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

Would you not agree that you get back what you put in if you split - then any equity is split evenly ?

Therefore 50:50 for big things

80- 20

Just to add another perspective: I think you have to separate maintenance and improvements.

Maintenance (eg replacing leaky windows, replacing wonky kitchen like for like) is more about keeping the value in the asset and ensuring you live in a nice house. It doesn't increase the value, therefore the split should be closer to 50/50.

Improvements (eg an extension or significant upgrades) should be more 80/20 as they do contribute to an increase in the property value - although with kitchens / bathrooms you don't always see a full return on investment.

Yes 80:20.
I hope the 20% person has savings incase of a split and needing to buy a property.

@RoundGlass

Would you not agree that you get back what you put in if you split - then any equity is split evenly ?

Therefore 50:50 for big things

Unless that's also in writing nobody has to honour it and if you have various agreements at different points of house ownership it's going to get very messy

You would get your inital 20% back plus 50% of any remaining equity should you split and the house be sold with a tenant in common agreement wouldnt you?

@HelloCanYouHearMe

You would get your inital 20% back plus 50% of any remaining equity should you split and the house be sold with a tenant in common agreement wouldnt you?

Nope - you get whatever share the agreement is. So OP would get 20% from the sale of the property regardless of equity, improvements etc

@Bakingdiva

Just to add another perspective: I think you have to separate maintenance and improvements.

Maintenance (eg replacing leaky windows, replacing wonky kitchen like for like) is more about keeping the value in the asset and ensuring you live in a nice house. It doesn't increase the value, therefore the split should be closer to 50/50.

Improvements (eg an extension or significant upgrades) should be more 80/20 as they do contribute to an increase in the property value - although with kitchens / bathrooms you don't always see a full return on investment.

Agree with this. 50:50 for like for like repairs and maintenance. 80:20 for added value changes such as extensions.

Big ticket 'maintenance' such as replacing a knackered kitchen or bathroom could be somewhere in the middle like 65:35 or based on an income split.

@girlmom21ah, you see my agreement was initial investment plus 50% of any remaining equity once everything was settled, plus taking whatever I had purchased in terms of big ticket items.

I thought that was standard across the board with that agreement

[quote HelloCanYouHearMe]@girlmom21ah, you see my agreement was initial investment plus 50% of any remaining equity once everything was settled, plus taking whatever I had purchased in terms of big ticket items.

I thought that was standard across the board with that agreement[/quote]
I think there are still options to do it either way, thinking about it

You could split the costs 50/50 but then re-visit your 20% share in the property so it might increase to, say, 25%?

If nothing else, I'm gratified to see the voting split is (more or less) 80-20 - in my favour this time

@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.

So couple split up after 1 year Person owning 20% loses out

I own a similar proportion due to large deposit. However we earn similar. I couldn't afford to pay 80% of a kitchen though. And does a kitchen of 15k actually add 15k to a house, especially after a few years?

I would just get married!

If you want the works carried out day relatively soon does your parter have their own money set aside to do the works already? Say £20k works they are putting in £16k and you £4k.

I feel you are asking a lot of your partner that you want the works doing but not wanting to pay for it. I would personally relook at your set up. Discuss this with your partner maybe you would be better at revisiting the share in the property or at least the terms in case you break up. I posted earlier about me and my DP taking out what we put in initially and then 50/50 split for me that’s the fairest way, we both put money into the renovation and both pay 50/50 on mortgage .

@Cabbagepie

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

this

I may be ignorant so feel free to ignore.

I always thought the most logical way was to ring-fence the deposit and then anything above is 50/50 in the event of a split.... This of course only works faurly if both are earning similar and contributing 50/50 to the mortgage.

If earning capacity is 80/20 then I'd only be contributing 20% to the mortgage and any improvements.

@CombatBarbie

I may be ignorant so feel free to ignore.

I always thought the most logical way was to ring-fence the deposit and then anything above is 50/50 in the event of a split.... This of course only works faurly if both are earning similar and contributing 50/50 to the mortgage.

If earning capacity is 80/20 then I'd only be contributing 20% to the mortgage and any improvements.

The problem is that if you ring-fence the amount (say it's 150k) then in ten year's time they split up, the house has gone up by 100k, but the provider of the deposit gets 150k plus half the rise in equity, whilst the other party also gets 50% of that rise, but the original deposit hasn't received any kind of interest- accounting for inflation it has in fact decreased in value. You can maybe ring fence the percentage of the property that deposit paid for then split the remaining percentage. It's a tricky bit of maths all round