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Co-Ownership Agreement for Couples

16/08/2017

Co-ownership of a property is an exciting time, however many couples that are taking the step while unmarried could be leaving themselves open to a costly lesson should their relationship end. The reason for this is when you are married you’ll own a property as joint tenants which means both of you own 100% of the property together. There’s no need for a Co-Ownership Agreement because as joint tenants your share means you co-own everything together and if one of you dies then your share simply goes to your partner.

For unmarried couples you predominantly own the property as tenants in common with separate shares. This is understandable as it is normally the case that one person has invested more into the property and until you are married it would make sense to keep your share separated. As tenants in common your solicitor will file a JO form at the Land registry stating each of your shares in the property so that the co-ownership of the property is secured.

So why do co-owners always need to get an agreement drawn up? Read on to find out more.

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Why should we get a Co-Ownership Agreement?

A Co-Ownership Agreement doesn’t just protect your deposit, it should also set out:

Your separate initial deposits
Your options if the relationship fails
What to do if one person wants to sell and the other doesn't
What happens if one of you stops paying your share of the mortgage
How to calculate your share of any gain in the property

It's not just about the deposit

Protecting your share of the deposit is crucial to any Co-Ownership Agreement, however your ownership share might also change up or down if, for example, you helped pay for an extension which increased the property's value or if you paid more of the mortgage repayment contributions. Deciding how much you are due from the sale of the property should also take into consideration how much you have contributed towards:

1 The original deposit;
2 Mortgage repayments; and
3 Developments to the property.

Different contributions = Different Shares in the Property

If it was your intention to co-own the property, then you should co-own any gain, however it rarely is a 50:50 split. In fact most couples share their contributions differently and often one person earns more than the other.

Where you both contribute in different amounts you need to make sure you have a legal agreement drawn up ideally before you buy the property stating who owns what and what happens if that changes.

Need a Co-Ownership Agreement?

We provide a comprehensive legal agreement for couples looking to buy a home together. The agreement is drafted by you at the outset when you are both happy with your relationship. The legal agreement is registered at the Land Registry on completion of the purchase so that, when you come round to selling, this agreement will be used to calculate your share of the property.