ver the past few months we have been looking at various issues surrounding cohabitation. The statistics around this area speak for themselves; more and more couples are choosing to live together either as a pre-cursor, or simply a long term alternative to marriage.
But what happens to a property when partners separate?
The law surrounding this area is complex and takes into account various considerations, including how the property was initially purchased and by whom, the parties’ financial contributions to both the purchase price and any mortgage, and other circumstances that may be deemed relevant by a judge considering the case.
If one person owned the property prior to the other moving in with them, there is a chance that it will be deemed to remain the asset of the original owner. However, again much will depend on the particular circumstances of the former couple – their financial contributions (including paying for any maintenance or improvements), and even any promises or assurances given by one party to the other as to ownership of the property during the course of the relationship.
If the property was purchased together, with the owners as ‘joint tenants’, the starting point for any negotiations in the eyes of the law will be that each party is entitled to a 50% share upon the sale of the property. It’s worthwhile noting that on the death of a co-joint tenant, the share of the property passes automatically to any surviving owner – regardless of any alternative wishes set out in a Will.
If purchased as ‘tenants in common’, there is more flexibility in terms of ownership to reflect each parties’ contributions towards the deposit (in particular) but also the on going mortgage payments, if relevant. Property shares held in this way can also pass under a valid Will.
How to protect yourself as a cohabitee
There are things that cohabitees can do to seek to protect their interests. Purchasing as ‘tenants in common’, and having your solicitor draw up a declaration of trust at that point would be a sensible first step, along with updating or creating a Will which includes provision for the property upon death. A deed or declaration of trust is a legally binding document which outlines the detail of the property ownership, clarifying the percentage each party owns.
If you moved into your partner’s house and have been contributing towards the mortgage, on going repairs or if you have paid for any renovations, it may be worth broaching the subject of having the deeds altered to reflect your potential status as a registered legal owner of the property. It’s also worthwhile suggesting formalising any promises or assurances your partner has made around ensuring you are ‘looked after’ with regards to your home if anything should happen to them in the future.
One such way to protect or clarify your interests in this way would be to enter into a cohabitation agreement (which would protect your interests as the owner of the property) or a declaration of trust (which would protect your interests as the occupier of a property in someone else’s name). Such agreements can be drafted by collaborative family lawyers, ensuring that both party’s intentions regarding ownership are accurately reflected.