January 23, 2025 • 16 mins
Moving in with someone is an exciting milestone, but it’s also a big decision that requires careful planning. In this episode our host Kia Commodore sits down with family lawyer Yasmin Khan-Gunns to uncover what you should consider before taking the plunge - whether you’re renting or buying with a partner, friend or family member.
From financial considerations and tenancy agreements to the importance of cohabitation agreements, Yasmin shares expert advice on how to navigate potential challenges and protect yourself if things don’t go as planned. She also gives practical tips for managing shared expenses, understanding property ownership and dealing with breakups or separations.
Whether you're blissfully in love, teaming up with roommates, or just starting to think about your living arrangements, this episode is packed with insights to help you make informed decisions.
You can play the podcast and find other useful content on Legal & General’s website:
www.legalandgeneral.com/podcasts/a-little-bit-richer
You can find Yasmin on Instagram @londonfamilysolicitor
Kia and her guests share their own personal thoughts and opinions in this podcast. These might be different from Legal & General’s take on things. They give information for a UK audience that’s relevant at the time of recording.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Kia (00:01):
Hey, this is Kia. Welcome to another episode of A
Little Bit Richer, brought to you by my friends at
Legal & General. Moving in with someone is a big decision.
Whether you are renting or buying, there's a lot of
things to think about. So today I'm joined by award-
winning family lawyer Yasmin Khan- Gunns. Yasmin's clients range from
successful business professionals, celebrities, and stay- at- home mothers to expats, couples moving
(00:24):
in together, and couples getting married. Yasmin is also the
woman behind the Instagram @ londonfamilysolicitor and shares guidance on some
of the tricky issues that lawyers can help with. She's
here today to talk us through what you should be
thinking about before moving in with someone, and ways you
can avoid getting into a sticky situation if the relationship
breaks down. Welcome, Yasmin.
Yasmin Khan-Gunns (00:46):
Thank you. Great to be here.
Kia (00:48):
So we are talking about moving in together, people moving
in, whether it's friends, family, or partners moving in. And
it is a lovely time, it's a great time and
people are happy and it's something that we should celebrate.
Yasmin Khan-Gunns (01:01):
Yeah.
Kia (01:01):
But there are things that we need to consider before
moving in.
Yasmin Khan-Gunns (01:05):
Put it this way. You take out car insurance. You
take out life insurance. You take out house insurance. All
these things are important in case the worst happens. So
it's always good to be aware now before you begin
cohabiting, before you buy with someone, what could happen in
the future. See it as your insurance. This knowledge is
your insurance.
Kia (01:22):
I love this. So to start us off, if someone's
planning on renting with someone, what should they be thinking
about before moving in?
Yasmin Khan-Gunns (01:31):
First and foremost, I think they need to be thinking
about affordability, because you want to make sure that the
person that you are moving in with can afford their
payments towards the rent and can afford their payments towards
the outgoings. And that's particularly important if you're going to
be sharing, for example, bank accounts with them, because their
poor credit history could affect you. So that's the first
thing I'd think about. Second thing is tenancy agreement. Make
(01:54):
sure you read your tenancy agreement carefully. And also decide
whose name's it going to be in. Is it going
to be in one person's sole name or is it
going to be in multiple people's names? So really have
those discussions first and foremost, because that affects your rights
and responsibilities under the tenancy agreement. Third thing is think
about the deposit. Who is going to pay for the
deposit? Where's it going to be held? And what should
(02:15):
happen to the deposit in the event that the tenancy
comes to an end or if one person just wants
to leave the tenancy agreement early? And finally, I think
importantly, is how you're going to split the costs. Talk
about who's going to pay the rent, in what proportions
you're going to pay the rent, who's going to pay
the utilities, the council tax. So really, it's important to
(02:36):
have those conversations at the outset, open, honest communications, and
ideally have it written down somewhere, WhatsApp, email, written agreement, anywhere.
Kia (02:45):
I know that a lot of people listening have probably
moved in with someone at some point and has not
had these conversations, but it makes a lot of sense.
But let's talk about after you've moved in, what are
some of the things that you should consider to make
sure that you're a little bit more protected? For example,
what can you put into place to make sure that
if there are any issues that arise, that are dealt
(03:05):
with fairly?
Yasmin Khan-Gunns (03:07):
I'd start with household budgeting. Who is going to pay
for the things that are every day? For example, the food
shop, the cleaning supplies, and the communal items. You want
to be thinking about having an emergency fund. Maybe you
are contributing into a pot every month, maybe 20, 30 pounds,
so that in the event that something breaks, such as
a TV, who's going to pay for that? Then you
(03:28):
should really be thinking about what happens if one of
you, if you're renting with siblings or with friends, one
of you gets a new partner and that girlfriend and
boyfriend starts coming around more and more often. One day,
two nights a week, three nights a week, and then
eventually they're pretty much living with you. How's everyone going
to feel about that, and should that new partner be
contributing in any way? And I think finally, thinking about
(03:49):
exit strategies. What's going to happen if one person wants
to leave the tenancy early? What happens to their share
of, say, the council tax from the part they were
living there or they moved out. And should they get
their deposit back? Or should they get it back now,
later, or forfeit their deposit, and what's going to happen?
So there's some key things to think about. And I
think what really could help in the situation is if
(04:11):
the people entering into the tenancy agreement consider having a
cohabitation agreement. And that's a document that can set out
the answers to all of these questions, essentially, making it
really clear what should happen during the tenancy and in
the event that tenancy ends.
Kia (04:25):
So a cohabitation agreement, you said it sets out what
that would look like, but does it need to be
formal? Do you need to go to a lawyer to
do that? Can you have one written out yourself? Can
you find a template online? What's the best way to
go about actually setting that up?
Yasmin Khan-Gunns (04:39):
So just to clarify, a cohabitation agreement is an agreement
between two people setting out the financial and practical arrangements
during cohabitation and in the event that that cohabitation ends.
So that can include... And I'll go back to your
question in a second, but that can include things like,
well, if you're buying a property with someone or if
you're renting, how the rental payments will be dealt with,
how the mortgage will be dealt with, what should happen
(05:01):
to the sofa, the TV, the white goods? What should
happen in the event of a sale or the tenancy
coming to an end? It can include so many things,
including pets. Usually you would go to a family lawyer to draft
the cohabitation agreement. And the cost, it really depends. It
depends on the hourly rate of the family solicitor, but
it could be anywhere between 1,500 to 5, 000 upwards plus VAT,
(05:25):
depends how simple or complex it is. But it's a
really, really useful tool to have because it makes everything
clear and it makes a separation process, if it gets
to that, much easier.
Kia (05:35):
Definitely something to consider. So we've spoken a lot about
renting then. If you're planning on buying with someone, is
there anything else that you should specifically be thinking about
before you move in?
Yasmin Khan-Gunns (05:48):
You need to really think about how the property is
going to be held. Is it going to be held in
one person's sole name or is it going to be
held in joint names? You can hold the property in
two ways in joint names. To make it really simple,
you can hold it as tenants in common or joint
tenants. Now, joint tenants is where you hold the property
50-50, unless you have an agreement called a declaration of
(06:09):
trust stating otherwise. And a tenants in commons is where
you could hold the property in specified shares. So for
example, X has 60%, Y has 40%. Or you can
also hold it as 50-50. It's slightly complicated, but you
can have it as 50-50 or you can have it as specified
shares. Now the difference between joint tenants and tenants in
common, and that's quite an important difference, is with joint
(06:30):
tenants, if you sadly pass away, your share of the
property automatically goes to the other co- owner. Whereas tenants
in common, if you pass away, your share does not
automatically go to the other owner, it goes and passes
under whoever you've put in your will. Your parents, for
example, or your siblings. That's the first thing you should
consider, how you're holding the property. Secondly, how's the deposit
(06:50):
going to be funded? Is one person paying the deposit? Are
they both paying the deposit? And if they're both paying,
equal contributions, not equal. If it's not equal, do you
want some sort of an agreement to say that you
get that money back if the property is sold, or are
you happy for it just to be 50-50 and you kind of
forfeit the bigger amount? So think about your deposit. You
(07:11):
need to think about how the mortgage is going to
be paid. Sometimes when one person is earning a greater
income, they may contribute a bit more towards mortgage. And
alongside that, how the utilities are going to be dealt
with. You also need to think about what happens if
one of you loses their job or there's an illness.
Will one person take over the mortgage payments and utilities
(07:32):
or not? To have these discussions really, really early on.
And then you should be thinking about property maintenance, repairs.
Are you going to have a fund to deal with
that? You don't have the surplus income, it's a bit
tricky. So, something to think about. And then what happens
in the event that one person wants to sell and
the other person doesn't? It happens. How would you calculate
(07:55):
the buyout if one person was going to buy out
the other? Lots to think about. And again, a cohabitation
agreement can really, really help here, setting all these answers
out in a clear agreement to make it super simple
for everyone.
Kia (08:07):
There was a phrase that you mentioned earlier, and I want to
come back to it, declaration of trust. So I want to ask
you, what is a declaration of trust?
Yasmin Khan-Gunns (08:14):
Ideally, you would enter into one when you're about to
purchase a property. And a declaration of trust is a
specific legal document setting out how you and your partner hold
that property. So it would set out the shares in
which you hold it, whether it's 50-50, 60- 40. It would
set out how the mortgage is being paid. So you
could state this person's paying this amount in the mortgage
(08:35):
a month and this person's paying this amount in the
mortgage. It would set out who paid the deposit or in what
proportions, and whether that deposit will be returned in the
event of a sale or not. It can set out
things like who's going to pay the outgoings, who's going
to pay the utilities. And importantly, it can set out
what happens in the event that the couple splits up
and what happens in the event of a sale. So I'd say declaration
(08:59):
of trust is really important when you buy a property.
And if you want to add to the declaration of
trust, then you enter into a cohabitation agreement. Because a
cohabitation agreement goes further, it gives more flavor to the declaration
of trust.
Kia (09:09):
Oh, this is a lot to take in. A lot
of people, you don't really factor in everything. And it
is sometimes difficult to talk about money, but I think
here is highlighting some of the things that should be
spoken about, especially before doing something so big as buying
a property. It's a massive investment, so maybe having that laid
out can give both parties peace of mind. What happens
(09:31):
in the event that there is perhaps a couple who
have bought property together, maybe thought they'd be together forever,
but sometimes life happens and they end up splitting? What
happens to the property in that event?
Yasmin Khan-Gunns (09:43):
So if it's being held in joint names, then the
couple needs to look at how they hold the property.
So going back to holding it as tenants in common
or joint tenants. If they hold it as joint tenants,
then the law presumes that the property will be split
equally, 50-50. If they hold it as tenants in common,
then the law will look at what's written in the
(10:03):
conveyancing documents. If something's written, for example, 60-40 split, then
that's how the property will be dealt with. If nothing's
written, then the law will presume 50-50. So looking at
that first determines what should happen. Then you need to
discuss with your partner, do you want to sell or
is one person keen to stay in the property? Going
back to that, if one person is keen to stay
(10:25):
in the property and the other person will agree to it, then
you need to work out a buyout calculation for that
person that's staying to buy out the person that's leaving.
Working out that calculation differs. Usually you could go to
three estate agents to try and find the average value
of the property and then work out the calculation from
that. Or you can go to a surveyor and get
a more formal valuation of the property, which tends to
(10:48):
be a bit lower than the estate agent value. Then
what should happen in the interim? Should the person that's
intending to stay in the property continue on the mortgage?
So discussing those interim arrangements. If there is a sale,
however, the parties need to consider who they're going to
appoint as their lawyers, conveyancing lawyers, their estate agents. And
eventually, the property will be sold or one person will
(11:08):
buy out. But if it's sold and one person's actually like, "
Well, I don't really want it to be split 50- 50
because actually I've been contributing towards mortgage more than you.
I want a greater share in the property." That can
happen. So if one person is seeking a greater share
in the property than the original purchasing documents, the burden of
proof is on them to show why.
Kia (11:28):
And what does the law say then about how you
should divide up the stuff that you've bought or acquired
while you're together?
Yasmin Khan-Gunns (11:35):
So it's a bit wishy- washy, because actually it really
depends on whether you can reach an agreement between yourselves.
But generally speaking, personal possessions -- so that's your white goods, your
fridge, your freezers, your TVs, your sofas, all your kind of belongings
that are shared between you and the house -- if you
can't deal with it by agreement, usually the person that
purchased the item will keep the item. But ideally you
(11:58):
would reach an agreement between yourself. In terms of gifts.
So by the very nature of their name, if someone
gifts you something, if your partner gifts you something, you're
generally entitled to keep that because it's a gift. So
jewelry, for example. If you're given a ring or something
like that, you keep the ring. When it comes to
pets, it's quite an emotional topic. Sadly, or maybe surprisingly,
(12:20):
they're treated like property, like any other possession. So if
you can't reach an agreement on the pets, then what
happens is usually the person that the pet is registered
in, microchipped in, for example, keeps the pet. But all
of this could be put in the cohabitation agreement. You
can deal with it all in the cohabitation agreement. So
it would be advisable to look into that if you
are thinking of living with someone.
Kia (12:42):
So if you move in with your partner and they own
the place, where does that leave you if you were to
split in the future?
Yasmin Khan-Gunns (12:49):
Not in a very good position, because if you are
unmarried, then your rights is extremely limited. So you move
into your partner's place and your partner's actually like, " Well,
it's not working out. I want you to leave." Technically,
you could be out the door the next day. You
have no rights to live in that property because you're
not married. In terms of any financial claims you can
make over the property. Again, you have no financial interest
(13:11):
in that property, even if you've been paying the outgoings,
sharing the council tax, sharing the gas and electricity bills.
There are some limited exceptions. They are limited and they
are usually confined to if you make direct contributions towards the
mortgage or direct contributions towards the deposit, or if you
pay for renovation works for the property that substantially increase
(13:34):
the property. Then you may be able to claim something.
Difficult area of law. It's trust of land civil proceedings.
Legal advice would need to be sought as soon as possible.
Kia (13:43):
So when you say direct contributions to the mortgage, that
isn't paying your partner your contribution, that is actually direct
to the mortgage company?
Yasmin Khan-Gunns (13:51):
Well, it's a bit unclear. You wouldn't pay direct to
the mortgage company because the mortgage would presumably be in
their name. But if you pay money to your partner
and the reference, for example, is towards mortgage, then that's
quite good evidence that you are paying towards mortgage. Whereas
if your reference was rent, your partner could argue, " Well,
you're not paying towards mortgage, you're paying me rent." So
it all kind of depends on what you're labeling.
Kia (14:14):
Oh, such a gray area, isn't it? We've covered a
lot in this episode, and it's good to know the
things we should put in place to make sure that
we're all protected. I almost don't want people to be
scared. I feel like we've used a lot of big
words. We're talking about if you separate what might happen.
And I know that some people might be listening thinking, "
(14:34):
Oh, but I'm with my partner. I want to move
in." So we don't want to deter people and scare
them. It's just being aware of what you can do
to make sure that you're protected so then that blissful
time lasts long, and if it doesn't last, you are
still protected. But this has been really good, and I've
learned so much. So before we wrap up, I want
to ask you, what are your top three tips for
(14:54):
people to think about before moving in together?
Yasmin Khan-Gunns (14:57):
Choose your partner wisely. You want to make sure that
you fully trust your partner. You're going into a big
thing with them, whether it's renting or whether it's purchasing
property. It's a big financial responsibility. You want to ensure that
you completely know them and you understand them and that
you know about their finances. You do not want to
be entering into something with someone who's financially reckless. So,
(15:18):
trust your partner and choose your partner wisely. Secondly, you
want to be thinking about having and being able to
have open communication with your partner. If you can't have
open communication with them, it's going to be very difficult.
You want to have communications and talk about what will
happen when you start living together and what should happen in
the event that things might not work out. Have those discussions.
(15:40):
And finally, I'd say be transparent about your finances. At
the outset before you've even purchased property or start renting
together, talk about your incomes, your liabilities, what credit cards
you have, what debts you might be in, and your
savings. Because you're being tied in financially with this person.
You need to be aware, at least roughly, what their
financial background is.
Kia (16:00):
That's some really good points. And we have learned a
lot this episode. So Yasmin, thank you so much for
joining us and imparting your incredible knowledge.
Yasmin Khan-Gunns (16:09):
Thank you.
Kia (16:12):
Lots to think about before moving in with someone. I'd
love it if you could review the podcast, spread the
word, and help others get A Little Bit Richer too.
Keep up with the show on TikTok and Instagram @legalandgeneral. Thank you for
listening. See you soon.
Hey, this is Kia. Welcome to another episode of A
Little Bit Richer, brought to you by my friends at
Legal & General. Moving in with someone is a big decision.
Whether you are renting or buying, there's a lot of
things to think about. So today I'm joined by award-
winning family lawyer Yasmin Khan- Gunns. Yasmin's clients range from
successful business professionals, celebrities, and stay- at- home mothers to expats, couples moving
(00:24):
in together, and couples getting married. Yasmin is also the
woman behind the Instagram @ londonfamilysolicitor and shares guidance on some
of the tricky issues that lawyers can help with. She's
here today to talk us through what you should be
thinking about before moving in with someone, and ways you
can avoid getting into a sticky situation if the relationship
breaks down. Welcome, Yasmin.
Yasmin Khan-Gunns (00:46):
Thank you. Great to be here.
Kia (00:48):
So we are talking about moving in together, people moving
in, whether it's friends, family, or partners moving in. And
it is a lovely time, it's a great time and
people are happy and it's something that we should celebrate.
Yasmin Khan-Gunns (01:01):
Yeah.
Kia (01:01):
But there are things that we need to consider before
moving in.
Yasmin Khan-Gunns (01:05):
Put it this way. You take out car insurance. You
take out life insurance. You take out house insurance. All
these things are important in case the worst happens. So
it's always good to be aware now before you begin
cohabiting, before you buy with someone, what could happen in
the future. See it as your insurance. This knowledge is
your insurance.
Kia (01:22):
I love this. So to start us off, if someone's
planning on renting with someone, what should they be thinking
about before moving in?
Yasmin Khan-Gunns (01:31):
First and foremost, I think they need to be thinking
about affordability, because you want to make sure that the
person that you are moving in with can afford their
payments towards the rent and can afford their payments towards
the outgoings. And that's particularly important if you're going to
be sharing, for example, bank accounts with them, because their
poor credit history could affect you. So that's the first
thing I'd think about. Second thing is tenancy agreement. Make
(01:54):
sure you read your tenancy agreement carefully. And also decide
whose name's it going to be in. Is it going
to be in one person's sole name or is it
going to be in multiple people's names? So really have
those discussions first and foremost, because that affects your rights
and responsibilities under the tenancy agreement. Third thing is think
about the deposit. Who is going to pay for the
deposit? Where's it going to be held? And what should
(02:15):
happen to the deposit in the event that the tenancy
comes to an end or if one person just wants
to leave the tenancy agreement early? And finally, I think
importantly, is how you're going to split the costs. Talk
about who's going to pay the rent, in what proportions
you're going to pay the rent, who's going to pay
the utilities, the council tax. So really, it's important to
(02:36):
have those conversations at the outset, open, honest communications, and
ideally have it written down somewhere, WhatsApp, email, written agreement, anywhere.
Kia (02:45):
I know that a lot of people listening have probably
moved in with someone at some point and has not
had these conversations, but it makes a lot of sense.
But let's talk about after you've moved in, what are
some of the things that you should consider to make
sure that you're a little bit more protected? For example,
what can you put into place to make sure that
if there are any issues that arise, that are dealt
(03:05):
with fairly?
Yasmin Khan-Gunns (03:07):
I'd start with household budgeting. Who is going to pay
for the things that are every day? For example, the food
shop, the cleaning supplies, and the communal items. You want
to be thinking about having an emergency fund. Maybe you
are contributing into a pot every month, maybe 20, 30 pounds,
so that in the event that something breaks, such as
a TV, who's going to pay for that? Then you
(03:28):
should really be thinking about what happens if one of
you, if you're renting with siblings or with friends, one
of you gets a new partner and that girlfriend and
boyfriend starts coming around more and more often. One day,
two nights a week, three nights a week, and then
eventually they're pretty much living with you. How's everyone going
to feel about that, and should that new partner be
contributing in any way? And I think finally, thinking about
(03:49):
exit strategies. What's going to happen if one person wants
to leave the tenancy early? What happens to their share
of, say, the council tax from the part they were
living there or they moved out. And should they get
their deposit back? Or should they get it back now,
later, or forfeit their deposit, and what's going to happen?
So there's some key things to think about. And I
think what really could help in the situation is if
(04:11):
the people entering into the tenancy agreement consider having a
cohabitation agreement. And that's a document that can set out
the answers to all of these questions, essentially, making it
really clear what should happen during the tenancy and in
the event that tenancy ends.
Kia (04:25):
So a cohabitation agreement, you said it sets out what
that would look like, but does it need to be
formal? Do you need to go to a lawyer to
do that? Can you have one written out yourself? Can
you find a template online? What's the best way to
go about actually setting that up?
Yasmin Khan-Gunns (04:39):
So just to clarify, a cohabitation agreement is an agreement
between two people setting out the financial and practical arrangements
during cohabitation and in the event that that cohabitation ends.
So that can include... And I'll go back to your
question in a second, but that can include things like,
well, if you're buying a property with someone or if
you're renting, how the rental payments will be dealt with,
how the mortgage will be dealt with, what should happen
(05:01):
to the sofa, the TV, the white goods? What should
happen in the event of a sale or the tenancy
coming to an end? It can include so many things,
including pets. Usually you would go to a family lawyer to draft
the cohabitation agreement. And the cost, it really depends. It
depends on the hourly rate of the family solicitor, but
it could be anywhere between 1,500 to 5, 000 upwards plus VAT,
(05:25):
depends how simple or complex it is. But it's a
really, really useful tool to have because it makes everything
clear and it makes a separation process, if it gets
to that, much easier.
Kia (05:35):
Definitely something to consider. So we've spoken a lot about
renting then. If you're planning on buying with someone, is
there anything else that you should specifically be thinking about
before you move in?
Yasmin Khan-Gunns (05:48):
You need to really think about how the property is
going to be held. Is it going to be held in
one person's sole name or is it going to be
held in joint names? You can hold the property in
two ways in joint names. To make it really simple,
you can hold it as tenants in common or joint
tenants. Now, joint tenants is where you hold the property
50-50, unless you have an agreement called a declaration of
(06:09):
trust stating otherwise. And a tenants in commons is where
you could hold the property in specified shares. So for
example, X has 60%, Y has 40%. Or you can
also hold it as 50-50. It's slightly complicated, but you
can have it as 50-50 or you can have it as specified
shares. Now the difference between joint tenants and tenants in
common, and that's quite an important difference, is with joint
(06:30):
tenants, if you sadly pass away, your share of the
property automatically goes to the other co- owner. Whereas tenants
in common, if you pass away, your share does not
automatically go to the other owner, it goes and passes
under whoever you've put in your will. Your parents, for
example, or your siblings. That's the first thing you should
consider, how you're holding the property. Secondly, how's the deposit
(06:50):
going to be funded? Is one person paying the deposit? Are
they both paying the deposit? And if they're both paying,
equal contributions, not equal. If it's not equal, do you
want some sort of an agreement to say that you
get that money back if the property is sold, or are
you happy for it just to be 50-50 and you kind of
forfeit the bigger amount? So think about your deposit. You
(07:11):
need to think about how the mortgage is going to
be paid. Sometimes when one person is earning a greater
income, they may contribute a bit more towards mortgage. And
alongside that, how the utilities are going to be dealt
with. You also need to think about what happens if
one of you loses their job or there's an illness.
Will one person take over the mortgage payments and utilities
(07:32):
or not? To have these discussions really, really early on.
And then you should be thinking about property maintenance, repairs.
Are you going to have a fund to deal with
that? You don't have the surplus income, it's a bit
tricky. So, something to think about. And then what happens
in the event that one person wants to sell and
the other person doesn't? It happens. How would you calculate
(07:55):
the buyout if one person was going to buy out
the other? Lots to think about. And again, a cohabitation
agreement can really, really help here, setting all these answers
out in a clear agreement to make it super simple
for everyone.
Kia (08:07):
There was a phrase that you mentioned earlier, and I want to
come back to it, declaration of trust. So I want to ask
you, what is a declaration of trust?
Yasmin Khan-Gunns (08:14):
Ideally, you would enter into one when you're about to
purchase a property. And a declaration of trust is a
specific legal document setting out how you and your partner hold
that property. So it would set out the shares in
which you hold it, whether it's 50-50, 60- 40. It would
set out how the mortgage is being paid. So you
could state this person's paying this amount in the mortgage
(08:35):
a month and this person's paying this amount in the
mortgage. It would set out who paid the deposit or in what
proportions, and whether that deposit will be returned in the
event of a sale or not. It can set out
things like who's going to pay the outgoings, who's going
to pay the utilities. And importantly, it can set out
what happens in the event that the couple splits up
and what happens in the event of a sale. So I'd say declaration
(08:59):
of trust is really important when you buy a property.
And if you want to add to the declaration of
trust, then you enter into a cohabitation agreement. Because a
cohabitation agreement goes further, it gives more flavor to the declaration
of trust.
Kia (09:09):
Oh, this is a lot to take in. A lot
of people, you don't really factor in everything. And it
is sometimes difficult to talk about money, but I think
here is highlighting some of the things that should be
spoken about, especially before doing something so big as buying
a property. It's a massive investment, so maybe having that laid
out can give both parties peace of mind. What happens
(09:31):
in the event that there is perhaps a couple who
have bought property together, maybe thought they'd be together forever,
but sometimes life happens and they end up splitting? What
happens to the property in that event?
Yasmin Khan-Gunns (09:43):
So if it's being held in joint names, then the
couple needs to look at how they hold the property.
So going back to holding it as tenants in common
or joint tenants. If they hold it as joint tenants,
then the law presumes that the property will be split
equally, 50-50. If they hold it as tenants in common,
then the law will look at what's written in the
(10:03):
conveyancing documents. If something's written, for example, 60-40 split, then
that's how the property will be dealt with. If nothing's
written, then the law will presume 50-50. So looking at
that first determines what should happen. Then you need to
discuss with your partner, do you want to sell or
is one person keen to stay in the property? Going
back to that, if one person is keen to stay
(10:25):
in the property and the other person will agree to it, then
you need to work out a buyout calculation for that
person that's staying to buy out the person that's leaving.
Working out that calculation differs. Usually you could go to
three estate agents to try and find the average value
of the property and then work out the calculation from
that. Or you can go to a surveyor and get
a more formal valuation of the property, which tends to
(10:48):
be a bit lower than the estate agent value. Then
what should happen in the interim? Should the person that's
intending to stay in the property continue on the mortgage?
So discussing those interim arrangements. If there is a sale,
however, the parties need to consider who they're going to
appoint as their lawyers, conveyancing lawyers, their estate agents. And
eventually, the property will be sold or one person will
(11:08):
buy out. But if it's sold and one person's actually like, "
Well, I don't really want it to be split 50- 50
because actually I've been contributing towards mortgage more than you.
I want a greater share in the property." That can
happen. So if one person is seeking a greater share
in the property than the original purchasing documents, the burden of
proof is on them to show why.
Kia (11:28):
And what does the law say then about how you
should divide up the stuff that you've bought or acquired
while you're together?
Yasmin Khan-Gunns (11:35):
So it's a bit wishy- washy, because actually it really
depends on whether you can reach an agreement between yourselves.
But generally speaking, personal possessions -- so that's your white goods, your
fridge, your freezers, your TVs, your sofas, all your kind of belongings
that are shared between you and the house -- if you
can't deal with it by agreement, usually the person that
purchased the item will keep the item. But ideally you
(11:58):
would reach an agreement between yourself. In terms of gifts.
So by the very nature of their name, if someone
gifts you something, if your partner gifts you something, you're
generally entitled to keep that because it's a gift. So
jewelry, for example. If you're given a ring or something
like that, you keep the ring. When it comes to
pets, it's quite an emotional topic. Sadly, or maybe surprisingly,
(12:20):
they're treated like property, like any other possession. So if
you can't reach an agreement on the pets, then what
happens is usually the person that the pet is registered
in, microchipped in, for example, keeps the pet. But all
of this could be put in the cohabitation agreement. You
can deal with it all in the cohabitation agreement. So
it would be advisable to look into that if you
are thinking of living with someone.
Kia (12:42):
So if you move in with your partner and they own
the place, where does that leave you if you were to
split in the future?
Yasmin Khan-Gunns (12:49):
Not in a very good position, because if you are
unmarried, then your rights is extremely limited. So you move
into your partner's place and your partner's actually like, " Well,
it's not working out. I want you to leave." Technically,
you could be out the door the next day. You
have no rights to live in that property because you're
not married. In terms of any financial claims you can
make over the property. Again, you have no financial interest
(13:11):
in that property, even if you've been paying the outgoings,
sharing the council tax, sharing the gas and electricity bills.
There are some limited exceptions. They are limited and they
are usually confined to if you make direct contributions towards the
mortgage or direct contributions towards the deposit, or if you
pay for renovation works for the property that substantially increase
(13:34):
the property. Then you may be able to claim something.
Difficult area of law. It's trust of land civil proceedings.
Legal advice would need to be sought as soon as possible.
Kia (13:43):
So when you say direct contributions to the mortgage, that
isn't paying your partner your contribution, that is actually direct
to the mortgage company?
Yasmin Khan-Gunns (13:51):
Well, it's a bit unclear. You wouldn't pay direct to
the mortgage company because the mortgage would presumably be in
their name. But if you pay money to your partner
and the reference, for example, is towards mortgage, then that's
quite good evidence that you are paying towards mortgage. Whereas
if your reference was rent, your partner could argue, " Well,
you're not paying towards mortgage, you're paying me rent." So
it all kind of depends on what you're labeling.
Kia (14:14):
Oh, such a gray area, isn't it? We've covered a
lot in this episode, and it's good to know the
things we should put in place to make sure that
we're all protected. I almost don't want people to be
scared. I feel like we've used a lot of big
words. We're talking about if you separate what might happen.
And I know that some people might be listening thinking, "
(14:34):
Oh, but I'm with my partner. I want to move
in." So we don't want to deter people and scare
them. It's just being aware of what you can do
to make sure that you're protected so then that blissful
time lasts long, and if it doesn't last, you are
still protected. But this has been really good, and I've
learned so much. So before we wrap up, I want
to ask you, what are your top three tips for
(14:54):
people to think about before moving in together?
Yasmin Khan-Gunns (14:57):
Choose your partner wisely. You want to make sure that
you fully trust your partner. You're going into a big
thing with them, whether it's renting or whether it's purchasing
property. It's a big financial responsibility. You want to ensure that
you completely know them and you understand them and that
you know about their finances. You do not want to
be entering into something with someone who's financially reckless. So,
(15:18):
trust your partner and choose your partner wisely. Secondly, you
want to be thinking about having and being able to
have open communication with your partner. If you can't have
open communication with them, it's going to be very difficult.
You want to have communications and talk about what will
happen when you start living together and what should happen in
the event that things might not work out. Have those discussions.
(15:40):
And finally, I'd say be transparent about your finances. At
the outset before you've even purchased property or start renting
together, talk about your incomes, your liabilities, what credit cards
you have, what debts you might be in, and your
savings. Because you're being tied in financially with this person.
You need to be aware, at least roughly, what their
financial background is.
Kia (16:00):
That's some really good points. And we have learned a
lot this episode. So Yasmin, thank you so much for
joining us and imparting your incredible knowledge.
Yasmin Khan-Gunns (16:09):
Thank you.
Kia (16:12):
Lots to think about before moving in with someone. I'd
love it if you could review the podcast, spread the
word, and help others get A Little Bit Richer too.
Keep up with the show on TikTok and Instagram @legalandgeneral. Thank you for
listening. See you soon.
Popular Podcasts
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.