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Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10347
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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Hi, My partner wanted to buy a house to renovate and sell,

Customer Question

Hi,

My partner wanted to buy a house to renovate and sell, but fell in love with a property that was more expensive, so I offered to take a further advance on my own property to go in with him as a short term investment, the house has been offered for £45,500, and I'm putting in £10,000....just looking to get some kind of legal agreement between us to show that I will be entitled to 21.97% of the profit once it's sold minus what he's spent on the house to do it up...the only things is as I've taken out a further advance on my house I'm paying £80 a month for the £10,000 should I expect to get some of part of that money back, I'm not looking to stiff him I just have no idea what I should expect and this is a business venture for me??
Submitted: 2 years ago.
Category: Law
Expert:  Aston Lawyer replied 2 years ago.

Hello and thanks for using Just Answer.

My name is ***** ***** am happy to assist you with your enquiry.

To enable me to answer you fully, could you please confirm that you will be buying the property in joint names?

If the property is to be purchased in your Partner's name alone, could you confirm if he is having a Mortgage?

I look forward to hearing from you.

Kind Regards

AL

Customer: replied 2 years ago.

That's the other thing, I'm not sure about...should I be down on the deeds?? at the moment he is going to be buying the house in his name only for cash no mortgage is required as I'm giving him the money....I already have my own mortgage in my own name from a previous relationship and wasn't sure about being put on the deeds for the new house as well.....also we are not planning on keeping the house.....but I really do need some kind of protection I trust him but I need to make sure that I'm ok??


 


Many Thanks


 


Andrea

Expert:  Aston Lawyer replied 2 years ago.

Hi Andrea,

Thanks for your reply.

As regards ***** ***** going on the Deeds, this is not essential to enable your interest in the property to be protected. If you are happy for your Partner to buy the property in his sole name, then what needs to be done is as follows;-

1. a Declaration of Trust needs to be drawn up and signed by you both.

2. a Land Registry Restriction needs to be entered by your Partner's Solicitor at the time he registers him as the new owner of the property.

The Restrction will say that no sale of the property can proceed unless a written certificate is signed by you. This Restriction therefore protects you and prevents your Partner from selling the property without your consent (which I am sure would never happen, but is always best to have this in place.

Turning to the Declaration of Trust, this will confirm that although your Partner is the sole legal owner of the Property, that he holds a share of the property on trust for.

It will also detail exactly what your financial interest in the property equates to.

You are correct that your interest should equate to 21.97% of the profit less any monies spent by your Partner.

The only tricky point is should you also be entitled to any further monies bearing in mind your mortggae payments.

Your Partner could "argue" that you are investing your money in return for a profit, and any interest payments you are having to make to enable you to put the £10,000 into the house should not also be included. This is a fair point in that he could be putting his savings into an investment elsewhere and earning interest on it from day one, but he has decided to put his money into the house, in the hope that this bears a profit.

Accordingly, normally, you wouldn't be entitled to re-claim the interest you are having to pay on the additional Mortgage payments.

You can of course discuss this with him and see if any allowance could be made in your favour, but from a neutral point of view, it would be fair for you to incur the mortgage payments yourself.

I hope this assists and answers your question.

Kind Regards

AL

Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10347
Experience: Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
Aston Lawyer and other Law Specialists are ready to help you
Customer: replied 2 years ago.

Hi many thanks for your help, how much would it cost to get a declaration on trust drawn up??


 


Regards


 


Andrea

Expert:  Aston Lawyer replied 2 years ago.

Hi Andrea,

The going rate is £250-£350 plus VAT.

There is likely also to be a Land Registry fee of £50 to register the Restriction.

Many thanks for your positive feedback.

All the Best!

AL

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