This is not a happy topic to write about, but one that is reality.
If you or someone you know has recently divorced or are going through the separation process (and you own property) then you are going to have to determine how to administer or divide your shared property investments, which more often than not will involve lawyers.
We understand that this process can be overwhelming and stressful.
During these times it is also important to note (from previous experience) that for any changes to occur to rental payment bank account details we must have written and signed instructions from all parties, which is part of our standard agency process.
If you are reading this article and you are the two who are still married, or if you are considering getting married we would encourage you to seek legal advice on a co-purchase or ownership agreement when buying a property with a partner as it can serve to protect both parties. It outlines who pays the bills, who is liable in the event of a relationship breakdown, and how one of the parties can sell their share of the property (if you even want that to be a possibility).
If you invest hundreds of thousands of dollars on a home, even millions, you may want to make sure that you are protected no matter what. You don’t want to find out that you don’t have any claim to the property after the relationship has broken down and then lose all of the money you put into the investment.
When you decide to purchase property with someone else, be it a significant other, family member or a group of friends, you have the choice between a ‘Joint Tenancy’ or a ‘Tenancy in Common’. In a Joint Tenancy, each investor in the property has equal shares and equal responsibilities, regardless of how much they put towards the home deposit or how much they pay off the mortgage.
In the event of a separation that requires you to sell your investment, both parties receive an equal share of the profits (or are liable for an equal share of the losses). If you are married, this might be the best choice based on your shared finances.
If you have purchased a property through a Tenancy in Common, you may have uneven shares in the home. If you paid 70% of the deposit, you will be paying for 70% of the mortgage and the bills, and you will receive 70% of the profits. Your partner, on the other hand, will only receive 30% of the profits.
If you need to sell or if you find yourself in this situation, our team of experts are here to offer confidential value-added advice on the sale process as well as a free ‘no obligation’ appraisal (if required) to assist in listing the property for sale to achieve the best possible price.
We also recommend that you seek professional advice from your lawyer and accountant.