Changing social trends, high property prices and the scarcity of mortgage funding means the range of people buying properties together has changed quite dramatically in recent years. In addition to unmarried couples, parents and children, groups of friends and even individuals who have only been connected by a property purchasing website are grouping together in order to get themselves onto the housing ladder. In many cases these arrangements work perfectly well, providing an opportunity to purchase a home that would not otherwise be available. Unfortunately, however, people do fall out. When this happens there can often be disputes about how the property is owned. For example, if one party has contributed more to the cost of the property than others they may feel aggrieved by a suggestion that the proceeds of sale should be divided equally. This can often present a challenge to the law, sometimes requiring a Judge to make detailed enquiries as to how the property has been funded and what the intentions of the parties were at the time that the property was bought – no easy task when the property may have been owned for a number of years. Such disputes can be extremely distressing, time-consuming and very expensive!
If you are considering buying a property with others it is far better to deal with these potential problems before the purchase is completed. The documents relating to the purchase can then record what has been agreed, leaving little room for argument if things go wrong. Repeatedly lawyers are told “We never thought that this would happen to us!” Or “It was always understood…” A little forethought helps to avoid these problems. For some more information about how property may be held by joint owners click here
Of course, in close relationships, it is sometimes difficult to contemplate things going wrong. However, making appropriate arrangements at the start of the transaction can avoid a disastrous dispute later.
Our Conveyancing Team are very happy to provide further advice to individuals contemplating a joint purchase. One difficulty that they sometimes experience is with clients who have given no thought to the topic before meeting with them and who are then inclined to give hurried instructions, sometimes, quite understandably, not wanting to be seen to “rock the boat” in any way. In every case, therefore, we suggest that individuals who are considering a joint property purchase give detailed consideration to how the property is to be owned and what is to happen to any proceeds upon its sale, whatever the circumstances. We also suggest that the parties have a full and frank discussion with their fellow joint owners. That way everyone knows where they stand, the documentation can be drawn up to accurately reflect what is agreed and the risk of a dispute in the future can be significantly reduced.