Buying a house with a partner can be exciting, whether you’re just starting on the property ladder or moving up to a bigger home. While combining your income and savings can make buying a property more affordable, it’s essential to understand your legal position when you’re not married or in a civil partnership.
Legal documents such as cohabitation agreements outline financial arrangements and property interests and provide clarity and protection in cohabiting relationships.
Introduction to Joint Ownership
Joint ownership typically occurs when two or more people share property ownership. This can include married couples, civil partners, unmarried couples, friends, or family members.
How is ownership recorded?
In Scotland, the name on the title deeds matters. If you’re taking out a joint mortgage, both parties must be joint owners. When considering joint ownership, it’s essential to understand the structure of the title and whether it contains a survivorship destination.
Titles with Survivorship Destinations
When a title contains a survivorship destination, it means that when the first person dies, their interest in the title is automatically transferred to the surviving partner. A survivorship destination takes precedence over any Will you make.
Uneven deposit contributions
Recording when each party contributes a different amount to the deposit is essential. Suppose one person puts in a bigger deposit or pays more towards the mortgage. In that case, you may want to reflect this in how the property is owned by specifying different shares or protecting the bigger contribution. You can do this in a cohabitation agreement, which, amongst other things, will set out how the proceeds of sale are divided between the parties when the property is sold.
Seeking legal advice from a solicitor can help you navigate the complexities of joint ownership and ensure that your rights and interests are protected.
Why buy together?
When you buy a property jointly, you can often borrow more with a joint mortgage and get access to better properties or more competitive mortgage rates. Joint mortgages are accessible to first-time buyers and can increase borrowing potential due to combined income.
You’ll also share the deposit and split the monthly costs like council tax, energy bills and repairs.
Joint finances and fairness
Agreeing on who pays what might be straightforward initially, but documenting financial contributions and how money is shared or protected can prevent disputes, especially if the relationship ends. It’s worth tracking who pays the mortgage, household bills and maintenance costs. Doing so can help avoid arguments about who’s entitled to what if the property is ever sold.
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Navigating Your First Home Purchase in Scotland: A Comprehensive Guide for First-Time Home Buyers
Cohabitation Agreements
Cohabitation agreements are essential for unmarried couples who are buying a property together. These agreements outline each partner’s financial arrangements and responsibilities, including mortgage payments, bills, and other expenses. A cohabitation agreement can provide clarity and protection for both partners in case of a relationship breakdown. It’s recommended that both partners seek independent legal advice to ensure that the agreement is legally binding and fair.
A cohabitation agreement can also include provisions for the ownership of the property, including the split of equity and the process for selling the property.
Planning for the future
It’s important to consider what happens if one person dies or wants to sell their share of the home. Will their interest in the property transfer automatically under a survivorship destination or be inherited by someone else? Can you force a sale if the other doesn’t want to move? A well-thought-out agreement can provide clarity on these issues.
Protect your investment
It’s worth creating legal safeguards to protect your investment and relationship. A cohabitation agreement is one of the best ways to record how you’ll share ownership and contributions and what happens if things don’t go as planned. Our experienced solicitors can advise you on how to structure your property ownership and clarify everything.
Thinking of buying a home with your partner in Scotland?
Solicitors at Carr Berman Crichton deal with house purchase and residential conveyancing cases every day of the week. They are experienced in advising clients on all aspects of property purchase. If you are considering buying a house with a partner, contact Carr Berman Crichton today for expert advice and support.
