Tenants in common - splitting costs of maintenance/improvements

[QueenKit]

Unmarried couple, kids and plans for life together. House bought as tenants in common 80/20 in Partner A's favour due to savings that pre-dated the relationship. Largely equal relationship in terms of working, childcare, housework, household admin etc. Both pay into a joint account in proportion to income which covers majority of household outgoings. Any other big expenditures usually split relatively equally - Partner A sometimes paying more due to slightly higher income/more savings, although both fairly financially comfortable with personal and joint savings.

Thinking about some big-ticket maintenance/improvements on the house ~£20K ish for things like windows replacement, bathroom upgrade etc. Should the costs be split equally or 80-20 as per ownership of house?

On the one hand, both partners will equally enjoy and benefit from the improvements. Idea is that both will live there long term and be together for life. Partner B has a smaller share of the house, but 'gets the benefit' of living in a more expensive house than they could otherwise afford to.

On the other hand, nothing is guaranteed and if they split and the house is sold, Partner B will only get back their 20% share. So splitting the cost of improvements equally means they are paying more than their fair share.

So how to split costs?

YABU - 50-50
YANBU - 80-20

80-20 would be the fairest I feel

80-20 keep it simple if you need to split

80-20 unless the tenants in common split is revised.

50/50 all the way. These things are quality of life issues, both partners will get the benefit, so costs should be 50/50.

Partner B will still benefit from an increase in the value of the home because of these changes.

@Cabbagepie

80-20 unless the tenants in common split is revised.

That's a point, you could always change it to 70-30 if the maths works out

So partner B is only getting 20% of the capital appreciation of the house?
Despite contributing in proportion to income for mortgage/ other running costs.

I think this needs revisited.

We have a similar situation with myself putting in more than my partner. However we agreed that we both now contribute the same to the house mortgage/renovation etc that we will take out the share that we put in to start with then 50/50 the rest. I personally wouldn’t expect myself to pay more towards major renovation if it’s something we both wanted and would benefit from

@Jillyfernilly

So partner B is only getting 20% of the capital appreciation of the house? Despite contributing in proportion to income for mortgage/ other running costs.

I think this needs revisited.

Fair point, but should have said paying proportionately towards mortgage was taken into account to come up with the 80-20 split

@Nicholethejewellery

50/50 all the way. These things are quality of life issues, both partners will get the benefit, so costs should be 50/50.

Partner B will still benefit from an increase in the value of the home because of these changes.

But partner B will only benefit from 20% of the increase in value

Anything to do with the fabric of the house should continue on that 80-20 split until / unless that split is revised.

The logic for this is that the profits and losses from any sale of the proerty will be divided that way - it would be unfair for partner B to pay 50% towards an extension and to only recieve 20% of the profits from it.

Anything insidethe house, that can be split, sold equally between the two of you, all bills etc should be 50:50 - you both live there, you both get the benefit from furnishings etc etc etc.

God what a miserable thread and so clinical considering you're in a relationship with kids.

@YoYoYoYoSup

God what a miserable thread and so clinical considering you're in a relationship with kids.

Until they are married there is no financial protection for either of them

@YoYoYoYoSup

God what a miserable thread and so clinical considering you're in a relationship with kids.

Yeah! So miserable. Alternatiely quite savvy, given how many unmarried women are left with the kids whilst the partner walks away with the assets from their partnership.

80/20 for sure.
Why should you pay £10,000 towards a £20,000 bathroom if you'd only get £4,000 back when selling? That's obviously a very basic outlook and it wouldn't actually add £20,000 worth of value but you get the concept

@YoYoYoYoSup

God what a miserable thread and so clinical considering you're in a relationship with kids.

You say miserable and clinical, I say sensible protection of assets and considered financial planning 🤷‍♀️

Damn straight. DP and I working out the terms of how we buy a house currently, esp since I am providing the deposit and have two children to support. It's just sensible to draw these things up in advance when everyone is feeling fair, then if it all goes wrong it's already sorted. Having been through a divorce classed as 'amicable' I am very keen to have these sorts of things pre-decided in case romance doesn't work out at hoped. It doesn't always, you know.

It's sensible, is what I'm saying.

Yes, this is definitely one argument. But we're planning on living in the house a long time and I'll get equal use of a nice new bathroom! The money I'll get back from our is only relevant if we split and sell, which obviously I hope we won't, but I'm a realist

I'm Partner B, in case it's not obvious. This hasn't actually come up yet but it will in the next few months so I want to think through my position in advance!

That was in reply to @girlmom21 btw

80/20. Yes partner B gets the benefit but the upgrades would be out with their budget and poor financial sense to pay 50% for a 20% return.

well thats totally impossible to answer. No ones knows if you would split up in which case you would stay 80-20, but if you stay together 50-50 is fairer as you both get the benefit.

Maybe compromise and make the split 40-60 and then pay 50% each

But we're planning on living in the house a long time and I'll get equal use of a nice new bathroom! The money I'll get back from our is only relevant if we split and sell, which obviously I hope we won't, but I'm a realist

The money your partner will get from the 80-20 split will only be relevant if you split and sell too but they've protected themselves so I think it's only fair that you do too.

The alternative is they accept you're a family now and change the split.

It is sensible but just so.... I dont know. Sounds like you just don't intend to be together long term or trust each other. I'm assuming you're the 80% partner.

Thanks all. I'm inclined to go for 80-20, but want to thoroughly test my argument to make sure it stands up!

Obviously this is a relationship where the couple have decided to keep finances separate. Therefore the fair option is:

Mortgage and expenses relating to the fabric of the house (such as home improvements and repairs) should be split in the same proportion as the ownership of the house 80:20

All living expenses (food/bills etc) should be split 50:50 to reflect the separate finances.

What would be exceptionally unfair would be for the person owning the larger portion of the house to expect the other party to share a bigger wage (and subsidise their living costs) while they kept their own bigger assets to themselves without sharing. If its the other way round and the higher earner has the bigger asset share, then it should still be 50:50. Basically combined finances is fine, separate finances is fine. Mixing the two is generally not fair - that's one partner picking and choosing the method which benefits them to the detriment of their partner.

Actually, I take that back, I've just reread the OP and realised there are kids involved, so I think that changes everything.

In that case I would say Partner A ringfences their deposit (rather than having a bigger equity share). House owned as joint tenants.

All income goes in the family pot.
All expenses paid by the family pot.
Equal spending money for each partner, and joint savings where possible.

In the event of a split, partner A gets the bigger deposit back, and the remainder of the equity in the property is split equally.