Ask the expert: Our son wants to put his girlfriend on the deeds and mortgage, but what if they break up?

Our property finance expert answers your questions

‘Putting’ someone on a mortgage is not an easy process at all and indeed not one which banks routinely permit. Stock image

Sinead Ryan

July 22 2022 07:13 AM

Our eldest son, who is almost 40, bought a house three years ago as sole owner, paying the mortgage himself. He met a girl 12 months ago and they are talking about getting married next year. They intend putting her name on the deeds and mortgage now. We like her and are happy for him but are wondering if this is an easy process or expensive? And what are the implications if they break up before the wedding?

Sinead replies: I I can hear your concerns for your son, but would preface any answer by suggesting that whatever decisions he makes they are, of course, his own.

‘Putting’ someone on a mortgage is not an easy process at all and indeed not one which banks routinely permit, so your son may well encounter an early hurdle. If a house is to be jointly owned, then this is essentially considered a new contract.

That means your son’s girlfriend will be technically applying for a new mortgage with him, with the financial scrutiny that it involves. The expense therefore is incurred in time and legal fees, and the necessary checks and balances of any loan application.

In terms of the legal advice around the plan, William Tilley, senior associate at Ivor Fitzpatrick & Co Solicitors says he would hesitate adding anybody to the deeds of a home after such a short relationship. “When a couple cohabit and their relationship breaks down, the home effectively vests in the person who holds the legal title to the property,” he says.

“With regard to having his girlfriend added to the deeds, if they broke up before the wedding, as they would have been cohabiting, the home would be considered to be owned by both parties, jointly. Both your son and his partner would have to make decisions jointly as to what happens to the property. In the event that they cannot come to an agreement, an application can be made to court to have the property sold and proceeds divided.

“Alternatively, depending on the nature of the property, a court order can be obtained in order to break up the property. This would enable each party to decide what to do with their portion. This would not be uncommon in circumstances where there is land connected to the home. Another thing to be mindful of is the ‘Civil Partnership and Certain Rights and Obligations of Cohabitants Act (2010)’. A solicitor would be able to advise on this in more depth, as under this legislation redress is available in the courts for cohabiting couples once they meet certain thresholds regarding length of time together, whether they have children, etc. It may not apply at this moment in time.”

Independent legal advice is a must here.

I have the opportunity to purchase a property owned by my late aunt. It is in Laois, and in very poor condition. The reason I didn’t buy it when she died in 2019, when it was made available to me by her family, was because I couldn’t afford to do it up, and then Covid hit. I can potentially move in there as my company is permitting me to permanently work from home and I am interested in this new grant scheme but don’t know if I’m eligible for it. Can you tell me what it involves?

Sinead replies: The Croí Cónaithe (Towns) Fund Scheme is available for first-time buyers, with mortgage approval, to purchase a derelict or vacant property and turn it into a home without requiring planning permission and with grant aid of up to €50,000.

I can’t tell if you qualify, but based on that alone, you’ll probably know immediately whether or not it’s worth looking into.

Rob Flynn of Bonkers.ie says the scheme is aimed at repurposing old buildings, and helping with the housing crisis. The grant is capped at €30,000 if you’re simply refurbishing a vacant property (commercial or residential), and an additional €20,000 where the property is structurally unsound or dangerous.

You’ll need to prove it for the extras, with an independent report from a quantity surveyor or engineer. The grant must include VAT and in general the house must be pre-1993 and have been vacant for at least two years, so in fact your enforced delay may work in your favour.

In the details, the plan says if you’re not a first-time buyer you can also qualify under the ‘Fresh Start’ principle. This is generally for people divorced or involved with the insolvency process, with no interest in another property.

However, the real issue for you may be the mortgage application. Mr Flynn says that many lenders steer clear of ‘projects’, and don’t, as a rule, like mortgages on poor-quality properties. “It’s important to remember that you’ll be underwritten twice in the mortgage approval process — firstly on your income and secondly on the property you’re looking at purchasing”.

It’s not for everyone, so do careful research before you commit. If you think you can afford it, qualify for the grant and get mortgage approval, it’s a super idea. Getting contractors may be a different matter!

Email your questions to siryan@independent.ie