Blog by Christian Butler, Associate
Over the last few weeks several of the team at Silk Family Law have commented in national and regional media on a range of interesting and topical issues.
Solicitor Emily Crick provided expert comment in The Sunday Times on the pitfalls of social media posts when relationships end. Partner Kim Fellowes was interviewed by the BBC Inside Out NE & Cumbria about the legal implications for both mothers and donors using online, unregistered sperm banks.
Last week I addressed a question for “This is Money” from a parent who had helped a daughter and her boyfriend to buy a flat. The names of both the daughter and her boyfriend were on the deeds. The boyfriend was supposed to be paying the payment back as an interest free loan. When the couple split up the ex boyfriend stopped paying and the parent wanted advice on how to get the money back. It was a complex issue, throwing out several scenarios, and you can read the full article online.
The “This is Money” query once again raises concerns about the lack of legal protection for couples who live together – and the potential financial penalties for parents as in this case.
As I have blogged about before there are 3.3m cohabiting couples in England and Wales, with the majority still believing in the myth of “common law marriage”. According to research from The Marriage Foundation and The Times newspaper, separation levels among non-married couples are three times higher than those of their married counterparts.
With increasing numbers of parents helping their children onto the property ladder, I feel it is useful to repeat the tips I gave in the article for “This is Money”.
If you are planning to loan funds to your child and their partner to buy a property I advise you draw up one of the following to protect yourself:
- A loan agreement and charge against the property – the loan agreement should be prepared by a solicitor who specialises in these matters. It would record clearly any agreement in respect of repayments, interest rates, etc. The loan should then be secured by taking a charge over the property, effectively a mortgage, which provides security in the event that repayments stop and the loan falls into arrears; or
- A Declaration of Trust – strictly speaking this would not be a “loan” as such, as the parent would be an owner (either in full or retaining a share in the property). There could be an agreement that the other co-owner(s) increase their share and decrease the parent’s share, via payments of capital.
Lastly, I strongly advise that you instruct a specialist family lawyer to draw up a Cohabitation or Living Together Agreement between your child and their partner. This will set out how any property or finances are to be dealt with if the couple split up. If your son or daughter is married, or due to marry, then I would advise a Nuptial Agreement.
If you have any questions about a cohabiting relationship, please do not hesitate to email me at Christian.firstname.lastname@example.org. You can follow Silk Family Law on Twitter on @silkfamilylaw