Fair removal with long-term security

Hello dear forum community,

my partner and I want to renovate a house next year.
We already have a loan of €180,000 and we will jointly pay a monthly instalment of €1,000. My question is therefore not about evaluating financing options.
I will try to briefly describe our situation:

The house we are going to renovate is my parents' house. Therefore, on paper it belongs exclusively to me. Since my partner is now investing a lot of money in it, understandably he wants some security in case of a breakup. We are therefore looking for a fair arrangement for the event of a separation.
For example, if we separate after 10 or 20 years, my partner should of course not be left with nothing. Is there a fair arrangement in which we can agree on how much he would be entitled to and when? It does not seem realistic to me to pay back the entire amount he invested in case of a separation, after all we would have already "lived together" for several years. If somehow possible, we are looking for a solution that would allow me to keep the house alone in case of a separation. We want to avoid the alternative "register the house in the land register in both names and in case of separation simply sell it and each get half".
Of course, we do not intend to separate, but I want to cover all eventualities so that in case of emergency there is no "war of the roses".

Does anyone have experience with such a situation?
I would be very happy about tips!

Thank you very much in advance.

Best regards
Mo

Good morning!

First of all, congratulations on deciding that you are already dealing with this topic. :)

One approach would be to consider how much you are willing to spend on rent. If each of you makes a €500 loan payment, but you would only want to pay €400 per person for rent, I would consider it fair to reimburse the "excess" €100 per month in case of a separation. (Whether it's €100, €150, or just €50, you have to negotiate that.)

If you are already discussing money, you should also think about who should inherit in case of your death (and draft a corresponding will). If that should not be your partner, he probably shouldn't sign the loan agreement with you – in my opinion, otherwise he would have to repay the loan if your heirs are not able to, even though he no longer has anything from the house. Ask generally whether he could get out of the contract if you separate, or if he would continue to be jointly liable.

Furthermore, you should consider how to deal with loss of income (e.g., with children) if you can no longer contribute the full €500 and he would have to pay more.

For my part, by the way, I will solve all the legal matters in such a way that my boyfriend alone signs the loan agreement with the bank and we set up contracts regarding my participation in the monthly installment or the equity that I contribute.

Hello Maria16,

thank you very much for the quick response.

There is already a will and my partner is also registered there as the sole heir.

Regarding the loan agreement, we did something similar to what you did. The contract is solely in my name and we want to draw up additional agreements regarding my boyfriend's involvement. Unfortunately, we are unsure about this content. May I ask how you arranged it?
You also contribute with a monthly payment or equity to the repayment. How did you agree on what would be owed to you in the event of your separation?

Many thanks for a tip.

Best regards
Mo

Assumptions:
- You are the sole owner of the house.
- You live in the house.
- There are no other residents.

The partner contributes to the renovation of the house through his share of interest and repayment. Possibly also through cash and "muscle mortgage". The right of residence in your house can be offset against this.

What cold rent would you have to pay for a comparable property? Half of this rent would be a fair contribution that he permanently makes without acquiring further claims. If he contributes more, this can possibly be offset against other ongoing costs (additional costs, living expenses).

Other interesting aspects:
What is the income distribution? Do you have children, are any planned, will this affect the income distribution?

Hello Bieber,

your assumptions are correct. I am the sole owner, we live in the house together, and there are no other residents.
The income distribution has been balanced so far, so we could currently pay the same share toward the repayment. However, a child is planned in about the next 3-4 years, during which I would earn only half of my current income for several years.

It is unfortunately very difficult to name a cold rent for a comparable property. The house has a living area of about 280sqm, and the plot size is 1200sqm. The rent for a comparable property would therefore already exceed the €1000 repayment we want to pay monthly. The additional costs for the entire house and property will amount to about another €1000 per month. Of course, I am aware that this house is actually too large for two people at present, and we would certainly never have designed a new building to be this large, but since it is my parents' house, we would like to keep it. Fortunately, we will not overextend ourselves financially with the fixed costs, but of course we still want to find a fair distribution and arrangement.

Best regards
Mo

Google for templates for (interest-free) loans, which we will use as a reference for my equity contribution.

We will arrange the monthly installment separately and are currently discussing it.

You surely understand that I do not want to provide concrete numbers; that would not help you much anyway, as everyone has to find their own personal "pain threshold" up to which they are willing to pay some kind of rent.

Oh yes, just to clarify: in the end (as of today, unmarried, childless) I have no right of residence or anything similar, I also do not want to take any furniture I paid for with me (which probably would not fit in a small apartment anyway), but it will probably come down to a one-time payment to me.