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Calculating your share in tenantc in common agreement.(16 Posts)
A quick question.
Just wondering if you should include costs associated with buying a property in calculating your share of the property in a tenants in common agreement?
Or is it just the value of the property when you bought it?
The reason why I am asking is because when you include stamp duty, legal fees, moving costs etc ... theses could be quite high.
And in the event of us splitting, I would like to get my proportion back.
I would say that you would calculate it based on a proportion you're both agreeable with. It wouldn't necessarily be fair, for example, for a SAHM or carer to automatically be denied a fair share on the grounds of not having paid for half of the house because they have had other family responsibilities which keep them from earning.
You should always include the costs of acquisition, for the reasons you state.
don't you just do it by way of percentage of the equity?
Lets say we paid equal amounts towards the house, and the tenants in common states 50/50.
But later on, we had an extension done to the house, or some kind of home improvement for which I have paid for the bulk.
If I have evidence of how much I have paid, is this sufficient for me to claw back this extra share should we ever split?
CE I wouldn't have thought so. If you have a tenancy in common then the split will be as agreed in the paperwork. I would get new percentages agreed if your input has been significant
OK, lets say it was 60/40 in one persons favour.
They have a tenants in common agreement in that ratio.
Can they stipulate in the agreement that this will not be revoked upon marriage to each other?
(ie they get back in that ratio even if they are married)
If you are intending to purchase as Tenants in Common then it is adviasble to have a Declaration of Trust Deed drawn up, documenting what proportions the equity will be split and discussing division of costs and buying out on seperation etc.
If there is no express Declaration of Trust and there should be a dispute in the future and since buying one of you has paid for an extension which has increased the value of the house then you may wish to revise the Declaration of Trust. If not and there is a dispute then an application under the Trusts of Land statute would have to be made to identify who's entitled to what share of the equity - this can be costly and slow so best avoided!
So as the OP asked, if you have declaration of trust drawn up, would that be revoked if they marry? Or can you stipulate that it will not be revoked upon marriage?
Whilst I don't have any legal knowledge, I'm in the process of trying to unravel problems with some land in trust that ripple back to things not being done properly when my grandad, dad and grandmother died...
So make sure the trust clarifies exactly what happens if somebody dies - horrible to think about I know, but pretty important and for us, it's causing lots of problems and heartache years down the line. On the other hand the solicitors seem pretty happy - which is double galling given they are the ones that screwed up in the first place and are now getting paid to unscrew
We've also had a problem that for one bit of land a beneficial interest passed down to my mum through my dad's will. Not had to do anything with it, just knew it was there and that we owned a chunk of it. Discovered recently that when the other co-owner died, they left their share to their wife and a beneficial interest was noted in the land registry documents. However when she died, it was all left to her children, no mention of the beneficial interest and they now believe it just belongs to them. Solicitors are adamant that this is impossible, that we must have signed away the beneficial interest as it's not possible to transfer land ownership/rights without both parties signing. However why would we do that - we haven't ever really discussed the land with them, there's been no need and why would my mum decide to give stuff to my cousins when she is adamant that she gave her share to us. Very strange. And pure fluke that we found out there was a problem when we did - why would you go and randomly check land registry documents for land you own when you haven't done anything with the land. You carry on living in your house - you don't suddenly discover one day that somebody else has decided to register it in their names because they felt like it.
So I guess I am saying that you need to make sure the trust document is tied up properly but also make sure that you make specific reference to it in your wills and include in them anything you want to happen to it, so that it doesn't all go pear shaped when one of you dies.
1, 20, 30 or more years down the line, it is very difficult to remember what happened precisely and who has what share of what. if there is a copy of the trust document with your wills and it's kept up to date if there are any changes made it will make things much easier for your grieving relatives!
What I am trying to ask is if you are buying as tenants in common whilst unmarried, lets say 60/40 in one persons favour, you have a declaration of trust deed drawn up and a will at the point of purchase.
Can you stipulate in the trust deed and the will that they will not be revoked upon marriage to that person, so that later if you do marry that person and divorce, they cannot go for more than the agreed share.
sorry CE I don't know how marriage affects a prior declaration of trust. I wouldn't have thought it would affect it, but am not 100% sure
If you married and then divorced, the declaration of trust could not absolutely prevent either person seeking more than their specified percentage. On divorce, the Court would have to look at all the various factors set out in s25 Matrimonial Causes Act. However, the declaration of trust would be good evidence of the contributions made by each person on pourchase and theri intentions. I would advise the couple to consider entering into a pre-nuptial agreement prior to their marriage. Whilst pre-nups are not completely binding, the Courts are giving increasingly greater weight to them these days.
Could you do a basic post-nuptial thing (you can tell I'm not a legal bod!) that says that you want the deed to stand as it was set up and not to be changed by marriage? Or re-sign the deed to say that it still remains the same after marriage?
There must be some way around it, if you talk to the solicitor who draws it up for you, it would be shocking if they couldn't a) think of how this could be done and b) if it needed something signing post-nuptially, draw it up for you at the same time as doing the main document, print it off and then you just keep it safe ready to sign and date when you get married... That way it shouldn't cost too much extra for them to do, just the cost of printing off a few more sheets of paper and tweaking a sentence or two!
Assuming not married and already have TC agreement 50.50 and then later you pay for improvements you were asking if you could get more . It may be possible but much much clearer if you at that point of the extra payments you and he or she vary your agreement. Also these days you can say at teh Land Registry what your % shares are so you could do the new deed, both sign it, moving say to 60/40 and then have that 60/40 shares registered too.
If you are married and split up then it doesn't matter if 100% is in one name the other sill may get 100% of it or 50% or whatever the court decides is fair.
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