Guide to Buying a House Together
BUYING YOUR HOUSE TOGETHER - THE LEGAL CONSEQUENCES
If you buy a house or flat jointly with a husband or wife, fiancée, friend or colleague, it is very important that you understand and resolve what is often considered to be a rather tricky legal problem.
The all important question is: Should you be JOINT TENANTS or TENANTS IN COMMON?
Tenants in this context has nothing to do with leasing a property or paying rent. It is a legal term.
If you buy your house as JOINT TENANTS and one of you dies the survivor automatically becomes entitled to the whole value of the house regardless of anything that might have been in the deceased's will. The great majority of houses are owned in this way to ensure that the survivor inherits.
If, however, you buy as TENANTS IN COMMON and one of you dies, the surviving partner will not automatically be entitled to the whole value of the house and the ownership of the deceased's share will depend on the wishes of the deceased contained in his or her will (or be governed by the law relating to intestacy if that person has not made a will).
Where a husband and wife are purchasing the house, unfortunately, one cannot ignore the consequences of divorce; therefore, the way in which you jointly own a house should depend upon your individual circumstances, particularly if one or both of you has been married before. For example, it is not unusual for a divorced mother or father who remarries to want the whole or part of their share of the new house to be left to the children of their first marriage. (Obviously, the same thing is often true where somebody has been widowed and then marries again). If this were the case it would be essential to have a TENANCY IN COMMON and to make a will.
We particularly have to advise couples who are buying a house before they marry, or perhaps buying with no firm intention of getting married, to consider carefully whether they should choose to be TENANTS IN COMMON rather than JOINT TENANTS. As they are not related by marriage they are therefore not automatically each other's next of kin. Unless they make wills in favour of the other, on the death of one, the survivor will not automatically be entitled to the deceased's share of the house unless they bought the house as JOINT TENANTS.
However, one or both co-owner may decide that it was more appropriate for them to purchase as TENANTS IN COMMON as, once again, we cannot ignore the fact that some relationships may not be permanent; the house may have to be sold or, if possible, transferred into one name.
It is not unusual for one person to contribute all or a major part of the deposit, even where both contribute equally to the monthly mortgage payments. If one person is making a larger contribution towards the deposit on the house purchase then their larger share of the value of the house can be shown in writing by means of a simple Trust Deed which is then lodged with the Deeds. All that a Trust Deed does is to provide evidence of the joint purchasers' intentions as to how their shares in the house should be divided on a sale.
Where such unequal contributions are made a declaration can, of course, be signed to show that both joint purchasers nevertheless wanted an equal sharing. Without such evidence there may very well be a presumption in law that the value of the house be split unequally in direct proportion to the unequal contributions made towards the deposit.
WILLS
Finally, you will probably have realised how important it is to make a will especially if you are buying a house. A wife or husband does not automatically inherit the whole value of the deceased's estate which includes the matrimonial home; and if joint purchasers are unmarried and choose to be TENANTS IN COMMON, where no will is made the deceased's share passes to next of kin, usually pare
If you are buying a 'new home' our specialist New Build team can help , or if you prefer a more tailored face to face approach visit Classic Move.
