This is essentially a contract between you and your partner which sets out how the house, and any other assets, should be divided in the event of a separation and, in some circumstances, upon death. This is particularly helpful where the parties have made unequal contributions to the cost of purchasing a property but wish to take title in equal shares.  In the absence of a Minute of Agreement, the sale proceeds of any joint property are likely to be split equally between the parties.

If you are buying a property jointly with another party and one party is contributing more than the other or one party is paying a greater portion of the mortgage etc then it is essential that the position is recorded and a formula is put in place to regulate who gets what in the event of the parties going their separate ways or in the event of the sale of the property.

We recommend that a Co-Purchase Agreement is prepared which provides that each party’s investment in the property is ring fenced.   On the sale of the property ultimately each party receives a return on their investment which relates to the growth and value of the property. To give an extreme example, if the property doubled in value then each party would get back double their initial investment. In addition, the mortgage has made its own profit and the party who has been paying the mortgage would be entitled to the profit made by the mortgage part of the investment.   

For more information on Co-Purchase Agreement contact Steve Spence:

Telephone:  0131 316 4444

E Mail: stevespence@neilsons.co.uk