Joint home ownership can be a minefield, yet few homebuyers are made fully aware of the potential problems. To clarify the situation, the Land Registry has recently published an updated guide, jointly with the Law Society, for Conveyancing Solicitors.
The guide particularly stresses the need for joint buyers to be clear at the outset exactly what their shares and rights in the property are to be, and for this to be properly recorded.
If you are buying a home jointly with someone else, your Conveyancing Solicitor will explain to you the ways in which a property can be owned by two or more people. It is also likely that you will be recommended to have a document known as a trust deed prepared. This deed will set out in detail the shares in which you will own the property, and what is to happen if you decide to separate, or one of the joint owners dies or loses their job.
Many people buying a home jointly with someone else assume that they will automatically own the property 50:50, or that there will be a simple legal answer should a dispute arise.
Furthermore, too many people think that the same property laws which apply on the divorce of a married couple will also apply to unmarried partners. English law does not recognise so-called ‘common law marriages’ however, and many co-owners have found the law of little help to them if they have failed to make a clear declaration of their ownership requirements at the outset.
Property disputes often involve family members, friends or business partners who purchase property together. Even married couples or those in a civil partnership cannot always rely on matrimonial property law to help them. Things can get considerably complicated when one or both partners have been married before and have children.
The importance of having a trust deed
When your Conveyancing Solicitor mentions a trust deed, this is not just a ruse to charge you more. Although you will usually have to pay a modest extra charge, it can save you a lot of distress – and money – later on. Some recent cases have gone all the way to the Supreme Court, where the judges found it difficult to decide on each party’s entitlement in the absence of any express declaration.
Joint owners should be very careful regarding arrangements between themselves for repaying any mortgage. When a property is owned in joint names, each owner will be individually liable for the whole of the mortgage debt. This means that if one owner dies or disappears, the other owner will be liable to keep up the whole of the repayments unless the property can be sold and the mortgage paid off.
For more information regarding joint ownership or deeds of trust, contact our Conveyancing team on 0845 6435 785.