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Critical things to consider if you're buying a house in Ireland as an unmarried couple
As more and more couples in Ireland are choosing not to get married or are not getting married until later in life, it is important that they consider the following when buying a property together as an unmarried couple:
1. Buying the house
Unmarried couples typically want to own their home “together” but what does this mean from a legal perspective? If they buy the house together do they automatically own the house on a 50:50 basis? No, this is not necessarily the case. In most cases the share in which people own the property reflects the amount of money that those people have contributed to the purchase price.
There are two options open to the unmarried couple when purchasing the property from a legal perspective. The unmarried couple can purchase the property as follows:
- Joint tenancy – this is where both parties have an equal right to possession of the entire property. If one of the couple dies, the other automatically becomes the owner of the deceased owner’s share.
- Tenancy in common – this allows the couple to define the share of the property that each person has i.e. 50:50 or some other breakdown. Should one of you die, that person’s ownership interest passes to whoever is specified in a will or if no will, then as provided under intestacy laws.
The manner in which the property is registered affects the way in which the property can be transferred and can have tax consequences later on for the unmarried couple. It is important to discuss with your solicitor how you wish for the property to be held by you as an unmarried couple.
2. Co-Ownership Agreement
A Co-Ownership Agreement helps the unmarried couple focus on matters such as who is contributing financially, who pays for what, and what happens if one party wants to sell the house or the relationship dissolves. By agreeing and considering all these matters up front and prior to purchasing the property, any disputes can be settled without litigation or mediation. The agreement should be signed at the same time that you are signing the Contracts to purchase the house however they can also be entered into at a later stage should both parties be agreeable.
Consider a scenario where you have split, and one party wants to sell and the other doesn’t but the party who doesn’t want to sell can’t afford to buy out the other party. A co-ownership agreement could have dealt with the dissolution of the relationship and what should happen in that scenario.
3. I want to sell the property but my ex doesn’t
If an unmarried couple relationship breaks down and they both own the property and they both want to sell the property then this should be fine provided the property is not in negative equity. A co-ownership agreement is useful where only one party wants to sell. The agreement will typically provide that the seller’s share must first be offered for sale to the co-owner. If the co-owner wishes to acquire the seller’s share in the property, a price is to be agreed and the mechanism for that will typically be set out in the agreement.
If the co-owner does not want to acquire the seller’s share in the property or cannot raise the finance to purchase the share then the co-ownership agreement will usually provide that the entire property will be put on the open market for sale. Co-ownerships agreements can be tailored to suit the specific instructions of the couple.
4. What happens if one of the unmarried couple dies?
With a joint tenancy, the surviving partner will automatically inherit the property, which provides valuable protection to that surviving partner.
With a tenancy in common, the deceased partner can leave their share of the property to their cohabiting partner but this must be specified in their will. Without a will in place, the deceased party’s share in the property will not pass to the surviving partner and will pass under the rules of intestacy ultimately meaning that the surviving partner will co-own the property with a third party.
Whether a couple marries or not, having a co-ownership agreement in place for purchasing and maintaining that home can help ensure that, in a worst case scenario, you and your partner have already agreed what is to happen with the property.
WHY CHOOSE ROE SOLICITORS?
We have extensive experience in dealing with all matters relating to co-ownership agreements. If you’re looking to buy a property with a friend or partner and you are looking to speak with an experienced solicitor, then please get in touch today for a no obligation quote.
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