Getting onto the property ladder
The price of buying a home and getting onto the property ladder is a very familiar topic of conversation. We will have all heard how parents often provide their children and their partners with money for a deposit or money to buy a new home; perhaps also to help them with their own estate and tax planning.
Recent evidence shows that the Bank of Mum and Dad is the tenth largest mortgage lender in the country. But what happens if the couple separate and the parents wish to recover the money they have paid? Or the couple cannot agree about how the equity of the property should be divided. How does this affect the current popularity of the trend?
An increasingly common problem
A recent article in the Times sets out what is becoming an increasingly common problem in the Family Courts. In many cases, at the time of purchase what might happen to the money is not even considered. Or it is simply an afterthought, or something to be sorted out at a later date.
Sometimes the money is said to be a gift and therefore will be given away and is unlikely to be recoverable by the parents. The Family Courts still then hear arguments from the couple about this. For example, that it was a gift to one and not the other. Or that the contribution from one’s parents should be regarded as something that should stay on that side of the family and not be shared with their former partner.
Sometimes, the money is said to be a loan and one that is to be repaid. However, even if this is so, there is rarely any record of what is to be repaid, by whom and on what terms. When families fall out, what might have been understood to be a gift, can become a loan in the eyes of one party or the other.
The Family Court is often faced with trying to establish what was intended and trying to piece together a picture of the true position. This can be against the backdrop of an emotional family breakdown. When memories can become clouded and recollections skewed, and it is perhaps many years down the line too.
A record of intentions
If you are considering entering into this form of arrangement, then the answer is to record what is intended at the time the money is paid over. This should be with the assistance of lawyers who are experienced in dealing with agreements of this type and who can ensure that in the event of a future dispute, the rights and obligations of all concerned are set out clearly.
This ought to avoid potentially lengthy and costly legal disputes. As the article below mentions; if the number and complexity of these types of disputes continues to rise, then parents may start to think twice before making money available to their children. Especially if they are faced with losing savings, investments or pensions and being drawn into expensive Court proceedings.
If you or your family have found yourself in this situation, there’s no substitute for taking timely legal advice in order to record what has already happened. Or to try and protect hard earned savings or investments in the Family Court.
The Times News Story - Parents Take Their Children to Court Over Home Loans
