Mr and Mrs X were long-standing clients of the firm and introduced their daughter, Victoria to us when she wanted to buy her first flat.Victoria had an interesting but low paid job in a creative industry so mum and dad were resigned to the fact that they would have to pay her deposit to help her get a foot on the housing ladder.They took advice from Berwins’ Life team on whether their contribution to Victoria’s flat should be a gift or a loan and how they should deal with the gift in their Wills as they wanted to be even-handed between Victoria and her sister.
They agreed the contribution was to be a gift, not a loan, and that they were not looking for an equitable share in the property so would not require Victoria to enter in to a declaration of trust. We told them they may wish to take independent legal advice on this point but they were happy to proceed without it.
We advised Victoria to make sure her mortgage lender was aware of her parents’ input as they would require further information about this to ensure that Victoria was not over-stretching herself financially by taking on what was in fact another loan, and to ensure that Mr and Mrs X would not acquire a legal interest in the property that could affect their position as mortgagee.Mr and Mrs X were able to satisfy the lender and the transaction progressed.
Victoria then mentioned that her boyfriend would be living at the property although they had both agreed he would have no financial or proprietary interest in the flat.We therefore drew up a deed confirming this for Victoria’s protection and Victoria’s mortgage lender instructed us to ensure that he signed a similar document waiving the same rights in favour of the lender’s mortgage. He was separately advised on this.
The flat purchase was successfully completed.