Buying a home with your other half is a common step in many relationships, but taking the plunge in both love and property can become an expensive undertaking if the romance sours.
Taking legal precautions can help avoid financial burdens, however more than 50 per cent of Australians still believe that buying property with a girlfriend or boyfriend is too risky, according to a recent survey.
Conducted by HomeLoanFinder.com.au, the survey also found that around 35 per cent of respondents thought only married couples should take out a mortgage together.
Buying a home with a partner may be a quick way to cut down on the costs of purchasing property, but there are potential dangers, warned website publisher Jeremy Cabral.
“It is crucial to research this option thoroughly and ensure that both parties are in agreement on the terms and conditions of this undertaking before moving forward,” he said.
Taking legal precautions such as drawing up a financial contract can cost anywhere between $4000 and $10,000, significantly less than the expenses involved if a separation descends into a bitter battle over property.
Financial agreements between couples are becoming “more and more common”, says Mark Phillips, a partner at Symon Phillips Lawyers.
“People know about it and are aware of protecting themselves,” he said.
“A bit of advice and a bit of planning can avoid a catastrophe later on.”
There are also legal and financial risks for de facto couples, Mr Phillips said.
“If parties have been together for two years, it’s as if they were married in regards to property,” he said.
“It can now become very messy, where they buy a property and own it equally, but one may have put in more money.”
Most couples now buy properties as joint tenants rather than tenants in common, according to Carlos Turini from Elringtons.
“A joint tenant owns a property equally with another person and, upon the death of one party, the other automatically becomes solely entitled to full title to the property,” he said.
“With tenants in common, upon the death of one party, his or her share goes to his or her estate. Also, tenants in common may hold title in different proportions.”
Story by Stephanie Anderson Story source: www.domain.com.au
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