Q: I’ve got some money in savings that I want to use to help my son buy his first home. The house he wishes to purchase is valued at £180,000 and he has an agreed mortgage of £140,000. It’s my intention to gift him the remaining £40,000 as a deposit.
My son’s girlfriend will live in the property with him, but I’m concerned about what would happen to the house if he split up with his partner. Will his girlfriend be entitled to half of the equity in the property if they ever separated, so £20,000 of the gift to my son?
A: On the breakdown of a cohabiting couple’s relationship the approach adopted by the court is different to that during the breakdown of a marriage.
If your son is the legal owner of his home and his girlfriend seeks to make a claim against the property, then she would have no right to the equity in the house generated from a sale of the property.
Interest in the property
However, the court would investigate whether she has established an interest in the property because of contributions she may have made to the purchase price, the mortgage repayments, or repairs and improvements made to the home. If it is found that these contributions have been made, then the court may recognise that she has an interest in the property.
The court has to consider the intentions of the parties, including what they’ve discussed or led the other to believe by their conduct. If your son makes it clear that the property is his, and there is no talk of the house being a joint asset, then this should go some way to demonstrate his intentions to solely own the property.
To protect your son’s interest, it would be advisable to have a cohabitation agreement drawn up and signed by both your son and his girlfriend.
A cohabitation agreement, also known as a living together agreement, records the arrangements reached between people who have agreed to live together. It records each party’s rights and responsibilities in relation to the property they live in together, the financial arrangements between them and the arrangements to be made if they decide that they no longer want to live together.
Cohabitation agreements could avoid costly disputes should the relationship break down, as they offer protection for cohabiting couples by clearly setting out the intentions in relation to the property.
For additional information on cohabitation agreements or for advice on any family law matter, contact Janine Hutson on 01772 258321.