Leading solicitor appeals to mortgage brokers to play their part in safeguarding clients interests
The Law Society and the Land Registry have recently published a joint practice note regarding joint property ownership at a time when property disputes between unmarried cohabitees are an increasing risk.
With many First Time buyers coming to rely on ‘the bank of mum and dad’ to take their first step on the property ladder and younger homeowners choosing to purchase property with a partner or friends to share the financial burden, property ownership nowadays presents a more complex picture.
‘We see this situation from another angle’ commented Eddie Goldsmith, one of the UK’s leading property solicitors and Senior Partner at Goldsmith Williams ‘recent cases and this joint practice note all highlight the importance of joint property owners properly defining and documenting their respective interests in their property.
Joint Tenants have an equal share in the property and, upon the death of one their share would automatically pass to the remaining owner(s). Tenants in Common can have an equal or unequal share in the property and can leave their share to whomsoever they choose either during their lifetime or under their will. Many clients, particularly young people, aren’t aware of this distinction and, when they are purchasing property, they don’t give much thought to what might happen to their property if they were to break up. Indeed many unmarried couples believe that they are protected by common law and enjoy rights as if they were a wife or husband. This is not the case.
Whilst the Land Registry has now developed Form JO to help conveyancers to arrange for joint purchasers to make a declaration of trust some of the recent case law raises issues that go beyond the use of Form JO. In my practice we routinely offer all clients the opportunity to draw up a Declaration of Trust and also to consider drafting a Will.
The Declaration of Trust records important rights and obligations and with this in place clients can avoid disputes, becoming involved in litigation or indeed the possibility that the court will divide the property in a way that one of the parties considers inequitable. Currently the take up on this is disappointingly low – meaning that many clients are left without adequate protection for their interests in the property. I would like to call upon all Mortgage Brokers to play their part in working with us to educate clients on the importance of this issue so client needs are fully met and their interests safeguarded.’
Content correct at time of publication