Who owns the property?
If you are buying a new home together, your conveyancer should ask you how you intend to own the property.
If you are buying the property in joint names, there are two ways in which you can own the “equity” (i.e. the value) of the property.
‘Joint tenants’ means
- You both own the whole of the equity rather than each owning separate shares
- If one of you were to die, the whole of the property would automatically belong to the other, regardless of any provision in the deceased’s will
- Dividing the value would give each of you half the share of the property, since both of you are equal owners
‘Tenants in common’ means
- Each own your separate share of the value
- You can leave your share to whomever you want in your Will
- If you do not have a Will, your share will pass to your next of kin under the rules of intestacy
- Your shares may either be equal or something other than 50%, depending on what you agree and/or how much you have each contributed
If the property is legally owned by only one of you, in most cases the legal owner will be entitled to all of the value. However, the legal owner can own the property “on trust” for both of you in some cases.
A trust can be created:
- By an agreement recorded in writing
- Where the non-legal owner contributes to the purchase of the property, either by paying some of the deposit or repaying some of the mortgage (not just the interest)
- If the legal owner has made promises or both of you have shared an intention that the non-legal owner should be entitled to a share of the equity and the non-legal owner has relied on that to their detriment
If any of these conditions apply, the person whose name is not on the legal title may be able to prove that they are entitled to a share of the equity and that they can live in the property, even if the legal owner does not want them to do so.
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Wherever you have had financial help from your wider family to enable you to buy your property, even if their names are not on the legal title, you need to be clear whether or not you are holding the property on trust as a result of their financial contribution.
Whenever you own a property, either jointly or in your sole name, it is really important that you think about what you want to happen to the property in the event of your death. The property will form part of your estate and, in the absence of you having a Will, will pass to your next of kin who will not be your partner, if you are not married. It is therefore essential that you have a Will if you want your partner to inherit your property.
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