My friend's new DP wants her to sign away any future claim on their flat

[Flingmoo]

My friend has been with her new partner (first real partner actually) for about 6 months and they are going to move in together. They're currently both renting and he wants to buy a flat in only his name but have her paying 50/50 towards bills/mortgage payments. He's owned a house before but rents now.

Because he's been stung before by a girlfriend taking half the property when they split up, he wants her to sign some kind of "pre nup" style agreement that she will not be entitled to any share of the flat if they split. She was 100% happy to do this until her parents criticised that plan and has now asked me for advice on it (me being married with mortgage and a baby, she assumes I'm some sort of wise sage on relationship issues...!)

In her view, she's always rented anyway, so she doesn't feel she's any worse off by entering into this sort of agreement, to her its no different from renting, where you obviously don't have any property at the end of it.

People of mumsnet, what are your views on this...? Personally I think she should at least be entitled to whatever amount she'll have paid into the property in the event that they split up. Otherwise, if they did ever split up, it'd seem as if he's used her as a lodger to help pay his mortgage!

If he is to provide the deposit and then they split the mortgage repayments equally, then she should own half the value of the property, less the amount of the initial deposit. Or some kind of fancy calculation to take into account increase in value - either way, fair enough for him to protect his deposit amount, but not to expect her to pay half the mortgage without any share of the property ownership at all.

If he loved her, and they were in a committed relationship and he wanted to live with her, he would not even consider how to make money of her and ensure she was left with nothing if they were to split! He would not mind at all that he pays the mortgage for his property while they split the bills.

FWIW given that she has only known him for 6 months and he is her first proper boyfriend (it seems) she should not move in with him, IMO.

I'm about to do this with my partner of a year. I am studying on a full time course that requires me to go away on placement for 6 months of the year (with accommodation thrown in). He is working and at a point in his life where he wants to get somewhere

I would be paying a fortune in rent anyway for a grotty student flat, so I might as well pay less rent than I would for that and help him out too. I don't want the commitment of a house and he is paying for all the furniture, decor etc. The money would be paid on rent anyway. Win-win.

When my friend and her boyfriend moved in together and bought a property, they did like OneDay said. She provided the deposit, they paid 50/50 mortgage, and when they split she got her deposit back and they shared the value increase of the property.

Would be different I suppose if the property lost in value....

I rent and I pay more than my LLs mortgage and I cover all the bills! Should I refuse to pay rent?

Is she willing to buy a house with him, pay for half the deposit, or have his deposit legally protected, and also pay for half the upkeep and potential loss if house prices go down? Also, if she cannot contribute to the deposit should she benefit from 50% of any house price rise that she could not have enjoyed if it were not for his deposit?

As long as she is paying a fair market rent for what she is receiving and not contributing to upkeep then that is fair when they are an unmarried couple with no children. Given today's astronomical rents and low interest a market rent may be more than half the mortgage payments though.

Simple solicitor job. Very common now to ring fence a deposit if one person is providing it. The rest is divided.

Well I'm certainly glad I asked MN - this all backs up my initial feeling that it doesn't seem fair or ideal... I just have no idea how to express these doubts to her without it hurting her feelings or our friendship. We've been friends for 14 years!

She is smitten with him and although she did specifically ask for my advice, the truth hurts doesn't it... :(

Gary, your contract with your landlord is a business one, and a different matter to sharing property in a relationship. The OP's friend should be protecting her own interests, not funding her boyfriend's at the expense of her own.

Mamushka - you could always just show her the thread!

Wrt increase in value - say the deposit is 20% of the value of the house, the deposit provider could be entitled to 20% of any increase in value and the remainder of the increase split equally.

Good friends should be totally honest.... It may be hard to hear your thoughts, and she will choose to do with your advice what she wishes, but it's important to be honest so she can consider her options and his motivations...

If they do decide to live together... (does sound soon, particularly given that her dp seems to be thinking about it all ending) I'd say they should be doing it as tenants in common, signing an agreement beforehand as to what happens to the money if they are to sell up in the future - eg if deposit is 10% and his then he gets 10% of the selling price and the remaining 90% is split between them 50:50. Also need to include what happens should the worst happen and one of them die (not so nice to think about but important to be clear about beforehand). And maybe more likely - what would happen if your friend got pregnant with his child(ren) - she wouldn't necessarily keep her same level of income whilst pg or on maternity leave, so would she still be expected to put the same amount into the property and bills? Would she forfeit a percentage if she didn't put the same amount in as him (despite the fact she is carrying their child and he can't do this etc etc so the impact is on her rather than him)? What happens if one of them becomes unemployed? Or has to move for their job? Or they want to split up - can one of them buy th other out? If so, who gets it if they both want it? And I'm sure there are probably plenty of other things that need to be covered too, including what happens if the value goes down instead of up...

Is there any way that your friend could find some money to put something in as part of the deposit - even if a small amount so that they are both putting something in? What she really really needs to watch out for is him putting the deposit in and watching his investment (hopefully) increase in value while she ends up spending her money on furniture, carpet, paint etc - all of which is going to be a depreciating asset and for much of it - it's not going to be things that she can take with her should they split.

Just out of interest - what's the difference between the rent/bills she would pay on this property vs the amount she will be paying in mortgage/bills? is one of them noticeably higher than the other? And yes yes to finding out the exact details of how he was stung before - and was he really stung or did he just not get the full uplift in the property's value as the gf got some too?

Regardless of whether the rent is more or less - it sounds like he is thinking that this is his home that he is buying, not their home, and thus he sees that he is the rightful one to get all the increase in value even though your friend is contributing significantly towards the costs. Why shouldn't she get anything for that - if her dp isn't prepared to share the rewards equally relatively to the money that they both contribute to it then he doesn't sound like he is a great life partner, but is someone who is always going to be selfish.

He might have been stung before by a girlfriend - but given that you're not advising your friend to sting him, just to share the profits (or losses!) proportionally to the amount they contribute in deposit and mortgage terms, then it's hard to see how he thinks he is being hard done by without thinking that he is only out for himself and should be dropped like a hot potato!

"Oneday" that argument can be turned around. If she cannot afford a deposit toward a property then why should she benefit from an increase in property value? She could not afford to own so why should she benefit from the asset increase? Why should her BF be willing to put her into a better position. Why should she be expecting to live rent free as she won't gain from her payment like all renters. If it is his house would you expect her to shoulder the losses?

If they aren't married I didn't think she would have a claim on the property. However, would he not have to declare her rent as earnings as it would be taxable.

Just taking the bait for a minute....

-If she cannot afford a deposit toward a property then why should she benefit from an increase in property value?
She'd be paying half the mortgage therefore owning that proportion of the property bought with her contribution, and therefore the corresponding increase in value of that proportion

-She could not afford to own so why should she benefit from the asset increase?
She would/should own the proportion of the property paid for by her half of the mortgage contribution, therefore would own a proportion of the asset.

-Why should her BF be willing to put her into a better position.
Why should she put him into a better position?

-Why should she be expecting to live rent free as she won't gain from her payment like all renters.
I wouldn't say she'd be expecting to live rent free - he wants her to live with him in his property. It's his invitation, not her expectation.

• If it is his house would you expect her to shoulder the losses?

If it's his house, then no?

It's about both parties treating each other fairly and equally, not one expecting anything from the other that the other isn't freely offering. Basis of an equal relationship. Personally I wouldn't think it was fair for me to fund my boyfriend's house purchase.

OP hope you find a way to talk to your friend about the issues you're concerned about.

I can see both sides in a way, I understand his wanting to protect his investment. But my overriding feeling is why should she finance his purchase, even if she does get 'use' of it (i.e. lives in the flat). If things go south, she will be left with nothing whilst he will have the benefit of a higher equity on the property than his actual investment deserves. Would he be able to afford this property without her contribution?

I disagree with a rental contract agreement. If this relationship lasts a long time and children become involved, she'd again end up with nothing. As her 'landlord', he'd be able to evict her. Without a rental agreement, she may have some recourse in a long term relationship if there are children involved and the relationship breaks down.

My feeling is he should pay the entire mortgage out of his own funds since he will retain the benefits of property ownership. I think she should pay something, perhaps 3/4 of the utilities & 1/2 the other HH expenses to offset his mortgage expenses. I feel he should pay more as he is the only on truly benefitting from the 'arrangement'.

Frankly, I wouldn't sign anything.

If the genders were reversed, everyone would be calling cocklodger.

I think it's fair for her to pay 50% of bills and the going rate for rent of her share. It's not fair for her to live for free so of course she should contribute but she in my opinion shouldn't be getting a share in the equity, as she would not have been in a position to buy on her own and is completely riding the BFs coat tails.

They are not serious yet if it's only been 6 months. Things may be different a few years down the line if they marry or have kids, or the gf saves a chunk of money which she could contribute into the house.

I am in a similar sort of situation as the boyfriend in the OP where I can afford to buy a property on my own, have my own deposit and am perfectly capable of servicing the mortgage on my own. Partner has no money. I would be so uncomfortable with the idea of him latching onto my asset which I have worked very hard for. I did discuss this situation on MN and got resounding response to beware!

The property, complete with deeds and mortgage, is in his name. That's fine. Depending on his mortgage provider, and with due regard to tax implications, he may be able to regard his dp as a lodger, but certain conditions apply, and I doubt whether he/she has given a moment's thought to that.

As it stands, if she pays 50% of the mortgage, as well as 50% of bills, food etc, she gains an "interest" in the property whether he likes it or not.
Similarly, if she pays nothing to the mortgage but does pay for "improvements" (eg extension, new kitchen/bathroom), she gains an "interest" in the property, and will be entitled to a share (to be thrashed out between them/in court) of the increase in value.

The really big problem is if she pays nothing towards the mortgage, and gives up her job to be sahp to their joint dc. That's when people are really vulnerable. And that's when people (usually women) can be royally shafted.

"She'd pay it as rent somewhere else" - yes, but she would have the place to herself, it would be "hers" for the period of the lease. She'd be entitled to certain rights and protections thanks to the lease, including not being kicked out on her arse when she breaks up with her boyfriend. It would be "her" space.

If she signed a lease she would have rights etc but it'd hardly be ideal - if they broke up she still wouldn't want to stay there and be in the same position as if she didn't have one (and she is unlikely to challenge him on anything).

If she doesn't pay part of the mortgage, would he be able to afford it? If not, it's only because of her that he'd be able to afford it so he's getting an asset out of her money/their relationship. If he could afford it without her and her moving in is to benefit her (lower rent, half the bills etc) then that's all well and good.

What I would do is sign a document stating:

• an expiration date/invalidation clause: so if they're still together say 2 years from now, or if they marry (whichever comes first) she obtains interest in the equity, excluding deposit of course, and also if they marry;
• his deposit is ring-fenced;
• she doesn't pay any of the "home owner" expenses during the documents time period, anything a tenant would not pay;
• her "rent" amount.

I wouldn't have my name on any of the utilities, and I wouldn't pay for any improvements on the home while the document is in effect (as she doesn't benefit from it). Any major purchases I would keep receipts/proof of purchase so he couldn't claim it was his (in the event it's a bad split).

After they've decided to commit to each other it doesn't make sense to have "his house" like this, it should be "their house". It's the only way for it to be fair to both parties.

If they marry, and live in it as a married couple, it becomes a marital home, regardless of it having been his when they met (at least under Scots law). This happened to a friend; his parents had helped him buy a flat, and they lived there together briefly as a married couple. They split up soon after, and she agreed to give up her rights, but she didn't have to. (She agreed because she's a good person, the flat was empty, and costing his good-people parents every month, as they were guarantors...)

Sounds like the OP's pal needs legal advice before she moves in, perhaps from Shelter?

No way would I let a boyfriend of 6 months add himself to the title deeds of a property I was buying and paying the deposit for. Nor would I let him live there for free. I would probably expect him to sign an agreement refuting any claims to it. Its quite possible that paying half the mortgage costs is not exactly how it was described and that that figure is less than rent in the area anyway.

She can always decide not to live with him and rent her own place. No-one is forcing her. I can't see why so many people think she is justified in financially benefitting from property ownership should a short relationship break up when she isn't doing any of the stuff you have to do to buy a property.

Life just doesn't work that way - people don't just provide you with free half shares in houses that you would have had no ability to buy yourself, after knowing them for only 6 months. Not in the real world anyway...

A fair agreement would be to contribute equally to deposit, and mortgage and bills, and have equal share in the property. Or the percentage share of the property the deposit provides cane be added to his half of any remaining equity, if and when they sell up and the mortgage is paid.

Alternatively they rent somewhere as a couple, as both currently are doing.

In neither case is he losing out. He gets cheaper bills and a nicer property than he could otherwise afford, and he benefits from capital gains and shrinking living expenses as the mortgage is paid off. He's just not profiting at her expense. And that's as it should be.

He has a colossal nerve wanting her to fund his purchase of a property. And if he is starting off cohabiting by suggesting financial abuse, I can't see he'd get better once his feet were under the table, quite frankly.

As for "stung by an ex getting half" - under English law, you are only entitled to a share of a property if you've paid money towards it. So he wasn't stung at all. He had to allow someone who had presumably paid a half share of everything her rights, despite having fondly believed it being in his name only meant he could screw her over. If the ex hadn't paid towards their shared home then she couldn't have got a share.

Life just doesn't work that way - people don't just provide you with free half shares in houses that you would have had no ability to buy yourself, after knowing them for only 6 months.

I absolutely agree. Yet that's what he is asking her to do.

Without a rental agreement, she may have some recourse in a long term relationship if there are children involved and the relationship breaks down.

Both children and length of relationship are currently meaningless if unmarried. Only monetary contributions count. Conversely if a partner can prove half mortgage payments the assumption will be she's entitled to some share in the property, whatever the deeds say, and at that point how long she'd been paying would factor in.

Chelsy, they have been together for 6 months, and she isn't expecting to be added to the title deeds. Presumably, he got the mortgage based on his own earnings, so can afford it without her contributions.

So it's a bit much that he expects her to pay 50% of his mortgage, plus 50% of bills, food etc, and yet expect her to sign a document (probably with no legal substance) that says she can never have any "interest" in the value of the property. Any such document would carry no legal weight anyway, it's like a landlord demanding access to a rented property with 24 hrs notice, completely unenforceable.