With high mortgage interest rates affecting affordability, it is no surprise that more and more couples are buying a house together in a bid to get themselves on to the property ladder.
But, what happens to a property owned by a cohabiting couple if that relationship breaks down? And in a common scenario where homeowners have received financial assistance from parents or family members, what effect does that have on ownership rights?
Joint Ownership
Since July 1998 when purchasing a property, the legal documents (Transfer Deed) has contained an agreement about ownership shares. This will be one of the following:
(i) Joint tenants – there is a presumption here that the owners will hold equal shares.
(ii) Tenants in common – this can either specify that the shares are equal or unequal however, in this case should one party die their share will not automatically pass to the other owner.
If unequal shares are not recorded, then the onus is on the person wanting a bigger share to prove that this should be the case.
Sole Ownership
In cases where a couple live together but the property is owned in the sole name of one party, the non-owner must show that there was an agreement that the non-owner would be entitled to a share and that the non-owner relied on the agreement to their detriment. This could be by paying for home improvements, helping with the initial purchase or even physical labour.
Whether a couple are intending to purchase jointly due to the current climate or in the name of one party for a particular reason, it would be sensible to have a document drawn up reflecting any agreement, known as a Cohabitation or Living Together Agreement, at that time. Such an agreement will not only deal with property shares but can also provide clarity for other matters such as who will pay what towards household bills and which contents belong to whom.
Cohabitation law reform
Due to the uncertainties faced by unmarried couples who are separating, Resolution, an organisation for family lawyers, is calling on its members to help shape the future of family law particularly cohabitation law reform.
How can Tozers help?
Tozers can provide expert legal advice and assistance in creating a Cohabitation or Living Together Agreement. Our experience family lawyers understand the importance of protecting the rights and interests of unmarried couples, and we can guide you through the process with ease.
