Why the money can disappear
Once you've agreed your shares, spending money on the home doesn't change them unless your agreement says so. A £40,000 extension paid for by one of you may add value to the home, but that value is shared in the proportions you already agreed. The person who paid can end up getting back only part of what they spent.
Agree it before work starts
The fairest approach is to agree three things in writing before anything is spent:
- what the work is
- roughly what it will cost
- how the money comes back to whoever pays
A common rule is that half the cost of agreed work is owed to the one who paid, capped at half the agreed estimate. That protects the payer without letting a project grow without limit. Our declaration of trust includes a clause that works this way.
Repairs aren't improvements
A new boiler when the old one breaks, or fixing a leaking roof, is a repair. Most declarations treat repairs as a shared running cost, like the mortgage. Improvements are things you choose to do that add something: an extension, a loft conversion, a new kitchen.
Your own labour
If you spend weekends doing the work yourself, it's very hard to put a value on it later. If it matters to you, agree a figure in writing at the time.
Big projects
For something like a large extension, it's often cleaner to sign a new declaration of trust once the work is done, recording the new contributions and shares.