If partner is living in my house - Legal Question

Hi,

I've just purchased a home recently on my own, once the house is built (next four months), i'll be moving in there with her.

What are the laws around asset protection? I've heard of people "double mortgaging" their home, where they chew into any equity and purchase more houses with it..

Example:

300k PPOR loan
400k property value

Draw down on 100k equity and invest this in purchasing another house.

If a split ever occurred between the partner and yourself you would sell the property and repay the mortgage and essentially have nothing left to disperse? or is all this irrelevant and they have claim to half your assets regardless?

 

No expert here, but I do think they have potential to claim half of your assets regardless. Pinging @Terry_w

 

But there isnt 100k to be drawn down here anyway. Even at 90% LVR (which is less common on topups these days), there'd be 60k at best. So there'd still be 40K left in the property to be disbursed if the property was sold using those numbers.

As to your other question regarding partner, best to seek legal advice on what constitutes a defacto these days. At one point it was 2 years together but I think it may kick in sooner if living together like a couple.

 

Maybe consider getting a pre-nup. Otherwise partner may get half or more depending on many factors.

If you're thinking this way, maybe you shouldn't be moving in together?

 

Potentially more than half.

 

Half is often a very good outcome if you have greater earnings (or capacity) than your spouse.

If you are not defacto yet (in the eyes of the law) then maybe, but given that you refer to them as your partner........

 

Just an idea.

Build a granny flat and lease it to her through a 'licence to occupy' with no bond etc. Just an agreement to rent the granny flat for a nomnal amount ...say $30 per week . Do this for a few years until you decide to marry her or split up.

If there's ever a defacto claim you can legitimately say she rents the granny flat but sleeps at your place alot.

Maybe this gives some protection...I'm not sure.

 

If you need to ask the above questions it might make sense to delay the moving in together?

 

EN710...your answer makes no sense to me. The original poster is only doing what everyone (almost) does now. Trying out living together for a period of time to see how things go.
If they go well then all is ok. If not why should he give her half his assets after 2years or maybe less.
His is a conundrum most young people and not so young people are facing today.

 

@seven everyone to their own. I'm in the believe that if you can't talk about asset division seriously with your partner now, it might not be the right time to move in together. If the relationship has no trust, do you really want to live together with all the potential risk? That's my view anyway. From I gather there is not much you can protect from family court.

 

EN710.
You made no earlier comment re talking about asset division earlier.
This very much needs to be done before they co habitate..or make an agreement to live next door to each other so that(hopefully) the Family Court has no grounds to buy into their situation...what ever it turns out to be.
Most non marriage relationships end at some stage in my experience .

 

Are you expecting your partner to contribute to the mortgage?

Are you expecting them to contribute to upkeep - e.g. Painting, mowing the lawn, gardening?

 

I noticed this from the OP in an earlier thread:
'So about a year ago I purchased a house and land package close to Melbourne, the house is 3 bedrooms, 25km from the CBD ...
Once it is built (Should be about 6 months from being finished) I'm basically going to move in there with my girlfriend and she will most likely rent from me.

The loan is interest & principal (30 year term) and the repayments on it (once i've deducted the girlfriends rent paid to me) are roughly the same as what i would be paying renting somewhere in a similar location.'

So the OP is going to rent a room to his girlfriend...

 

If "you" get her pregnant ALL BETS ARE OFF
Seriously though, I have seen this happen several times to friends, both female and male, one has all the assets, the other a suitcase
And 3-6 months later "when it doesn't work" the suitcase holder seems to think they have a 50% entitlement (or more).
Only winners are the paper shuffling law institutions
I understand that the asset poor need looking after, that they may not have the earning capacity, BUT, itis often by their choice
My friends ex spent her settlement on overseas holidays , then cried poor again (and is still under his roof for his kids sakes)
Whole lot of wrong with the system.......

 

Thanks everyone for the help/advice. I'm almost certain she'd never attempt to do something like that, regardless of the circumstances. However, I think it's still important to look at options to minimise risk. Thanks again

 

to minimise risk minimise her contribution to the property - both financial and non-financial. Don't let her mow the grass, paint the walls, deal with agents on your behalf etc.

With family law property settlements the courts look at the contributions the parties made to the property so this should help, a bit.

 

Still going to cost a bomb in legal fees if things go south. You'll likely end up settling when you do the numbers. See where this is going? Of course I may be biased. Been there done that... twice!

Good luck whatever your decision.

 

Only if litigated.

If you keep things separate perhaps there is a (slim) chance the other party may see they haven't any entitlements

 

Agreed. But may have better luck on the pokies.

The greater shame is the general difficulty in protecting oneself. Seems so difficult quantifying (especially legally) both parties contributions.