Relationships and the property market can both be complicated. When you combine them, the scope for complications gets even greater. With that in mind, here are some pointers on how your relationship can affect your home.
If you’re renting
If you rent a home and want somebody to move in with you, then you absolutely must get permission from your landlord before they do so. You should be prepared for your landlord to want to update your tenancy agreement to reflect this. You should also be prepared for your rent to be increased to reflect the increased wear and tear on the property.
If you’re the one moving into a rental home, then you need to think realistically about whether or not you could afford to maintain the property if anything happened to your partner. If the answer is no, then you need to get insurance in place. This is often a good idea anyway.
You both need to consider where you would stand if one or both of you wanted to end the relationship. Could one of you afford to keep the property without the other? Could you arrange for new tenants to take over the lease? Would your landlord allow new tenants?
If you’re buying a home with a partner
If you and your partner are paying cash, then you can simply draw up a legal agreement regarding what happens to the home if you split up. Depending on your relationship situation, this could be a cohabitation agreement, a prenuptial agreement or a postnuptial agreement.
This is definitely a situation that should usually be handled with legal advice. In fact, each half of the couple should have their own legal counsel. The legal situation regarding these contracts is complicated. In basic terms, courts will usually give weight to them provided that they meet the requirements of a valid contract.
Courts are, however, at perfect liberty to ignore all of them if they believe that this is necessary to achieve a fair split. One reason why they might do so is that the agreement has clearly become outdated. For example, a couple may have had children but not made provision for them in the prenuptial agreement.
Even without children, these agreements can become outdated. In fact, it’s almost inevitable that they do simply because life happens. This means that they should never be regarded as “set and forget”. Instead, they should be reviewed periodically for as long as the relationship lasts.
If you’re having a partner come to live in your home
If one half of a partnership owns a home and the other is renting, it often makes sense for the renter to move in with the homeowner. Both parties should, however, think carefully about both the financial implications and where they would stand in the event of a split.
Firstly, couples need to agree on whether the person moving in will pay rent or just split bills. Having a partner pay rent can make it easier to pay a mortgage. It can, however, also take the relationship into a legal grey area. This is because the renter would not just be there as a partner, they would also be a tenant.
In either case, the financial responsibility for anything to do with the house itself rests with the homeowner. If the homeowner becomes unable to meet their financial responsibilities, then the couple has to agree on what to do about it.
If they agree that the non-homeowning half of the couple will assist the homeowner, then that contribution should be formally recognised in some way. For example, the non-homeowner could loan the homeowner the money. They should therefore expect to get their money back (preferably with interest).
Alternatively, the non-homeowner could be given a stake in the property. Again, this is an issue that is best addressed with legal advice.
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