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Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10738
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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Myself and my wife intend giving our daughter £25k for a deposit

Customer Question

Myself and my wife intend giving our daughter £25k for a deposit on their 1st property, we want to protect this money in the event of a breakdow of thier relatinship and the property being sold is this easy to do?
Submitted: 3 years ago.
Category: Law
Expert:  Aston Lawyer replied 3 years ago.
Hello and thanks for using Just Answer.
My name is ***** ***** am happy to assist you with your enquiry.
I trust that your Daughter will be having a Mortgage to finance her purchase?
Kind Regards
Customer: replied 3 years ago.

she will be having a joint mortgage with her boyfriend

Expert:  Aston Lawyer replied 3 years ago.
Thanks for your reply.
It would be normal and quite easy for a Trust Deed to be drawn up, stipulating upon what events this money should be repaid to you. For your protection, a Restriction should also be registered on the Deeds, which would prevent your Daughter selling without your knowledge.
However, if your Daughter discloses on her Mortgage application form that she is receiving £25,000 deposit from you, her Mortgage Lender will insist on you signing a letter to say this sum of money is a gift, as opposed to a loan, and is not repayable. Without this, the Lender won't grant them a Mortgage.
So, in the eyes of the Lender, your kind offer has to be seen as a gift. Likewise, if your Daughter's Solicitor finds out that these monies are repayable at any stage, he will be under a duty to notify the Mortgage Lender and this is likely to scupper the Mortgage offer.
It won't therefore be possible for him to know about any such Trust Deed or proposed Land Registry Restriction, otherwise he would have to disclose this to the Lender.
The Lender MAY be prepared to proceed, provided their security is protected, and if they do, you will have to appreciate that as and when the property is sold, the Lender will be entitled to their money back first, to include any further Mortgage advance your Daughter and her partner may take out in the future.
You are therefore in a slightly tricky position in trying to protect your financial interest in the property. You could perhaps get the Trust Deed drawn up after your Daughter has completed her purchase, and through an independent Solicitor to the one she is using for her purchase.
I hope this assists you and sets out the legal position.
Kind Regards
Expert:  Aston Lawyer replied 3 years ago.
Hi John,
Can I assist you any further?
Kind Regards