i.e. surely the assumed legal position would be that the balance remaining on the mortgage at any point in time is split between us 50-50?

    You both owe 100% of the debt, that's why you need another document to describe the real split of the debt.

    What happens in practice is the mortgage company take their 100% first but on paper you split that against your full share of the property before taking off the mortgage.


    Our situation is that the split will not necessarily be fairly constant. I can envisage a situation where we take turns maybe taking some lower-paying work and/or going back to education. In those circumstances one of us would support the other financially, but we would like our respective contributions towards home ownership to be reflected.

    To do that you need to separate the financial support into general and house buying.

    but that can get muddled in the head ie. one pays for both to go on holiday and you don't tot that up as an IOU but the mortgage payment will be.

    Sometimes it is easier to model this if you think of it as 2 separate loans.

    If one stops paying then their interest rolls up while the one paying it all pays off their debt quicker.

    There are other things you can do to smooth it out like modelling over payments as a reserve to cover later "payment holidays".

    The way we did it was to use an offset mortgage and filled up our offset pots with cash to reduce the interest sharing the benefit of that equally.

    We kept our regular payments the same throughout, years later the we now just own the place.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 348.3K Banking & Borrowing
  • 252.1K Reduce Debt & Boost Income
  • 452.4K Spending & Discounts
  • 240.9K Work, Benefits & Business
  • 617.2K Mortgages, Homes & Bills
  • 175.7K Life & Family
  • 254.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.