LGBTQ+ Couples Buying a Home Together: What Instructions Should You Give Your Conveyancing Solicitor About Joint Ownership?

Purchasing a home together is one of the most significant financial commitments a couple can make. For LGBTQ+ couples, whether married, in a civil partnership, or cohabiting, it is important to consider not only the excitement of home ownership but also the legal and financial implications of how the property will be owned.

Many buyers focus on mortgages, surveys, and moving arrangements, but one of the most important discussions to have with your conveyancing solicitor is how the property will be held in joint ownership.

Making informed decisions at the outset can help avoid uncertainty, disputes, and costly legal issues in the future.

Why Ownership Structure Matters

When two people purchase a property together, they must decide how they wish to own it legally and beneficially.

Your choice can affect:

• What happens if one owner dies
• How proceeds are divided if the property is sold
• The outcome if the relationship ends
• Protection of unequal financial contributions
• Inheritance planning
• Future financial arrangements

Your conveyancing solicitor cannot assume how you wish to hold the property and will require clear instructions from you.

Joint Tenants or Tenants in Common?

One of the first questions your solicitor will ask is whether you wish to own the property as Joint Tenants or Tenants in Common.

Joint Tenants

Joint tenants own the whole property together rather than separate shares.

If one owner dies, their interest automatically passes to the surviving owner through the “right of survivorship,” regardless of the terms of any Will.

This arrangement is often chosen by:

• Married couples
• Civil partners
• Couples making equal financial contributions
• Those who wish the surviving partner to inherit automatically

While simple and effective in many circumstances, it may not be suitable for every couple.

Tenants in Common

Tenants in common own distinct shares in the property.

These shares can be:

• Equal (50/50)
• Unequal (for example 60/40 or 70/30)

Each owner’s share forms part of their estate upon death and can be left to beneficiaries under a Will.

This arrangement is often appropriate where:

• One partner contributes a larger deposit
• Contributions to mortgage payments are unequal
• Family wealth is being protected
• There are children from previous relationships
• The couple wishes to preserve flexibility in estate planning

Discussing these issues with your conveyancing solicitor before exchange of contracts is essential.

Be Clear About Financial Contributions

LGBTQ+ couples, like any other couple, may contribute differently towards the purchase of a property.

Examples include:

• One partner providing the entire deposit
• Assistance from family members
• Unequal mortgage contributions
• Contributions towards renovations and improvements

If contributions are unequal, your solicitor should be informed from the outset.

Failing to document intentions properly can lead to disputes if the property is later sold or the relationship ends.

Consider a Declaration of Trust

Where contributions are unequal, a Declaration of Trust can provide important protection.

A Declaration of Trust is a legally binding document that records:

• Ownership shares
• Deposit contributions
• Mortgage payment arrangements
• Future sale arrangements
• How equity should be divided

For LGBTQ+ couples purchasing together for the first time, this can provide reassurance that both parties’ financial interests are properly protected.

Your conveyancing solicitor can prepare this document alongside the purchase transaction.

Think About What Happens if One of You Dies

Many couples are surprised to discover how property ownership can affect inheritance.

If you own as joint tenants, ownership usually passes automatically to the surviving owner.

If you own as tenants in common, your share passes according to your Will or the rules of intestacy if no Will exists.

For unmarried couples, relying on the intestacy rules can create significant complications because cohabiting partners do not automatically inherit in the same way as spouses or civil partners.

It is therefore sensible to discuss Wills and estate planning when purchasing a property together.

Cohabiting LGBTQ+ Couples Need Additional Protection

Although marriage equality and civil partnerships provide important legal protections, many LGBTQ+ couples choose to live together without formalising their relationship.

Unmarried couples do not enjoy the same financial remedies on separation as married couples or civil partners.

If you are purchasing a property together while cohabiting, you may wish to consider:

• A Declaration of Trust
• A Cohabitation Agreement
• Updated Wills
• Lasting Powers of Attorney

Together, these documents can help provide clarity and protection for the future.

Questions to Discuss Before Instructing Your Solicitor

Before your conveyancing transaction begins, consider discussing the following:

• How much is each person contributing towards the deposit?
• Will mortgage payments be shared equally?
• Do you want equal or unequal ownership shares?
• Should a Declaration of Trust be prepared?
• What should happen if the property is sold?
• What should happen if one owner wishes to move out?
• How should ownership be dealt with if one partner dies?

Having these conversations early can make the conveyancing process smoother and help ensure your solicitor receives clear instructions.

How a Solicitor Can Help

A solicitor does much more than manage the legal transfer of property.

They can advise on:

• Joint ownership structures
• Declarations of Trust
• Cohabitation agreements
• Wills
• Protecting unequal contributions

Obtaining tailored legal advice before completion can help ensure your property ownership reflects your intentions and protects your interests.

Buying a property together is an exciting step for any LGBTQ+ couple. However, taking the time to consider how the property should be owned can provide valuable protection for the future.

By giving clear instructions to your conveyancing solicitor regarding ownership shares, financial contributions, and future intentions, you can help avoid uncertainty and ensure your investment is protected.

If you are purchasing a property with your partner, our conveyancing and family law teams can provide practical advice tailored to your circumstances and help you make informed decisions from the outset.

Many first time buyers rely on parental contributions to help them onto the property ladder. Also known as ‘Bank of Mum and Dad’

Many first time buyers have help from Bank of Mum and Dad when buying their first home.

You will need to consider the following when contributing towards the deposit

If you have decided to help your child by contributing towards the deposit for their new house you should consider whether;

1.The money will be a gift which you will give to them on an unconditional, non-refundable basis?

2.Do you expect to have the money returned to you eventually and if so when?

If the money is to be a gift, you would have no control over what happens to the property because you would have no interest in the property. This means your child could sell, remortgage or share the ownership of the property with a second person and the possible result would be the gifted money would have to be shared in the future by the child with a co-owner when the property was sold.

If you decided to gift the money and were aware that your child was going to purchase the property with another person from the outset, your child should arrange to enter into a Trust Deed with the co-owner.

A trust deed would set out the amount of the value in the property which each co-owner would be entitled to when the property is sold after the repayment of the mortgage. So if you contributed 10% of the purchase price at the beginning, the initial 10% of the sale value would be paid to you after the repayment of any mortgage on the property from the net proceeds of sale.

The Trust Deed would also set out how the remainder of the net proceeds of sale would then be divided between the co-owners and this can reflect the contributions which each owner is intending to make to the mortgage and running costs during ownership of the property.

However, this does not guarantee the full return of the initial deposit money to your child because the value of the property may drop or the amount needed to repay the mortgage and pay the selling costs may mean that the net proceeds of sale do not amount to 10% of the selling price.

If the property sells for more than the original purchase price then your child would benefit from the increase in value of the initial investment.

The Trust Deed can therefore “ring fence” any initial contribution (in percentage terms) made to the purchase of the property for the benefit of your child, and can set out the agreement at the outset between the co-owners. Once the Trust Deed has been entered into between the co-owners, it cannot be changed unless the changes are mutually agreed between them by deed.

You should consider any tax implications or any need to reconsider Estate planning which you may have already put in place in the light of a gift or a loan to your child, and take your solicitor’s advice on the implications.

For example, if you have more than one child you may wish to adjust your Will if you decide to gift money to one of your children in advance of your death, but had intended to give your Estate to your children equally.

Contributing towards the purchase of your child’s first home – What you should know

Contributing towards the purchase of your child’s first home where you expect the monies to be repaid to you on the future sale of the property.

If you have decided to help your child by contributing towards the deposit for their new house and you prefer not to gift the deposit and would like to have the deposit returned at some point in the future, your child would have to disclose that you are intending to retain an interest in the property’s value when they make their mortgage application.

You will also need to decide how you want to secure the return of the loan. This is particularly necessary if your child is purchasing the property with a co-owner because both owners will need to acknowledge that the debt will be due to you on the terms agreed.

To secure the return on the money and ensure you have a controlling influence on the property, you could become a joint legal owner of the property with your child and their co-owner.

Each of your individual shares in the value of the property would then be set out in a Trust Deed showing that you have contributed a certain percentage towards the purchase price and therefore you would receive that percentage of the net proceeds of sale at the time of sale of the property.

None of the legal owners (whether this is just you and your child or you, your child and another co-owner) could sell, transfer or remortgage the property without the agreement of each of you. However you, as a legal owner, would have to be jointly and severally liable for the payments due under the terms of the mortgage and this liability may not be suitable to you because you may have other mortgage commitments or not want such mortgage commitments.

If you do not want to have such a strong element of control and involvement, you could request your child and any co-owner allow you to take a second charge against the property, which would rank after their first mortgage, and would require them to repay you the money they owe you on sale of the property from the proceeds of sale, after they have paid the selling costs and repaid the first mortgage.

If you have a second charge they cannot sell or transfer the property or remortgage the property with a new lender without your consent, but you would not be a joint legal owner and therefore would not have any liability for the first mortgage. The first mortgage lender would need to consent to the arrangement.

The problem with this arrangement is that you are still not guaranteed to get all your money back upon the sale of the property if the value of the property falls and/or the terms of the first mortgage allow linked loan accounts or further draw-downs on the mortgage which may eat into the equity in the property, without reference to you.

If you did not receive the return of all of the money due back to you under the terms of the second charge when the property was sold, the obligation to pay would remain but you would need to seek repayment directly from the co-owners who may not have any other resources to repay you.

A less formal arrangement would be for your child and any co-owner to sign a promissory note which is a statement acknowledging that they have received the money and they are due to pay you the money back on the terms set out in the promissory note i.e. they promise to repay.

This is not secured against the property and so to enforce the repayment terms would be an action directly against the debtors. This arrangement would also need to be disclosed to any mortgage lender at the time of a mortgage application by your child.

Once an initial decision is made as to whether the deposit is to be a gift or a loan, you and your child can then decide which path to take and ask your solicitor to prepare the documents to put in place your arrangements.

It is vital that the documents are completed at the time of completion of the payment to your child or, at the latest completion of the purchase of the property, to ensure intentions are documented and no family disagreements arise in the future.