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Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10733
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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A good friend of mine owns a house but has a 50K endowment

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A good friend of mine owns a house but has a 50K endowment mortgage which comes to an end very soon. Unfortunately the endowment will not pay off the mortgage and he faces losing his home. I have recently inherited a substantial sum and am considering 'investing' 50K in buying a share of his property, thus allowing him to pay off the mortgage and stay in his home. He would continue to cover the cost of running the property himself while I simply owned a proportion of it as a sort of sleeping partner. I do not wish to live in the property myself, but should he die or sell the property, I would want my 50K back. Is there a sensible legal vehicle that would allow us to do this ?

Hello and thanks for using Just Answer.

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

You have 2 options really- you could either hold a percentage of the property, meaning you become a joint legal owner (which your friend may not be too content with) or

you could have a private Charge over the property, meaning that the Deeds remain in your friend's sole name, but you have security registered against the property.

If you could perhaps let me know which option sounds the best, ***** ***** then expand for you.

I look forward to hearing from you.


Customer: replied 3 years ago.

The second option, the Private Charge, sounds like the better one if it means I can help him out while he retains control of the property and I don't lose my money should he sell up or die.

Hi David,

Thanks for your reply.

I would also say the option for a private Charge would be best for both parties.

I'm afraid you will both need to appoint a Solicitor each to deal with the paperwork and register the Charge at the Land Registry. The correct procedure would be to date the Charge on the same day as you give your friend the 50K, enabling his Solicitor to pay off the Mortgage and for your Solicitor to receive the signed Charge. Your Solicitor will then register the Charge at the Land Registry.

Having a Charge, then means as and when the property is sold, whatever is outstanding under it, will need to be repaid to you. It does therefore mean that you can not demand the return of your money until the property is indeed sold.

However, depending on what you agree with your friend, the Charge can stipulate that it is repayable after X years, as well catering for extra interest to be repaid to you, so you are not out of pocket. It all depends on what you and your friend are happy with.

I hope this helps and sets out the legal position.

Please let me know if you require any further clarification.

Kind Regards


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