How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Stuart J Your Own Question

Stuart J
Stuart J, Solicitor
Category: Law
Satisfied Customers: 22400
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street Practice
11292137
Type Your Law Question Here...
Stuart J is online now

I need an agreement I am looking to invest £20,000 in a

Customer Question

I need an agreement

I am looking to invest £20,000 in a friends property which is half the equity in the property.

once I have paid this I will be liable for half the mortgage but have the rental income, I also want opportunities to opt out every 3 and 5 years so both parties can ask for the property to be sold

can you assist me
Submitted: 3 years ago.
Category: Law
Expert:  Stuart J replied 3 years ago.
Do you have a specific question?
Customer: replied 3 years ago.
as above can i have a leagal document that can be signed and witnessed

what question are you asking?
Expert:  Stuart J replied 3 years ago.






You can each own 50% of the property if, when you bought
it, you register it as tenants in common in equal shares.



You will also need a deed of trust which states that the
other person holds the rent on trust for you.



If there is no trust, or other agreement to the contrary,
when you bought the property, then regardless of what you each put in , either
at the beginning or in respect of the mortgage, it is split 50-50 when it is
sold.



The only way you can opt out of paying the mortgage is
for the other person to buy you out or sell the property.



If buying you out is not an option, then the property has
to be sold. Neither party can sell without the other's consent and if neither
party consents, the other is faced with making an application to court for an
order for sale. Although the reluctant party can be asked to pay court costs.
There is little point in having an agreement in respect of your right to sell
the property every three years or five years or when ever because if the other
party will not sell it, you are faced with going to court.



It doesn't matter therefore, whether you are going to
court to enforce an agreement to sell or simply going to court to compel him to
sell. The proceedings are exactly the same so why not save yourself the cost of
the opt out agreement?



Can I help further?



The next part is really important for me:



Please don't forget to positively rate my answer service
(even if it was not what you wanted to hear) and I will follow up any further
points you raise for free. If you don't rate it positively, then the site keep
your deposit and I get 0 for my time. If in ratings you feel that you expected
more or it only helped a little, please ask me for further info before rating
me negatively otherwise I don't get paid at all for my time and answer.

The thread remains open. Thanks

Customer: replied 3 years ago.

if there is a joint bank account, joint signatories and 50/50 split on all
monies in and out is there a need for a deed of trust? is a legal agreement
adequate without the deed of trust to safeguard the 20K invested by me
against my partner defaulting on mortgage payments, and therefore having to
sell the property?

If so can you do one?

Expert:  Stuart J replied 3 years ago.


You
will see that in the third paragraph, I said "If there is no trust, or other
agreement to the contrary,

when you bought the property, then regardless of what you each put in , either

at the beginning or in respect of the mortgage, it is split 50-50 when it is

sold."

Which
means that without a deed of trust, your £20,000 disappears into the pot and
you would lose 50% of it in effect. In fact, if the property ended up in
negative equity, you could actually lose it all!



Whether
you have a deed of trust or a legal agreement makes no difference whatsoever.
Because, quite simply, a deed of trust is a legal agreement. It is simply words.



It
is pure the construction of a deed which makes it a deed. Just a legal
agreement not drafted as a deed is of the same effect, but there is no point
not to do it completely properly to be sure.



The
deed of trust or legal agreement or whatever you do, would need covenants from
both parties to pay the mortgage to ensure the in the event of the other party
not paying their half (which would leave you totally liable for the whole
mortgage), then your payment of their half of the mortgage is preserved in the
equity.



I am
afraid that we are unable to draft or supply documents on here. Including
attending on you drafting the document and making sure it does everything that
you want it to do and suggesting that the other party takes independent legal
advice, you are into couple of hours work so expect to pay £300 or so. Plus VAT



In
view of the amount of money involved and the potential risk, it is better to
get it drafted properly now rather than have tens of thousands of pounds worth
of problems later . A stitch in time as the proverb says.

The next
part is really important for me:



Please
don't forget to positively rate my answer service and I will follow up any further points you raise for free. If
you don't rate it positively, then the site keep your deposit and I get 0 for
my time. If in ratings you feel that you expected more or it only helped a
little, please ask me for further info before rating me negatively otherwise I
don't get paid at all for my time and answer.

The thread remains open. Thanks

Stuart J, Solicitor
Category: Law
Satisfied Customers: 22400
Experience: PGD Law. 20 years legal profession, 6 as partner in High Street Practice
Stuart J and other Law Specialists are ready to help you
Customer: replied 3 years ago.

Hi


 


Disappointed at the end of the day i new i needed an agreement it was the type of agreement i required,


 


You offer advise but i am still no further down the road as you cannot do an agreement


 


You also believe that i bought the house which i did not i was intending to invest in the equity so he could release some cash


 


Feel i have gone around in a full circle and have been given advise to seek a solicitor!

Expert:  Stuart J replied 3 years ago.



I'm
sorry, but we simply do not draft documents because it is beyond the scope of
the questions and answer website.

Believe
it or not, if you both agree what happens upon sale, you don't need an
agreement because you have an agreement, a verbal one. It is perfectly binding
provided you both agree the contents of your verbal agreement. What you want to
do is avoid any arguments and hence the formality. Just a simple letter of
understanding and agreement between you, signed by you both, is the next step.
Ultimately, belt and braces is a deed of trust on which you both take advice from
different solicitors.



Investing
in the equity of a house and being responsible for half of the mortgage,
however you dress it up is buying a house. If you already own under the house
or he already owned the house, it is still a deed of trust. If you are going,
on the title deeds to the house, then it is a transfer deed and a deed of trust,
two documents.







Thereason I suggested d seeing a solicitor is quite simply because this could be, if it goes wrong, £10,000 or a £20,000 or £30,000 problem and the solicito
r will have professional indemnity insurance in case you need to make a claim
against him. I would certainly not suggest that you did a DIY job. Although,
provided there is never a falling out a DIY job can be perfectly adequate.

 

Even
if the solicitor does everything perfectly, you then have a properly drafted
document in support of the argument with the other party

 

Incidentally,you do not need the provision to be able to opt out every two or three years because that is an ongoing option for you although it will require both signatures whether you simply want to sell at any time or you have an agreement to sell every two or three or five years or whatever. If he will not sign the contract and transfer deed at that time, and give you your money, you are faced with an application to court, regardless of agreement or not.

 

 

Regards

What Customers are Saying:

 
 
 
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
< Previous | Next >
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
  • A quick response, a succinct and helpful answer in simple English. I believe I can now confront the counter party with confidence -- worth the 30 bucks! Rick
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
 
 
 

Meet The Experts:

 
 
 
  • Jo C.

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
< Last | Next >
  • http://ww2.justanswer.com/uploads/EM/emus/2015-7-7_192327_bigstockportraitofconfidentfemale.64x64.jpg Jo C.'s Avatar

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
  • http://ww2.justanswer.com/uploads/BE/benjones/2015-12-1_0437_ennew.64x64.jpg Ben Jones's Avatar

    Ben Jones

    UK Lawyer

    Satisfied Customers:

    11553
    Qualified Solicitor - Please start your question with 'For Ben Jones'
  • http://ww2.justanswer.com/uploads/BU/Buachaill/2012-5-25_211156_barrister5.64x64.jpg Buachaill's Avatar

    Buachaill

    Barrister

    Satisfied Customers:

    1754
    Barrister 17 years experience
  • http://ww2.justanswer.com/uploads/JO/jojobi/2013-3-19_0265_maxlowryphoto.64x64.jpg Max Lowry's Avatar

    Max Lowry

    Advocate

    Satisfied Customers:

    894
    LLB, 10 years post qualification experience
  • http://ww2.justanswer.com/uploads/UK/UKLawyer/2012-4-12_9849_F2.64x64.jpg UK_Lawyer's Avatar

    UK_Lawyer

    Solicitor

    Satisfied Customers:

    750
    I am a qualified solicitor and an expert in UK law.
  • http://ww2.justanswer.com/uploads/KA/Kasare/kasare.64x64.jpg Kasare's Avatar

    Kasare

    Solicitor

    Satisfied Customers:

    402
    Solicitor, 10 yrs plus experience in civil litigation, employment and family law
  • http://ww2.justanswer.com/uploads/OS/osh/2015-7-7_19268_gettyimagesb.64x64.jpg Joshua's Avatar

    Joshua

    Lawyer

    Satisfied Customers:

    8199
    LL.B (Hons), Higher Prof. Dip. Law & Practice