Buying a property and getting married are two of the major landmarks for couples as they progress through their lives. With the average age that couples are marrying on the rise, more and more people are jointly buying a property as unmarried partners. It is also becoming more common that individuals are contributing unequal deposits towards the property.
Laith Khatib, one of the leading solicitors here at Howells, says that some parties will often receive financial assistance from parents, which can lead to unequal contributions towards the property.
In the unfortunate event that an unmarried couple splits, each party is entitled to walk away with their own assets. This is of course unlike the separation of a married couple, where the division of jointly owned assets is dealt with according to divorce proceedings.
Mr Khatib, said: “If there is a disagreement, it is possible to ask a court to determine their rights, but that will be time-consuming, costly and stressful. The outcome of court proceedings will depend upon the unique facts of a particular case. However, the starting point for a court is always: where there is joint ownership, in the absence of clear evidence to the contrary, there is a presumption of equality.
“Consequently, if there is no evidence of an agreement to own the property in unequal shares, the partner who contributes the most may ultimately lose out. Similarly, half of any contribution made by a parent may end up with their child’s ex-partner.”
The advice the professionals at Howells give to unmarried couples buying a property with unequal contributions is to enter into a declaration of trust. A declaration of trust allows individuals to set out their respective shares in the property and to protect their own interests, as well as those of their parents. Such a provision should be put in place prior to the property being purchased, although it may be possible to do so after the event.
Mr Khatib added: “It is also a good idea to use a declaration of trust as an intention of equal ownership in the event of unequal contributions towards the purchase. With such an agreement in place, if the relationship were to break down then equal ownership would be honoured, irrespective of which party has made a bigger contribution.
“Also, if the party making the larger contribution dies or becomes incapable, those dealing with his/her estate will be bound by the declaration.”
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If you have found this article of interest and are yourself in a situation where you are contributing unequally to a property you are buying with an unmarried partner, call Mr Khatib at Howells Solicitors for a free initial consultation. Call 029 2040 4034 today.
