Question: I am approaching 30 and have a good job, though I have spent all my earnings on rent and having a good time. My flatmate has suggested that instead of looking for another flat to rent, we get a joint mortgage and buy together. He has been saving and has a decent deposit, while I have no deposit but earn more than him. Can you give us an idea of what safeguards to put in place please?
Answer: joint tenancy is where each of you owns the whole of the property and when one joint owner dies the deceased's share passes automatically to the survivor, who then owns the entire property.
Tenancy in common is where each joint owner possesses a separate and distinct share of the property. When one dies, his share can be left to anyone via his will. If no will has been made, the share passes to his next of kin. So clearly, it would be prudent for you each to make your will. Instruct your solicitor to draft a declaration of trust confirming matters such as how the property is to be held — for example, a 50/50 or 60/40 split; responsibility for payment of the mortgage, insurance and general outgoings; when the property will be sold; any option to buy the other's share before selling the property on the open market, and any division of the deposit if you sell.
If your flatmate provides the deposit, consider treating half of it as a loan to you, in which case a separate loan agreement could be drawn up. You will both be jointly liable for the whole of the mortgage, not just half each.
Register a restriction against the register of title, showing that you own the property as tenants in common, and you should both seek independent legal advice to ensure your interests are protected.
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