If you contribute unequal cash deposits towards the purchase price of your new home you may want to consider protecting your contribution. You can do this by entering into a contracting out agreement (more commonly referred to as ‘a pre-nup’ or ‘pre-nuptial’, even if you are not married).
Through this agreement, couples can stipulate their own rules for the classification and division of their assets in case they separate or one of them dies. Without a binding contracting out agreement, the Property (Relationships) Act 1976 (PRA) will determine how your assets are split if you separate. Under this legislation, the home you live in as a couple is generally deemed to be ‘relationship property’ — meaning it is an asset that is likely to be divided equally between you both, even if one party contributed more towards the purchase.
A contracting out agreement can be entered into at any time. It is recommended, however, that couples enter into a contracting out agreement before they have been in a relationship for three years (which is generally when the equal sharing principles of the PRA apply) or before they purchase their home.
The team at Foundation Legal can help you with relationship property.
