Moving in with your partner may seem like the next stage in your relationship, but if you are unmarried and want to buy a property together you should carefully consider, when buying the property, the ownership implications in case, unfortunately, you later decide to split.
It is a common misconception that if a couple lives together, their relationship is somehow transformed into a ‘common law marriage’ and they gain rights to each other’s property. That is not the case: you can only acquire the same property rights as spouses if you get married or enter into a civil partnership.
So what property rights do you and your partner have if you cohabit but are unmarried? Are there any circumstances where you might be entitled to a share of a property even if you have not contributed towards its purchase? Fiona Yellowlees, Partner in the Family Law Department at WBW Solicitors in Newton Abbot reports.
If you and your unmarried partner jointly buy a property and place it your names, you are both entitled to a share of the property. You can choose to hold the property either as joint tenants or as tenants in common.
If you opt to co-own the property as joint tenants you are entitled to half the sale proceeds; it is irrelevant how much you each contributed to the purchase price or the mortgage repayments unless in some rare circumstances there are later discussions. If you and your partner split up, either one of you can apply to the court for an order for the house to be sold and the proceeds divided equally. If one of you dies, your co-owner becomes the owner of the entire property, even if the terms of your will say otherwise. If there are children living in the property different decisions may be made.
Couples who contribute different amounts to the purchase of a property can choose to ring-fence the amount they have each contributed by holding the property as tenants in common. This gives you and your co-owner ownership of only the share of the property which reflects how much money you each contributed to the purchase.
You can specify the amount of the property owned by each partner and how the property’s value will be divided should you break up in a legal document called a declaration of trust. If one of you dies, the other partner does not automatically become entitled to the whole property; your share will instead be allocated according to the terms of your will or to the intestacy rules if you did not leave a will.
If the property is placed in the sole name of your cohabitee, you have no automatic right to an interest in the property, regardless of how long you and your partner have lived together.
If, however, you have made financial contributions to the property that have improved its value, such as paying for renovations, you may be able to convince the court that you should be entitled to a beneficial interest in the property, as your partner should not be left financially better off at your expense.
The court could declare that a trust has arisen in this scenario. This assumes, based on your financial contribution and the behaviour of you and your partner, that you had a tacit agreement with regard to the property.
The court will not always take this course of action, however, as the case of Dobson v Griffey (2018) illustrated. The court, in this case, refused to recognise an equitable interest for the non-property owning Ms Dobson, despite her claims that there was an express agreement between the couple that they would split the profit or the rise in value equally upon its sale after she oversaw the renovations.
Given that Ms Dobson did not contribute towards the purchase price and that Mr Griffey intended to repay any money that she had made towards the renovations through his company, the court decided that she was not left financially worse off and her case was dismissed.
One way unmarried cohabitants can minimise disputes over their property rights in the event of a split is through the use of a legal document called a cohabitation agreement which sets out their intentions. This is designed to protect the legal rights of unmarried couples and sets out what will happen if they separate.
It is highly advisable that you procure the services of a specialist lawyer to help you draft the terms of such a document to ensure that everything is above board and legal and wholly reflects the wishes of both you and your partner.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.