Legal advice - Tenants in common

[Emily Mackenzie]

Hello

I?m buying a property with my partner and have decided on being tenants in common. Our solicitor is being completely useless with offering any help on understanding about whether we should be equal or unequal tenants in common.

Basically I?m putting in all of the deposit (25%). My partner is paying 80% of the mortgage and I?m paying 20%. If we break up then we?d both want our contributions back and any profits (or losses) to be split 50/50. Does this mean we are tenants in common with equal shares but require a declaration of trust in place to state that we want what we put in back first? Or have I got this totally wrong and are we unequal tenants in common.

Any help you are able to give would be amazing - or if I can speak to anyone that would offer free legal advice. I?m already paying my solicitor ?900 to do this yet she won?t even answer my calls on the subject!!

Help please

[Siduhe]

No one on here can give you proper legal advice (including me) esp when you have your own solicitor - it would breach all kinds of ethics and conduct rules...but...the main difference between TiC and Joint Tenants is what happens when you die. As joint tenants you would own the property jointly and if one of you dies, their share would automatically go to the other person, regardless of any will. If you don?t want that to happen and/or want to own the property in unequal shares then TiC may be a better way to go. It is more complicated than that - there are variations you can put in place, so for example you can be joint tenants but add a stipulation that the first ?x on any sale goes to one party (good if one of you is putting up the deposit but you want to own jointly). The important thing is to have the agreement you?ve reached recorded somewhere. Doesn?t have to be on the land registry docs.

Which has a good and more detailed guide here. https://www.which.co.uk/money/mortgages-and-property/first-time-buyers/buying-a-home/tenants-in-common-vs-joint-tenancy-amlkh0x4ct97

Edited to add - in terms of being equal TiC or unequal TiC it?s completely up to you both what arrangement you want to put in the Declaration of Trust - again this may help - https://www.theguardian.com/money/2017/may/04/buying-tenants-in-common-what-happens-if-we-split-up. Appreciate this was more what you wanted ideas on.

[Angelina]

Change solicitors. There are many useless ones out there who drain your money and do sod all for it. Have no qualms about sacking them.

Likewise, there are many out there who are beyond competent - so choose wisely.

I've had experience of both - and the difference is huge.

It sounds like you're unequal shares, as you both have different contributions (and your contributions will change over time - as you pay off the mortgage.

1. You will have contributed 25% deposit and 20% of any payments (so, at the very beginning, you contribution will be most)

2. Partner will have contributed 80% of any payments (at the end, he'll have paid 80% of the mortgage, or 60% of the total)

if it was equal, you would both get the same amount regardless of contribution.

So you need a deed of trust to be drawn up. This needs to be as detailed as possible, so make sure you find a solicitor who knows what they're doing. If you fall out and end up arguing about it, this document will save all the pain. You don't want it to be ambiguous.

I found this

https://www.samconveyancing.co.uk/news/conveyancing/can-you-have-unequal-shares-in-a-property-4387

[emu]

Hi Emily,

Assuming that you and your partner are in a long term relationship I would think joint tenants would be a better option. You could have your solicitor draw up a declaration of trust stating what amount you put in to the deposit etc

and keep individual bank accounts so there is a easy paper trail of who paid what towards the mortgage in the event of a split.

Going down the tenants in common route you are going to have to be specific with the land registry of each of your percentage of ownership. Looks like that will vary over time as you would have the larger holding at the start but then in future your partner would be gaining equity by paying the mortgage.

https://www.which.co.uk/money/mortgages-and-property/first-time-buyers/buying-a-home/tenants-in-common-vs-joint-tenancy-amlkh0x4ct97

[Stephieee]

I think you need a new solicitor. My boyfriend and I are in the same situation. I have the money for the deposit and he will be paying more of the mortgage than me. Our way of seeing it is that we are a team and neither of us would be able to buy a flat/pay the mortgage without the support of the other. Therefore, if we broke up we would split whatever we have 50/50. The savings are in my name butni wouldn't have them without him supporting me working such long hours to earn it.

[worldwiser]

Hard to understand why your solicitor is being so evasive given that this is a completely standard part of the conveyancing process. There might be extra fees if a deed of trust is required but the advice should be included. Fire them, even if they wake up now I would have lost all confidence anyway. This is way too important.

[Take Note]

Totally agree with Worldwiser - this is precisely the sort of thing you are paying your solicitor to do and it is the most money you will ever spend on a single item so do it wisely.

I got burned very, very badly when my ex of 7 years and I split up after I put the whole deposit down on 'our' first house. I lost an awful lot of money due to a useless solicitor, an overly-trusting heart, and a w**ker of a BF. Good luck though - exciting times! :)

[Pugwash]

Declaration of Trust - we did this years ago as a relative put down 70% of cost, the 3 of us got a mortgage, myself and then partner were fully responsible for mortgage costs and 50% of council tax, water rates etc. When then partner and I split up - new Declaration of Trust making me fully responsible for mortgage etc. Worked very well

[Sally Eva]

As well as the legal ownership of the property, there exists the concept of beneficial ownership. This deals with the actual shares in the property that the legal owners are entitled to. There are two different types of beneficial ownership. These are joint tenancy and tenancy in common. 'Tenancy' in this context has nothing to do with renting accommodation.

17 Joint tenants own the whole property 'jointly and severally', which means that they do not each have an identifiable share in the property. Tenants in common do have a definite share in the property which each person can dispose of as s/he wishes. The most important practical difference is that on death, a joint tenant's share will pass automatically to the other joint tenant(s), whilst a tenant in common's share will pass under her/his will or the rules of intestacy, if there is no will.

17a It is best to record whether two or more buyers intend to own a property in equal or unequal shares. This may avoid dispute in the case of relationship breakdown, death or sale of the property.

17b The easiest way to record this is by making an express declaration of trust using a Land Registry form or a separate trust instrument. The buyer's solicitor or conveyancer will be able to help with this.

That is basic legal advice. You need proper, more detailed and more nuanced legal advice. Maybe your "solicitor" is just a legal executive which is not a solicitor or a conveyancer which equally is not a solicitor. This is basic housing law -- if your "solicitor" doesn't understand it he or she is not good enough.

[Emily Mackenzie]

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