With fluctuating house prices over recent years and people struggling to get on the property ladder, there is an increase in the number of properties being purchased jointly by friends, family members and unmarried partners. With the significant rises in house prices over the last couple of years, there is an increase in the number of properties being purchased jointly by friends, family members and unmarried partners. Where a property is purchased/held in joint names other than as beneficial joint tenants (in which case on the death of one co-owner the property passes automatically to the other) and particularly where the parties have made unequal contributions to the purchase of such property, a trust deed is useful to set out each party’s respective interest in the equity in (or the potential sale proceeds of) the property and each party’s rights and responsibilities in respect of it, including the right to force a sale or buy out the other’s interest.

The deed can and perhaps should also deal with the effect of later capital contributions to the property by one joint owner by way of the reduction of any mortgage secured over the property or the funding of major repairs or works of extension or renovation of the property as the party investing such capital may wish their share of the equity to be adjusted appropriately.

Further, there may be an issue where one co-owner fails to pay his or her share of the mortgage repayments and the other therefore has to step in to fund the full cost. Also, one may be making larger non-monetary contributions towards the household than the other.

Legal advice on these issues is always, in our view, essential when parties are intending to purchase a property (whether as a home or otherwise) jointly.

Please note that where a couple have married or registered as civil partners following the execution of a trust deed dealing with their ownership of a property and subsequently separate, the terms of the deed will not be binding on the Courts which will of course take into account such terms but are not bound to uphold or enforce the agreements previously entered into.