Buying A House Together - Deed of Trust?

Natbag

My partner and I are buying a house together. We're not married and don't have kids together (and don't plan to as we both have 2 each from previous relationships). He's bringing more equity/deposit than I am, but we'll both be paying half the mortgage and bills. We've agreed that if we ever separated, we'd take back our deposits and split any remaining equity 50/50 after all costs, and we wanted to have a legal agreement in place to enforce this. I believe this is called a Deed of Trust? And how much should I expect to pay for my side? He's already got a solicitor on the case, I know I need one too, but he's been quoted £600 just for his part, which I was really shocked by. 

gwynlas

Deed of Trust, Why would you need a second solicitor? Make sure that your wils are completed at the same tme I presume you will want to ensure each other is not homeless after first death but you aso need to think of possible sale and downsizing in the future

Natbag

gwynlas said:

Deed of Trust, Why would you need a second solicitor? Make sure that your wils are completed at the same tme I presume you will want to ensure each other is not homeless after first death but you aso need to think of possible sale and downsizing in the future

My partner is using a solicitor at the firm that's handling our house purchase and they've said I need my own third party solicitor. I guess that's in case we do split, we'd need representation each? We are also looking at wills as well, yes, to cover that scenario, as part of our house purchase and already have a life insurance policy ready to go to cover the mortgage on a reducing scale.

Natbag

A quick Google search suggests firms that can handle the process for £180 plus VAT, such as: https://www.deedoftrust.co.uk/
That's a huge difference in price, but how complicated can it be if we both agree on a straight-forward solution?

Savvy_Sue

Yes, each party needs independent advice for a deed of trust, because what's agreed may not be 'fair', which is fine as long as you're each happy with this. You need the independent advice to ensure you understand the implications.

Check out the £180 price but I'm guessing it's online? As long as they are proper solicitors, which I think they would need to be, so you can sue the pants off them if they mess up. :-)

Natbag

Savvy_Sue said:

Yes, each party needs independent advice for a deed of trust, because what's agreed may not be 'fair', which is fine as long as you're each happy with this. You need the independent advice to ensure you understand the implications.

Check out the £180 price but I'm guessing it's online? As long as they are proper solicitors, which I think they would need to be, so you can sue the pants off them if they mess up. :-)

We both agree on the terms, and both agree it's fair, we just need a legal document to enforce it.
That company is online, but it says most staff are solicitors/conveyancers and all have a degree in law, and all documents are legally binding in court.

justworriedabit

Hey OP
If I was you, I'd use a well established solicitors that are local to you and have a great feedback. It's worth paying a bit more to be 100% sure rather than going through a big mess at a later date. 
Slightly different but when we bought a property those selling were using online outfit and there were delays, but do your own research and decide.

PS. As others have touched on, a must is operate outfits to avoid conflict of interest.

getmore4less

Given the number of DOT that come her that are badly written get any proposals checked throw them up on here for more opinion that you probably want.

its not just the financial that need sorting but some ground rules on things that trigger a sale a buy out or other options.

We've agreed that if we ever separated, we'd take back our deposits and split any remaining equity 50/50 after all costs, 

How far apart are the deposits as sometime it can be much simpler to just go 50:50 on everything and have a side loan to cover the difference(it is the same thing as what you want but far simple to right down)

if there is a significant income/asset difference then things like paying for maintenance and upgrades need to be thought about.

Another problem is by doing it this way if there is a big difference in deposits it can make it a lot less fare especially as you are down at the start because of costs if you bought and sold instantly, it can take a while to catch up and gets worse if prices drop.

Natbag

getmore4less said:

Given the number of DOT that come her that are badly written get any proposals checked throw them up on here for more opinion that you probably want.

its not just the financial that need sorting but some ground rules on things that trigger a sale a buy out or other options.

We've agreed that if we ever separated, we'd take back our deposits and split any remaining equity 50/50 after all costs, 

How far apart are the deposits as sometime it can be much simpler to just go 50:50 on everything and have a side loan to cover the difference(it is the same thing as what you want but far simple to right down)

if there is a significant income/asset difference then things like paying for maintenance and upgrades need to be thought about.

Another problem is by doing it this way if there is a big difference in deposits it can make it a lot less fare especially as you are down at the start because of costs if you bought and sold instantly, it can take a while to catch up and gets worse if prices drop.

My deposit is roughly about £40k and his £75k - equity from our current properties.
Maintenance/improvements we are paying half each, we earn a similar wage - we're going to have a joint account for the mortgage, bills, food and anything else house-related including buying furniture or home improvements. We're both happy with ringfencing our individual deposits, and splitting anything more 50/50 as we'll both be putting in 50/50, should we ever split up.
I know things change, but we are both really pragmatic, laid-back, fair people and I really couldn't see either of us challenging this agreement, DOT or no DOT. But yes, I'm sure many people have said that! 

getmore4less

OK to start I would consider the easy option, there is a £35k difference in deposit   

If he lends you  £17.250 then you are equal apart from that debt, that is the same as what you are proposing  anyway just a simple way to look at it.

you can then leave it as a debt or come to an arrangement where it get paid off(or disappears over time)

Then everything else is 50:50  easy

Even if the finances are going to stay amicable on that paper exercise the problems often start with things like I will buy you out and it drags on for years because they(or maybe you) can't quite get the mortgage or some other delay.

You get a 5year mortgage and split after two and there is a big ERC to deals with....

The other big one is the can't pay/won't pay what are the ground rules if say one of you loses your job for 6 months and the other covers.

these are the conversations to have.

Then there is death scenario not a pleasant one to consider  beneficiaries gets a bit more complicated when you both have kids independently

A common approach for couples with the same kids is life interest but that can see kids never seeing their inheritance, grand kids might.
If relatively young in a new ish relationship a forced sale on death may be more appropriate, been together years life interest.

(It gets even more complicated if you don't have kids to leave stuff to)
 

Savvy_Sue

I may be missing something here, but, the OP and partner only need ONE firm of solicitors to draw up the DoT, surely, and the other firm to advise on it. 

To make this concrete, if he-Natbag pays £600 to get the DoT drawn up, all that Natbag needs to do is show it to the £180 crew who should be able to pick up any glaring problems with it.

Obviously Natbag will read it carefully and make sure it's all clear: anything they don't understand they will consult their £180 solicitor about, and he-Natbag will do the same if he doesn't understand anything.