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Thomas
Thomas, Solicitor
Category: Family Law
Satisfied Customers: 7676
Experience:  UK solicitor
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My son and his girlfriend are hoping to buy a house, but

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My son and his girlfriend are hoping to buy a house, but only my son is providing the deposit for a house. Is there any way of protecting his investment should the relationship fail? Someone suggested pre-nup, but how would that work? I don't think it is an option to put the mortgage in only his name.

Hi

Thanks for your question. I will try to help.

If he is putting in more money than his girlfriend to finance the purchase of the property then they should opt to hold their interests in the property as tenants in common. This means that their respective interests pass according to their wills (i.e. not automatically passing to the surviving owner) and that they can own unequal shares in the property.

They can then make a declaration of trust, which is a deed sworn by both of them in which they specify how the proceeds of sale of the property (i.e. when it is eventually sold) are to be divided. This could take account of your son’s deposit by either specifying that you should receive this amount first and dividing the remaining equity equally (or as a percentage proportion) or it could simply state that he receives x% and your son’s girlfriend receives y%.

In order for the declaration to be as binding as it could possibly be they should both take legal advice on it before executing.

However, please note that the courts have a wide discretion to overrule such declaration in the event that they marry and then divorce, or if they have a child and then separate. In the case of proposed marriage they should certainly execute a pre-nup before they actually marry, but for time being it is not really appropriate given that marriage is not pending and therefore a declaration of trust would be more appropriate in the circumstances.

My goal is to provide you with a good service. If you feel you have received anything less, please reply back. Please remember to leave positive feedback using the stars at the top of the page.

Kind regards,

Tom

Customer: replied 1 month ago.
Is a declaration of trust legally binding when the time eventually comes to sell the property?
If all is well and in a period of time they want to disregard the declaration of trust, is it possible to do so?

Hi,

As mentioned, it can be overridden if they have a child then separate or if they marry. However, if this doesn't happen and they both take legal advice before executing the declaration and comply with it's terms (ie. it can state they should be equally responsible for the costs of the house (ie. mortgage/bills etc) then it is fairly secure.

They can disregard the declaration in due course by making a further declaration.

Please remember to leave feedback.

Tom

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Customer: replied 1 month ago.
Thank you so much Thomas. This helps tremendously. I think that is all they need to know. Kind regards.

No problem.

Please remember to leave feedback using the stars at the top of the page.