All Topics / Legal & Accounting / How to protect PPOR from renting defacto in case of break up ?

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  • Profile photo of Rowan MCcoleRowan MCcole
    Member
    @rowan-mccole
    Join Date: 2010
    Post Count: 7

    Hi everyone.

    Apologies if this has been covered a million times before, but i couldn't find any helpful information using the search tool.

    I'm posting on behalf of a mate of mine who has just bought his first house. He is living in it with his girlfriend of 6 months who lived together with another couple in their last rental. The house is solely in his name and the deposit is %100 his. She's paying $100 a week in rent and hes made clear that the payment is for rent just like any other friend and not a mortgage contribution ( which is how i personally believe it should be, having a girlfriend should not cost you money every week )

    He wants to know if theres any way to protect himself from claiming any part of the house if they break up. Shes not the sort of person that would claim something that's not hers, but if she did her dads a lawyer so my friend is kind of screwed.

    The other concern Is he even allowed to charge his girlfriend rent without risking losing his first home owners grant ?

    I would much appreciate any advice.

    Thanks

    Profile photo of Rowan MCcoleRowan MCcole
    Member
    @rowan-mccole
    Join Date: 2010
    Post Count: 7

    If she were to sign a document that stated that although they were living together in a relationship, they are %100 financially independent and not entitled to any capital gains on the house, would that stand up in court ? Can a lawyer draw something up like that ?

    Profile photo of RPIRPI
    Participant
    @rpi
    Join Date: 2012
    Post Count: 308

    The document is called a Binding Financial Agreement.  It is complex and must be done very carefully also the other party must get independent legal advice.

    RPI | Certus Legal Group / PRO Town Planners
    http://www.certuslegal.com.au
    Email Me | Phone Me

    Property Lawyer & Town Planner

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Yes, BFA is really the only way to protect. Costs a fortune because of the risks involved. $2k to $5k for a simple one. These can be done pre/during/post a relationship so it is not too late.

    Just because she is 'renting' this doesn't mean she cannot claim. Probably has no effect if she is in a relationship with your mate.

    Of course the other option is to break up before 12 months…

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of god_of_moneygod_of_money
    Participant
    @god_of_money
    Join Date: 2008
    Post Count: 970

    or not living together before 365 days

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