I bought a property with a friend – how should we split ownership? | Mortgages

Q In May 2018, I bought a property with a friend. His deposit was larger than mine although we split the mortgage equally. In the deed of trust that we signed we agreed a breakdown of ownership between us of 56% (him) and 44% (me) to reflect the uneven deposits.

A year ago we had a bathroom renovation which I paid for with the agreement that we would change the percentage of ownership. Now that it’s complete we can’t work out a fair way to calculate what the new breakdown should be. Can you help?

A I don’t think I can because I don’t think that paying for a bathroom renovation changes the ownership breakdown. If you had paid for an extension to be built or had a loft conversion done, it would make a difference. According to Andrew Boast, the co-founder of the house-moving experts SAM Conveyancing, “more living space, more value”. “Replacing a kitchen or bathroom,” says Boast, “doesn’t increase current market value” but it does improve saleability of a property and increases the chances that “full asking price is achieved”.

That is not to say that your contribution to the property should not be taken account of. However, in order to do that it may involve revoking (to use a technical term) your current fixed deed of trust and replacing it with a floating deed of trust, also known as a commensurate share deed. A floating deed, says Boast, “provides joint owners of property a more accurate way to assess the beneficial interest in a property – the money you individually own – at a specific point in time based on your contributions towards the property”.

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