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Sharing the financial burden of a property purchase with someone else seems like a good idea... but is there a potential catch?
Buying a house with a friend or partner will certainly make things easier from a financial standpoint. You get to share the burden of paying the mortgage, council tax, bills, TV licence, any repairs that are needed... But there are a few factors you should consider at the same time.
Long-term and debilitating illness or injury, death, relationship breakdowns, and fallouts are all possibilities, and all of them have very real implications when it comes to your home and your assets.
Cohabiting with a partner or friend does not provide you with the same rights as a couple who are married or in a civil partnership. In turn, you do not receive the same level of financial protection should the unthinkable happen.
So what does this mean in real terms?
Complications can arise when one party wishes to sell and the other does not. You could find yourself being forced to sell whether you like it or not – with the only option available being the expense and stress incurred by challenging this in Court.
Similarly, bankruptcy on behalf of one of the parties, as well as death, can all leave the remaining party liable for the entirety of the mortgage, leaving them with no recourse but to sell.
So how do cohabitants protect themselves from these unwelcome situations?
Co-purchase agreements
At Shiells, we strongly recommend that all parties intending to cohabit with a friend or partner have a co-purchase agreement or “minute of agreement” drawn up. This legally binding document will protect both parties’ interests and assets in the event of a future dispute or unfortunate event.
The peace of mind alone is invaluable. To find out more about arranging co-purchase agreement, please get in touch with us and we will be only too happy to help.
Book a consultation with one of our property solicitors at Shiells by calling 01356 622171
You can also reach us by email or through the form below