Buying a home with other people
This content applies to Scotland only.
Housing laws vary between Scotland and England. Get advice relating to England
If you are buying a home with other people, for example a partner, friend or family member, you need to decide who will be the legal owner(s) and what financial share each of you will have in the property. If you don't do this, it may be difficult to agree what you are each entitled to if you later want to sell the property, or if your relationship breaks down.
Everyone's situation is different, so get advice on your options from a solicitor before you go ahead with buying a home.
What do I need to think about beforehand?
Buying a home with someone is a big step to take. There are several advantages, for example:
- it allows you to get a foot on the property ladder if you can't afford to buy a home on your own
- it means you can share the other expenses of running a home, such as council tax, bills and any repairs or improvements.
However, there are also disadvantages you need to consider and prepare for:
- What happens if one of the owners wants to move out? Will you be able to buy them out and shoulder all the additional costs such as council tax and bills?
- What happens if one of the owners can no longer afford to pay their way, for example if they fall ill or lose their job? If you have a joint mortgage, you'll still be legally responsible for paying the whole mortgage so you'll have to make sure that you can afford this.
- What happens if you buy a home with your partner and your relationship then breaks down?
- If you're buying with a friend, what happens if you fall out?
You should also think about what you would want to happen to your share of the house if you died. Who would you want to leave it to? There are several ways of making sure that your share will go where you want it to. You'll also need to think about what would happen to the other owner(s) shares if they died. You can find more information, and links to other relevant sections, further down this page in our section on survivorship clauses.
Who will own the home?
The owner of a property is the person whose name is on the title deeds. Title deeds are either registered in the Land Register or recorded in the General Register of Sasines. These registers contain information about the ownership of all land in Scotland. If you don't have a mortgage, the person whose name is on the title deeds doesn't necessarily need to be the person who has paid for the home - for example, if a relative has bought your home for you, but wants you to be the legal owner.
You can decide that there will be only one legal owner, or that you will share ownership between you. You can have as many joint owners as you want, although you may find it hard to get a joint mortgage for more than four people. If you are a joint owner no-one else can:
- rent out the property without your consent or a court order
- force you to leave unless they get a court order
- sell the property without getting your agreement or a court order
- take out a loan against the property (for example, a second mortgage) without your agreement.
If you own the property jointly, you will also need to decide whether or not to have a survivorship clause or 'destination' .
What is a survivorship clause?
A survivorship clause (also called a 'survivorship destination') affects what happens to the shares in the property if any of the joint owners die. It is a formal legal clause that can go into the deed in your joint names when you buy a house. If there is a survivorship clause, your share in the home will pass automatically to the other joint owner(s) if you die. Having a survivorship clause also means that you won't be able to leave your share of the house to anyone else in your will. If you don't have a survivorship clause, you can leave your share of the house to anyone you choose in your will.
It's up to you and the other owner to decide whether or not you want to have a survivorship clause in the deeds to your house, and your decision will depend very much on your personal circumstances. Sometimes people decide to put a survivorship clause in their deeds for tax reasons. Discuss the options with your solicitor before you decide. They will be able to explain in more detail how survivorship clauses work.
Should I make a will?
Irrespective of whether or not you decide to have a survivorship clause in your deeds, you should think about leaving a will. It's always worth making a will, even if you think you have nothing worth leaving to anyone. However, once you own your own home, it's even more important. Read our page on making a will to find out more.
If you live with the home owner but you don't actually own a share of the property yourself, there are lots of things that could affect you if the owner dies. Have a look at our section on death in the household for more information.
How much of the property will I own?
Being joint owners doesn't necessarily mean that you each have equal shares in the property. The share you are entitled to will depend on any agreement you made when you bought the property.
You may decide that one owner should have a bigger financial share if, for example:
- they are going to pay the deposit for the home
- they are going to pay more of the mortgage
- they are going to pay for improvements or repairs to be carried out.
Speak to your solicitor about this when you are preparing to buy the property. They can:
- give you legal advice about your options and explain the practical implications of what you decide to do
- make sure the title deeds state how your shares are divided up.
This may help to settle any later disagreements about what you are entitled to if your relationship breaks down or you decide to sell the home. Verbal agreements can be legally binding, but are difficult to prove.
You may have certain rights to the property even if your name is not on the title deeds. You won't have ownership rights but you may have occupancy rights or rights under a will if the owner dies. This can all be very complicated and depends on several factors so you should get advice from a solicitor on your particular circumstances.
Who is responsible for paying for the upkeep of the home?
If you own your home with other people, all the owners are jointly and severally (individually) liable for all the expenses to do with the property, for example, council tax, repairs and any improvements you've all agreed on.
What about the mortgage?
Most people who own their home together also have a joint mortgage. There are many mortgages on offer and you should shop around for a deal to suit you before you decide on one product. You don't have to get a mortgage from the bank or building society you're already with, although you can do this if it suits you best.
If you and your co-owners have a joint mortgage, you'll all be responsible for the monthly payments, even if one of you has moved out or can't pay their share any more (for example. because they've lost their job or fallen ill). This means that your lender will expect you to keep paying all the repayments even if the other joint owner(s) stop paying. If the payments aren't made, your home could be repossessed and sold to pay off your mortgage.
You could think about taking out insurance to cover your mortgage in case anything goes wrong. This can be expensive, however, so make sure you get independent advice from a qualified financial adviser before you make any decisions. Discuss all the possibilities with the other owners to find out what'll suit you best.
If you're worried about mortgage payments, talk to an adviser at a money advice centre immediately. An adviser can help you work out your options and/or negotiate with your lender.
If the joint ownership arrangement ends, you will have to make changes to your mortgage as well. Until you do so, all the joint owners will still be liable to repay the mortgage debt. You, your mortgage lender and the other owners will all have to agree to any changes in advance. Our section on mortgages has more information on joint mortgages and how to change them.
What if we want to end the joint ownership arrangement?
If you want to end the joint ownership arrangement, for example, because you and your partner are splitting up or one of the joint owners wants to move out or sell the house, your rights will depend on what the title deeds say and what agreement you can reach with the other joint owners.
What are our options?
Depending on your circumstances, you may decide to:
- buy the other owner's share
- sell their share to a new joint owner
- sell the home and split the proceeds.
Making a formal agreement
Once you've reached an agreement about what to do, you might want to get another formal legal agreement drawn up to reflect this. If you're separating from your partner, the agreement is called a 'separation agreement' and can be used to sort out all sorts of important issues such as:
- who'll pay off any joint debts
- pension entitlement
- what will happen to your home.
If you're not in a relationship with the other joint owners, you could consider having a 'Minute of Agreement' drawn up by a solicitor if things are complicated. In most cases, though, you'll probably be able to agree what's going to happen between yourselves.
Get independent legal advice from a solicitor if you're in either of these situations.
What if I want to buy or sell a share in a home?
If you own your home jointly with someone else, you may wish to buy out the other owner at some point, or to sell your share. In this case, you'll need to get the property valued, to find out how much your share is worth. You may wish to get more than one valuation, to ensure you get a fair price. You then need to agree on a selling price with the new joint owner.
Once you've arranged the mortgage (see below) you'll need to instruct your solicitor to carry out the necessary conveyancing work to finalise the sale and change the names on the title deeds.
What about the mortgage?
If you have a joint mortgage, you'll need to get your mortgage lender's permission to change the ownership of the home:
- If you need to move a joint mortgage solely into your name, the mortgage lender will need to be satisfied that you'll be able to pay the mortgage on your own. For example, you may run into problems if you don't have a regular income, if you're income isn't high enough to cover the payments, or if you're on benefits.
- If you want to add a new owner to an existing mortgage or switch to a new joint mortgage, your lender will need to be satisfied that the new owner will be able to make the payments. For example, you may have problems if they have a bad credit rating, or a history of mortgage arrears in the past. Bear in mind that if you switch to a new mortgage, you may have to pay large redemption fees for ending your previous agreement.
If you have problems dealing with your mortgage lender, talk to an adviser at a money advice centre.