I am in the process of buying a property with a friend.  My parents have agreed to give me the deposit needed for the purchase price.  We are both going to be on the mortgage.  How can we ensure that there are no disputes later about whether we should sell the property and how much each of us should be entitled to?

It is recommended that you and your friend enter into both a Declaration of Trust and a Cohabitation Agreement.

Declaration of Trust: This can record the fact that the one party or the party’s parents have provided the deposit and that such amount must first be repaid from any sale proceeds (the equity) with the balance of the equity to be divided amongst you equally.

It should also include provisions that deal with how and when each of you can request the other to sell the property.

Cohabitation Agreement: This agreement will have similar provisions to those in the Declaration of Trust, but it goes further than simply dealing with the equity in the property. Within such an agreement the following (though not an exclusive list) should be addressed:

Each party agrees what their respective contributions will be to the mortgage repayments, utilities, service charges (if the property is leasehold), insurance, Council Tax etc

Whether the parties must maintain a mortgage protection or a suitable vehicle to ensure the repayment of the policy in case of their inability to work or death

Repayment of mortgage repayments

What happens if one party wishes to move out of the property?  Is that party entitled to rental income from the other?

A solicitor dealing with your conveyancing transaction should be requested to advise you and deal with these agreements before you proceed with the purchase of the property.

One of you may have to take independent legal advice from another solicitor.