Question:
My boyfriend and I jointly purchased the place we were living in. The relationship later dissolved and I moved out. He is still living there and pays a little extra towards the bond. I pay one-third of the bond. He claims that when we finally sell he will be entitled to more than half of the sale. Is this true, and how can I protect myself?

Answer:
It can be very difficult to divide up the assets where there is no legal understanding between the partners.

If your boyfriend has been living in the place while you have not, I would suggest that some of his contribution should be regarded as rent. Although he is not a tenant, but part-owner of the property, he is occupying the premises at the moment, and until he does move out you will not be able to let out the property. So I would suggest you regard that as an opportunity cost, and it is only fair that he does pay extra towards the bond considering he has the use of the property and you don't, and is preventing you from earning extra income from it.

However, if he has paid more towards the bond from the very beginning, when you were both living there, in all fairness he may be entitled to more from the sale of the house or flat. You will need to add up the respective amounts you have paid in, the cost of the property, and the bond amount in order to work out what each of you have contributed and should be entitled to.

Settle amicably

Your main problem, however, is that in the absence of any written agreement between you it becomes difficult to work out ownership. It will be in both your interests if you are able to settle the issue amicably between you. You do have the option of going to court, provided you found a lawyer who argued that you have rights as a common-law spouse. However, the law in this regard is still unclear and, even if you were vindicated, you would still have costly lawyers' fees to pay.

I would also suggest that, if the two of you remain on good terms, it may be in your interest to hold on to the property and let it out for a few years. When you sell and buy another property, you will have agent's commission, transfer costs and bond registration costs to consider, which can all be very costly. If you give the present property time to appreciate, remembering that the market is starting to level off, you may find that you gain more in the end.

But if you go for this option, I would strongly suggest that the two of you draw up a contract to govern your investment partnership. This will ensure that both of you understand the terms and obligations of the arrangement and prevent the partnership from turning sour.


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