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6 pitfalls to avoid when unmarried couples buy a house together

By Claire Ward

Mar 26th, 2021

6 pitfalls to avoid for unmarried couples buying a home together

Purchasing a first home together is an exciting time and, understandably, couples do not always consider the implications if the relationship were to breakdown in the future, and what steps they can take to try and avoid any potential future dispute as to ownership of the property. 

With a practical hat on though, it is important to consider, usually during the initial discussions regarding buying your house, what each of you intends to contribute and how you wish for that to reflect your share in the property.  Often couples contribute different amounts but still want to share the equity after the purchase 50/50. Other couples want their overall interest in the property to reflect their initial contribution. 

Where a property is held as joint tenants there is an automatic assumption that the property is held in equal shares.  Where both of you are contributing different amounts to the purchase, you may wish for the property to be held as tenants in common, perhaps in unequal shares. 

There are lots of options including fixed or floating shares in a property and therefore it is important to fully understand the options available.

Consider these issues to avoid pitfalls in the future:

  1. Does each party intend to share the equity after purchase equally, even if they are contributing different amounts?

  1. What will they each contribute to the outgoings of the property?

  1. In the event either of them were to die, what would they wish to happen to their share in the property, and would they wish to allow the other person to continue to occupy the property as their home?

  1. Are parents or family members providing financial assistance to either party and, if so, is it intended they will have an interest in the property?

  1. How would any third party providing financial assistance feel if their financial contribution was then shared between the couple in the event of a future separation?

  1. As most lenders also now require confirmation any third-party funds are a gift, are those funds intended to be a gift to just one party, or both? 

We would encourage you to have early discussions regarding each of your intentions. This can avoid future conflict and potentially significant legal costs if you were to split up in the future.  There are simple steps that can be taken to protect each parties’ interest including having a Declaration of Trust prepared, and in some cases also a Cohabitation Agreement. 

Our expert lawyers at Langleys have extensive experience in assisting couples purchasing a property together and we offer a free no obligation discussion if you wish to consider your options. We understand couples wish to deal with these issues amicably, and to feel reassured so they can then focus on moving in together.

To have a confidential discussion please contact us. Our initial conversation with you is free, no matter how long it takes.

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