Buying Property in Partnership (Shared Ownership) Advice Needed

freshofftheplane on 16/11/2020 - 15:40
Last edited 16/11/2020 - 15:40

Hey everyone,
My partner and I have been together for over 10 years and we're looking into buying our first home together.
We have discussed the financial aspects and agreed that because I bring the majority of the funds that will go into buying the house - we should own non-equal shares to reflect that.

I've read a bit online but would really like to get some ideas from people who have done it before, how do we go on about this and what are the consequences of doing so when it comes to taking a home loan?

Cheers

Financial

Comments

  • whooah1979 on 16/11/2020 - 15:45
    +4

    we should own non-equal shares to reflect that.

    Make sure you get this in writing before signing the contract.

    • MS Paint on 16/11/2020 - 15:49
      +15

      And if they have kids and separate in the future it will mean jack sh!t.

      Source: IANAL and I'm also not a lawyer.

      OP - why are you making your relationship out like a business transaction? Bloody weird.

      • whooah1979 on 16/11/2020 - 15:59

        BFA are legally binding under Australian law.

        • [Deactivated] on 16/11/2020 - 20:38

          Keep in mind both parties need to have independent legal advice before they become binding.

      • netjock on 16/11/2020 - 16:25

        Actually on divorce you might split 50/50 then you activate the contract and get your share back.

        Otherwise you could activate the contract and get your share back then have to split it 50/50. That would be a bad move.

        OP - why are you making your relationship out like a business transaction? Bloody weird.

        Equality I assume

        • Slippery Fish on 16/11/2020 - 19:47

          Equality would be the partner getting the larger share to bring both parties to level amounts of wealth. You mean equity where all parties start at the same level and the asset growth is added by income of each party

          • netjock on 16/11/2020 - 21:33

            @Slippery Fish: No "equality"

            As in a decent day's pay for a decent day's work.

            If a person puts in 75% then they are entitled to 75% of the equity not 50/50 split with the other half that puts in less. Recognition for contribution and work done. Equality.

            • Slippery Fish on 17/11/2020 - 09:11

              @netjock: Just because you don't know the meaning doesn't mean you can argue lol. Have a visual representation…

              https://www.google.com.au/search?sxsrf=ALeKk03tEwshZSBTWIIl2…

              Equality would be both partners putting in what they had and sharing the final result evenly.

              • netjock on 17/11/2020 - 11:17

                @Slippery Fish: So how do you explain male / female pay inequality?

                You're interpreting it as 50/50 is equality.

                I am talking about equality as in recognising the rightful shares which you have contributed. Attributing equity is just the outcome of that.

                Maybe you should really understand the context of the language used. Googling English word definitions doesn't give you context. It is like the word "right" can mean different things in different sentences and depending on the context within a paragraph.

      • whooah1979 on 16/11/2020 - 16:39
        -2

        OP - why are you making your relationship out like a business transaction? Bloody weird.

        Mackenzie Scott only kept 4% of her Amazon stocks.

        People should always make plans to protect their assets in case things doesn't work out.

        • lubos on 16/11/2020 - 18:23
          +2

          Mackenzie Scott only kept 4% of her Amazon stocks.

          You are confused. She is the second largest Amazon shareholder owning 4% of the company. Her ex-husband owns 12% of the company. She received 25% of their common stake. Not 4%.

      • tsunamisurfer on 16/11/2020 - 17:05
        +2

        Of course the man should leave with more of the assets if he put in more.

        • netjock on 16/11/2020 - 21:35
          +1

          OP just said partner. Could be same sex relationship.

      • Zachary on 19/11/2020 - 02:18

        sounds you like you got some experience…..with break ups….on marrriages…

  • ChunkyToast on 16/11/2020 - 15:49
    +6

    Go see a lawyer.

  • SF3 on 16/11/2020 - 16:11

    what are the consequences of doing so when it comes to taking a home loan?

    Ask your lender.

    But I think consequences stem a lot deeper, but only you can speak on the relationship with your partner… Like others said ask a lawyer sooner rather than when you have to react to some unforeseen situation… If you and your partner are that close and open, it shouldn't be a problem to discuss seeking lawyer advice then you both have a peace of mind.

    • netjock on 16/11/2020 - 16:29
      +1

      But I think consequences stem a lot deeper

      In the eyes of the lender you are joint liable. Which means they can go after each of them for the whole lot. Your agreements between yourselves is a civil matter. I doubt a bank would be happy to find themselves being able to claim 25% of the debt from one party and get stuffed on the other 75%

      Limited liability is like companies going to borrow, there will be an interest rate premium.

      • Typical16-bitEnjoyer on 16/11/2020 - 19:16

        Correct. The bank can claim 100% of any future loss from either party.

  • carwashhair on 16/11/2020 - 16:23
    +1

    Would you get a pre-nup as well?

  • naruto128 on 16/11/2020 - 16:29
    +3

    I thought that living together more than two years considered de facto relationship so assets acquired during the period will be split equally in event of a split.

    • freshofftheplane on 16/11/2020 - 16:30
      +1

      Sure, but what about assets acquired before the period? That's actually the point in case - the house is being bought with funds I have inherited

      • plmko on 16/11/2020 - 16:34
        +3

        You need to see a lawyer, family law doesn't care for logic only for equity.

        • pharkurnell on 16/11/2020 - 19:40

          As I'm finding out right now..

        • pebee47 on 17/11/2020 - 20:52

          My understanding is that the Divorce process is only interested in ascertaining that there exists an irreconcilable breakdown in the marriage; and suitable care for any minors affected.
          Property distribution is settled by agreement or dealt with in a civil court.

          Also in WA more than one party can own property with unequal shares. Most mortgage lenders require " All borrowers to be on the title; and all title holders be on the mortgage". This often meant that where "Mum/Dad" were using their (very) positive financial position to help "the Kids" buy a place, they might be made a 1% shareholder.
          Married/de facto/unmarried couples may also own differing % of a property.

          " There are two main forms of co-ownership: tenancy in common and joint ownership.

          Tenancy in common is a principle of property law in Australia that allows two or more people to have a defined share of a property and to transfer their interests independently.

          Should one of the tenants die, their interest will be bequeathed to a beneficiary of their choosing.

          Tenancy in common is a more flexible form of property ownership as it allows parties to own land in equal or unequal shares. Co-owners lay out the exact terms of their interests, rights and obligations in a co-ownership agreement.

          The other form of co-ownership is joint tenancy, which is traditionally used by couples. Join tenants own the entire interest in the property, but as individuals, they own nothing.

          Joint tenants also have rights of survivorship. Which means that, if one tenant dies, the surviving joint tenant assumes ownership of the whole property."

      • Slippery Fish on 16/11/2020 - 19:57
        +2

        Set up a family trust or such and then neither of you own it.

    • pharkurnell on 16/11/2020 - 19:41

      Its a LOT less than 2 years!!!!!!!!!

    • [Deactivated] on 16/11/2020 - 20:35
      +2

      There's no such rule as 'split evenly'. Assets brought into the relationship as well as during are considered. It is set up so that unpaid work is also considered if it makes it to court (raising kids, cooking, cleaning etc).

      The reality is most splits never make it to court and so are just decided by the individuals involved. If one partner has been contributing non-finacially or there are kids involved it can look quite uneven. (Exacerbated by the fact that women more often than not keep the house while men usually keep their super).

  • BugsBunnyAUS on 16/11/2020 - 16:31

    Following this post closely, as I have wondered the same. Again, similar in that I earn more than my partner and have more in savings.

    • MS Paint on 16/11/2020 - 16:35

      So do you refer to your other half as your business partner?

      • whooah1979 on 16/11/2020 - 16:46
        +3

        ~33% of marriages end up in divorce.

        There is nothing wrong with making plans in case things doesn't work out.

        • DashCam AKA Rolts on 16/11/2020 - 18:18
          +2

          100% of people who marry will die!

          • pebee47 on 17/11/2020 - 20:54

            @DashCam AKA Rolts: 100% of people in the past drank water and died!
            Give beer a chance!

            • DashCam AKA Rolts on 17/11/2020 - 21:19

              @pebee47:

              100% of people in the past drank water and died!

              Only those who consumed dihydrogen monoxide. Easily confused with common water.

      • BugsBunnyAUS on 16/11/2020 - 18:11

        Absolutely not. But I have never bought property nor made a big (more than a $15k car) financial commitment before. I think for me, I would enjoy the peace of mind knowing that at least my financial position is relatively & proportionally secure when committing to such a transaction with someone else. I think it would actually be beneficial.

  • AustriaBargain on 16/11/2020 - 17:03
    +3

    As long as you do the same extra ratio of work to maintain the house, then sure. If it's 70/30, then you should be spending 7 hours cleaning it for every 3 hours she spends cleaning it. Total amount of time spent on any kind of admin should be 3 hours for her for every 7 hours you have to give up of your life for the whole thing at the end of the day. She should probably only put 30% effort into raising your kids too, and you should spend 70% of your life birthing and raising those kids. And you need to show her 7 units of attention and devotion, she only needs to show you 3 units for every 7 of yours to maintain the relationship.

    • ihbh on 16/11/2020 - 20:01

      Are you a woman?

    • ozbjunkie on 18/11/2020 - 06:49

      If cleaning something was buying it surely I'd own a portion of my apartment by now.

      Cleaning is part of living in the house. She lives there, he lives there. They share cleaning. Would be the case as renters. No need to change as buyers.

      I pay 70% I own 70%, and not any more even if I do 100% of the cleaning.

      • AustriaBargain on 18/11/2020 - 10:12

        Why should she pay 50% to reshingle a roof on an investment property that she doesn’t own 50% of? Or why should she spend as much time on paperwork around the investment property as him, if she’s only 30% invested in the whole deal?

        • ozbjunkie on 18/11/2020 - 10:19

          Are you just going to change your argument above which was about cleaning (and attention and devotion, for some absurd reason) into a new argument about paying for repairs, thinking I won't notice?

          C'mon you can do better than that.
          But probably only 30% better…

          • AustriaBargain on 18/11/2020 - 10:45

            @ozbjunkie: It was always an investment propert, not their home, wasn’t it? But the same applies she should invest 30% of her time into the home too, to maintain her end of the bargain.

            • ozbjunkie on 18/11/2020 - 12:08

              @AustriaBargain: The first mention of the word "investment" in this thread is yours.

              And to stay on topic, I'll pay 70% of the cost of any repairs for something that I own 70% of.

              Investing "time" is not the same thing as investing money. Otherwise I'm sure our wives and girlfriends would owe us a small fortune in counselling fees.

              And jokes aside, in terms of investing time, care, attention and affection, a relationship is not a 50/50 prospect, it is a 100/100 prospect. Both give 100%, and there may be times where one partner cannot give 100%, but that's where the other person's 100% comes in handy. Of course, too often, one person's percentage slips and never returns, and that's where couples fall into issues.

              That, and the expectation that someone deserves more assets than they ever contributed to the relationship, but there's a completely separate thread needed for that issue.

              • AustriaBargain on 18/11/2020 - 13:19

                @ozbjunkie: Oh investing time isn’t the same thing? Why not. If two spouses spend equal time maintaining a wooden deck to stop it from rotting, shouldn’t they appreciate equal value that the maintaining brings? And if not, shouldn’t the 70% owner be putting in 7 hours of deck scrubbing and sealing for every 3 hours the 30% investor puts into maintaining it. Also if the eventual sale of the deck profits one person twice as much, then the smaller stakeholder maybe wouldn’t care about getting back 30% value of a deck, not worth putting equal effort into maintaining it. The person who is 70% invested has more than twice the incentive to see it maintained.

                • ozbjunkie on 18/11/2020 - 17:25

                  @AustriaBargain: Good question on the deck, I would imagine since it's such a rare thing that any functioning couple would determine an appropriate split based on level of skill, physical ability, and interest.

                  I would imagine in many heterosexual relationships the male would perform 100% of this particular work, and in some others the female would do it. If it were contracted to a professional, at what may be many times the hourly rate of income for either partner, then I think splitting the cost based on share of ownership remains fair.

                  I would also contend that if I were to live in a place with another person and utilise half of the space while contributing less than half of the purchase price, it might be fair to split all maintenance 5050 to recognise that discrepancy.

                  • AustriaBargain on 18/11/2020 - 18:30

                    @ozbjunkie:

                    live in a place with another person and utilise half of the space while contributing less than half of the purchase price, it might be fair to split all maintenance 5050 to recognise that discrepancy.

                    You sound like you're talking about a housemate you just met, not the person you married 10 years ago and are planning the rest of your lives together with.

                    A marriage is surely more than just occupying space with someone like having a housemate can be. Especially if you're married with kids. Imagine spending 50% of the effort maintaining expensive China sets, or waxing decks, or whatever else. And then you only get 30% of the value when your partner leaves you and sells it all. It's all well and good if you're the man who inherited more money in this scenario. Having a person maintain your assets in your shared home, but you realise more than twice the value of those maintained assets at the end of the day. And in fact some men might be tempted to push even more of that kind of homemaking on their wives. I'm sure I could get a lot more done professionally if I had a butler to help make my homelife easy and comfortable. Would free up a lot of time and mental energy to have someone else look after my assets for me. I'd be sitting pretty 20 years from now if I left for any reason at all, whilst the wife keeps just 30% of our shared life decades in the making. How do you rebuild your life based of 30% of a shared life? Your wife would have been better off finding a richer husband to secure her financial security for potential abandonment in the future, due to the partner keeping an unequal amount of their shared financial mobility, especially as time goes on and those assets appreciate.

                    • ozbjunkie on 18/11/2020 - 21:51

                      @AustriaBargain: Who are you to criticise the decision making and preferences of OP and their partner?

                      You write "Your wife would have been better off finding a richer husband to secure her financial security" and I'm wondering who should be more offended, OP or OPs partner. Or should we all just look at you in a concerned and compassionate manner?

                      If my wife made 10 times my income, and didn't want to stay in the relationship, I'd take my share that I made happily. I don't want her money. And I don't want her to stay in the relationship due to the concern she will be worse off financially. And I'd expect the same line of thinking from a mature adult woman.

                      Your statements reflect a soft bigotry of low expectations that is as common as it is disappointing.

  • Almost Banned on 16/11/2020 - 17:04
    +1

    Owning a property in unequal shares is easy. Instead of a joint tenancy you will have a tenancy in common and can specify the shares you each hold.
    The much bigger issue is the treatment of marital assets in the event of relationship break-down.
    As others have said, you need to go see a Family Lawyer asap.

    • sonome on 17/11/2020 - 14:02

      This is the first sensible answer.

  • This Guy on 16/11/2020 - 17:09
    +1

    This is done with your conveyancer when you go to buy.

    Let them know when you book your first appointment. Then check that the paperwork shows ownership at the right percentages. If it doesn't, don't sign, or make a change in pen and both you and your partner initial next to it. Keep your copy securely out of access from your partner.

    Good luck if you choose to use a real estate agent instead.

  • [Deactivated] on 16/11/2020 - 18:40

    I'm constantly amazed at people seeking legal advice through forums like this, rather than doing the obvious thing and seeing a lawyer, when there are big dollars at stake. I am a lawyer, but I'm not giving free advice, other than to say that most of the comments above are wrong.

    • MS Paint on 16/11/2020 - 18:52

      Which are correct?

    • ozbjunkie on 18/11/2020 - 06:40

      So you're on a forum based around basically helping others by detailing your knowledge, experiences, and ideas, and instead of listing some key points the OP should think about you explain you wouldn't offer anything for free to a stranger on the internet, and to cryptically say that you believe some but not all of the above comments are correct.

      I am both impressed and incredibly unimpressed.

  • Typical16-bitEnjoyer on 16/11/2020 - 19:14
    +7

    My partner and I have been together for over 10 years

    Oh boy

    because I bring the majority of the funds that will go into buying the house - we should own non-equal shares to reflect that

    Oh boy….

    (Pre nup) We have one

    Oh boy……..

    the house is being bought with funds I have inherited

    Oh boy……………………..

    Go and see a lawyer.
    WITHOUT your partner present.

    You're in for some difficult truths.

    • freshofftheplane on 16/11/2020 - 19:37
      +1

      Ok :) thanks

    • ozbjunkie on 18/11/2020 - 06:41

      That made me smile. Speaking as an unmarried lawyer by any chance? Or do I presume too much?

  • Seraphin7 on 16/11/2020 - 20:19

    Lawyer up and discuss your specific issues, concerns, desired outcomes.

    No, seriously, that's it. If you're trying to do what I think you're trying to do, you are entering an absolute legal minefield.

  • Donaldhump on 16/11/2020 - 20:30

    Just put down equal deposit and keep ur extra in an offset acc. U lose growth but who cares

  • Lostatsea12 on 17/11/2020 - 08:04

    1. You need a lawyer.

    2. Read this so that you know what to talk to the lawyer about

    https://legalvision.com.au/joint-tenancy-and-tenants-in-comm…

    It is very simple but you need a lawyer and a definitive contract that shows what happens if the worst happens and you need to protect yourself. Hope that contract just sits in the bottom draw for life.

  • ShannonN on 17/11/2020 - 09:37

    Don't do it without a very well thought out plan and total legal advice. Friend just separated from her long term b/f they co-signed on 2 properties over the 12 or so yrs together, friend already owned 1 property outright, now despite legal contracts, pre nups etc there is a shitfight etc as former b/f refuses to pay his share of mortgage is out of work most of the time etc and has no intention of playing fair, yet as always when they started out etc all was we'll be together forever etc etc .

    It all goes pear shaped in the end and where money or assets is concerned after a breakup its every dog for themselves

    • netjock on 17/11/2020 - 11:24

      One of the biggest problem with co-sign, can't sell without other party agreeing meanwhile the bank wants their money. I'd rather be able to start selling and just hand the cash over.

      You have an important point. Even with contracts there is legal problems of which contract is executed first and do they conflict with each other and legal process (courts etc).

      Best to lawyer up if it is such a big amount of money that you'll lose sleep over.

  • TheBilly on 17/11/2020 - 11:38

    Don't ever have kids its not suitable

  • Fredfloresjr on 17/11/2020 - 12:01

    Stay away.

  • OzHunterNSW on 17/11/2020 - 13:09
    +1

    Hahahaha… advice: DON'T DO IT!
    If you proceed, both agree that contracts be drawn by Solicitor.
    Believe me… anything, can and will happen.

  • ozbjunkie on 18/11/2020 - 06:47
    +1

    The only persons financial future that will be assured with these contracts and meetings will be the lawyers themselves.

    First you'll get them written and witnessed with independent legal council for each of you.

    Then circumstances will progress.

    And one day you might have a bunch of contracts and sit in family court (?) proceedings that will leave you both financially worse than if you had both been reasonable and not had to go to court.

    But what does that matter. If my understanding is correct, you have been living together long enough that you are already married in the eyes of the law.

    Roll the dice and pay the price I guess?

  • ets27 on 19/11/2020 - 08:52
    +1

    My advice: Just don't.

    I've been with my ex about 8 years before buying a property.
    The contract stated I had 2/3 of the property and she had 1/3 of the property.

    In addition, we always said stuff like 'oh but we are never going to split' 'oh even if we split we will be mature and stay friends blah blah blah. The typical happy couple that is meant to stay forever.

    It turned out suddenly she wanted to break-up.

    She tried all the possible ways (until the only option was the expensive 'lawyer' way) to divide the property equally after we split, despite me contributing MUCH more than 2/3.
    At the end I 'won' but trust me it has been very hard and full of headaches

    I will never ever buy a property again, love friendship, being mature etc are all things that last forever until they last.
    If I will ever buying a property again instead of shares or ETFs, I will buy in partnership with myself only.

    • andylch on 14/06/2021 - 17:09

      How did she lose out in the end?

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