First home buyer - partner can’t afford

Discussion in 'Legal Issues' started by jinx77, 26th May, 2019.

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  1. jinx77

    jinx77 Well-Known Member

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    I’m a 34 year old woman who’s been renting with my partner of 1 year. I’m currently looking at buying my first property (PPOR). As I’ve saved hard and come into an inheritance, I only need a modest mortgage to pay it off.

    The complication is that my de facto partner who I currently live with doesn’t have money to contribute to a deposit as he earns the minimum wage and has no savings. So if we want to live in the property I buy, he’d have to pay rent.

    What are the legal ramifications of charging my de facto partner rent that will go towards paying off a mortgage that’s in my name? Is it wiser to rent out the property and continue renting with my partner at a seperate address?

    We don’t have any kids or shared assets/accounts, so is it necessary to get a “pre nup” in this case?
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    You really need specialist legal advice from a family lawyer. The only way you could protect 'your' property would be a binding financial agreement, but even then as he is paying for the property he would have an equitable interest in the property.
     
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  3. Joynz

    Joynz Well-Known Member

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    Why charge him rent at all - if he’s your partner and you don’t need the money? Could he contribute in other ways?
     
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  4. dabbler

    dabbler Well-Known Member

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    How would that work, what you gonna do if nothing changes for next 10, 20 or whatever years....
     
  5. Cimbom

    Cimbom Well-Known Member

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    Live separately (remain unmarried) and each pay for your own expenses with no shared finances. I'm not a lawyer but I think as soon as you combine finances and living arrangements, he could make an argument in some way.
     
  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    The family courts will look at the contributions of the parties both financial and non-financial contributions, so if one is paying 'rent' that is a contribution, If he mows the grass that is also a contribution.
     
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  7. The Y-man

    The Y-man Moderator Staff Member

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    If you are even asking this question, I'd say keep renting and buy an investment property in your own name only.

    The Y-man
     
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  8. Cate Bell

    Cate Bell Well-Known Member

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    Sounds like you need to get advice from a family lawyer.
     
  9. The Gambler

    The Gambler Well-Known Member

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    This is interesting. I have a question...
    If he had come into money and bought a place and you both lived in it, do you think he'd charge you rent?

    Perhaps relationship goals need to be taken into account in this situation, not just financial...
     
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  10. jinx77

    jinx77 Well-Known Member

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    If my partner were paying off a mortgage there’s no way in hell I’d expect to live there free of charge while they’re working their ass off to pay for everything. It’s different if someone has already paid off their home but I don’t think it’s fair for one person in the relationship to take on all the financial strain. We’ve already discussed our relationship goals and he’d feel uncomfortable living in a property rent-free. Actually I don’t know anyone who’d be okay with letting their partner pay for everything in a relationship?
     
  11. jinx77

    jinx77 Well-Known Member

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    Because at the moment we split rent 50/50. He doesn’t want to live in a house rent-free while I’m working my ass off to pay off the mortgage. I don’t feel comfortable with that either. Why should all the financial stress be placed onto one person in a relationship? I think each person should contribute what they can financially.
     
  12. Joynz

    Joynz Well-Known Member

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    You said in your original post that you had an inheritance and would not need a big mortgage - it didn’t mention ‘working your ass off’...

    If he is happy to pay and you would have been happy to buy the house together, why not get him to contribute to the mortgage directly rather than pay rent? Unless you feel it’s 50 / 50 or nothing?

    This is the sort of things couples have to negotiate when they have kids or whenever one partner earns less than the other.

    Are you wanting to determine if you can keep him from ever having a financial claim on the house? Or just keep any future claim to the value of the ‘rent’ he paid?
     
    Last edited: 26th May, 2019
  13. jinx77

    jinx77 Well-Known Member

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    Well I think a 200K mortgage is “small” compared to others but would still involve working hard to pay off. I earn lower than the average salary.

    I don’t want to keep him from having a claim over what he contributes. The issue is that, aside from paying all the deposit, I’d ultimately be putting in 85-90% of the repayments. As we’re de facto I’m under the impression that he’d be entitled to half of the house if he contributes to the mortgage at all. I want to protect myself from him claiming half of a property that I put most of the money up for.

    I’m no expert on family law but I’ve read up a bit about it and thought that de facto couples are treated as spouses and can therefore claim 50% of everything regardless of who contributes what.
     
  14. The Gambler

    The Gambler Well-Known Member

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    Perhaps I'm old fashioned. IMO if you're in a long term relationship or marriage or want to be in one, then it doesn't matter what the money split is. You're in it together and both working towards the same financial, relationship and life goals.

    Then again, you don't want to be naive or foolish. I guess it's a very fine line.

    Edit: In reading the OP's latest reply, I'm getting a lot of mixed signals. Does the OP want to be in a relationship or not? It seems the easy financial answer is to be single.
     
    Last edited: 27th May, 2019
  15. thatbum

    thatbum Well-Known Member

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    No its not how it works. There's about 3 things wrong in that sentence alone. Worst myth is this idea of 50%
     
  16. QldKoolies

    QldKoolies Well-Known Member

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    Well, if you get pregnant and have time out of the workforce and then maybe only go back part time I hope you continue to pay for everything 50/50 it’d only be fair right?

    Seriously you need to see a lawyer as previously advised and be open with him and reach an agreement without hiding any intentions.
     
  17. TMNT

    TMNT Well-Known Member

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    I have come to the personal conclusion, that mindsets like yours are not common these days,

    people these days seem to be happy to take take take
    and to not face up to both legal/moral/ethical responsibilites
    and courtesy does not go a long way
     
  18. marmot

    marmot Well-Known Member

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    Maybe just break up with him and get a renter in one of the other rooms.
    Sounds like you want him to contribute to help pay of the mortgage but not be in any position to make a claim.
    To make it bullet proof you could charge him market rent ,give him a receipt every week and then declare the earnings as part of your income and then pay additional tax on the earnings
    If anything was to happen down the road you might be able to prove your partner was just renting, or it might be a complete waste of time.
    At the end of the day Im thinking you dont really consider the relationship a long term deal, yet.
     
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  19. jinx77

    jinx77 Well-Known Member

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    Of course I want to be in a relationship. Being in a committed relationship doesn’t equate to wanting to be screwed over. I’m an independent woman who has worked hard to save up for a good deposit. IMO letting a partner move in with me for free and paying all their bills seems like a recipe for disaster. Relationships should be about equal contribution and each party chipping in what they can. Actually it was his idea to pay rent if I do buy a house. He doesn’t want to live off his girlfriend. What’s wrong with that?
     
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  20. jinx77

    jinx77 Well-Known Member

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    Of course I’d still pay 50/50 if I were pregnant. I’d have maternity leave. My partner doesn’t earn enough to cover my share of things. It’s unfair to expect him to pay for the living expenses of two people on the wage he earns. This is a silly question because as I posted before we’ve already decided not to have kids.

    What intentions am I hiding? I’ve already discussed all these things with my partner in depth. Actually it was his idea initially to pay rent, not mine. I started this post because neither of us know about the legal ramifications and wanted some advice before going to a lawyer, not because I have a hidden agenda from my partner.