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You’re on the property ladder… great, but what if things go wrong?

November 10, 2015

It’s no secret that these days it’s extremely difficult for first time buyers to get on the property ladder. The truth is, you either need to save for years whilst living with family or friends, or rely on some form of financial income, such as inheritance money or borrowing from a family member to get on that ladder.

Once you’re on that property ladder things may well be fine, but it’s worth considering: ‘what if things go wrong?’ even before you put your foot on the first rung. Things do of course go wrong, such as a relationship break down and you want to sell your property, or conversely, what if you loaned money to the owner, signed a declaration of trust in relation to the property, and now you want to be repaid? The list is endless, but there are options available, such as:

  1. You buy the other owners share of the property
  2. The other owner buys your share of the property
  3. You sell the property and each take what is rightfully yours

To add complexity, do you know how your investment would be divided if you both own part of the property but you unevenly contributed towards the deposit, mortgage, bills and/or maintenance? You need to seek advice.

There have been, and still are, many cases where one party sells their house to move in with their partner. They then contributed to the bills/maintenance of that property, but their partner didn’t add them on the title on the property. Remember, just because you are living with someone does not mean you automatically have an interest in their property. In cases such as this, if an agreement cannot be reached between you, you can apply to the court for an order for sale whilst seeking a declaration as to how the shares should be apportioned. The court will be bound if there is a validly executed declaration of trust or deed defining the shares of the property. The court will also consider whether there was some meeting of minds as to the existence of a beneficial interest and whether you have shifted your position in reliance upon that ‘agreement’. Alternatively, if there is no written or implied agreement, the courts will consider payments and contributions you have made to the property and the court can infer an agreement.

Truth is, when a relationship breaks down, or unforeseen issues arise, property ownership can become a very divisive issue and one that stirs emotion, not least because it is likely to be the biggest single investment most people make in their lifetime.

Commenting, Lucy Skilton, solicitor at stevensdrake said: “The team here at stevensdrake will attempt to deal with any dispute that has arisen in an amicable way with the other party. If the other party is not willing to co-operate or sell the property, then a claim can be issued to the Court for an order for sale of the property and/or a declaration. We can recommend expert surveyors to value the property and look at what you can expect to receive if the court makes an order for sale”.

If you are thinking of selling your property and would like to discuss your options then contact us.

This article is provided for general information only. Please do not make any decision on the basis of this article alone without taking specific advice from us. stevensdrake will only be responsible for the advice we give which is specific to you.

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