Tenants in Common... help!

[mamabird201313]

I have just sold my flat and I'm in the process of buying a house with my boyfriend. He has nothing to contribute up front so I'm wondering the best way to work out the ownership %.

I'm putting down £50k deposit, and putting £90k aside for renovations. I'm also paying stamp duty, all legal fees, estate agent fees etc.

We are borrowing £250k. We'll be paying roughly 70/30 of mortgage bills (boyfriend earns more than me) and he will be doing all the labour on the house for free (he's a builder)

We will be getting a declaration of trust written up to ensure my money is protected, but we've been sent ownership forms from solicitor today they've asked us to write down our % or ownership so just wondering if anyone can help?

Ask your solicitor - tell them everything you've said here.

That's why you pay for legal advice

We were in a similar position. Had a Declaration of Trust drawn up starting with a 65:35 split in ownership which reduced/increased respectively each year to even out at 50:50 after 15yrs.

I wouldn't buy with him. He earns more but hasn't got anything to put down?

It needs to change each year depending on what has been put into it - financially. Your OH doing the DIY and the money you put aside for reno doesn't factor. So for the first year, the Split is your deposit £50k plus 30% of the mortgage paid off, his is the 70%. As a % of the house.
Someone (lawyer!) needs to figure out how this % will change factoring in the increase in value of the house.
The document should be drawn up for the term of your mortgage but bear in mind at some point you'll come off your current rate and renegotiate.

You are spending hard cash but are leaving yourself at the mercy of his sweat equity contribution. This is a recipe for disaster. If he prioritizes money making jobs over your shared flat you will never be able to pin him down to do the work. The cobbler’s children have no shoes is proverbial for a reason.

He may sincerely plan on doing his bit through labour but life and jobs and cold hard cash may intervene. You don’t have the option of delaying mortgage payments or defaulting on bills but he will have the option of delaying the work on the flat until it is convenient or until it doesn’t conflict with paying work. Make sure to make and cost out his labour/expertise contribution so its recognized snd fixed in both your minds. He isn’t a magician with a bottomless bag of tricks. But neither are you the only one with a duty to bring this asset up to the mark.

If you are installing something (e.g. flooring, new kitchen, bathrooms ) write out a contract with him detailing the proposed scope of work, labour snd materials, etc…as well as a timeline for completion. You are putting a ton if money in up front but the asset could be worth nothing if he defaults on the planned work and you both fight and fall out. Protect your investment. Breaking up with your contractor mid oroject csn be financially devastating. If you break up with your contractor boyfriend he can withhold construction services, force the sale, and resume work for his own benefit at will.

How long have you been together. Has your mortgage been agreed in principle. Why has he got no savings at all.

I am having a sleepless night so have done some rough calculations for you. Obviously you need to fill in the correct figures as these are just estimates. I think based on this you should not give your boyfriend any share (or just a minimal percentage) until he has contributed his labour and has paid the mortgage, but the percentage share should be adjusted each year to reflect your respective contributions.

This is awesome and exactly the reason I read mumsnet. I’ve learnt so much for reading through posts. I would never have been able to work out how to calculate something like this but your explanation makes it seem so simple and clear