There is no official legal definition of ‘cohabiting’. It generally means to live together as a couple without being married or in a civil partnership. Many couples buy a property together before getting married or entering into a civil partnership – cohabitation is on the rise. It is vital you understand at an early stage your legal rights in this situation and that you have adequate plans and protections in place, particularly before buying a house together. You should discuss with your partner both financial considerations and possible challenges you may face in the future. There is no such thing as a ‘common law marriage’ and living together for a long period of time does not mean that you each have the same rights as a married couple or those in a civil partnership.
There are several different ways in which you can own property together and you will need to decide what form of ownership is most suitable for your situation. You may decide to own the property as ‘joint tenants’ which will mean you own the whole property together and will have equal rights to the entire property. Where one partner has put significantly more money into the property this could mean they potentially lose out if the relationship ends in the future. If one partner dies, the other automatically inherits the property with this type of ownership and this cannot be changed in your will.
Alternatively, you may decide to own the property as ‘tenants in common’ where you each own a ‘share’ in the property. You may decide to split ownership equally or one of you may own a larger share than the other. This might be agreed if one party is to pay more of the deposit for purchase of the property or more of the mortgage. There may also be other factors you want to consider for example if you have children together or if one of you pays the mortgage and the other pays all household expenditure for example. With this basis of ownership if you split up you will each be entitled to your own share in the property. If one partner dies, the other will not automatically inherit their share in the property, unless they have left it this way in their will.
When considering how to buy and own a property together it is always wise to consider what you would want to happen in the event your relationship breaks down and the property needs to be sold. In simple cases, it may be suitable to have a ‘Declaration of Trust’ stating how you own the home and the percentages. In more complex situations, you may wish to make a ‘cohabitation agreement’ to protect your interests and to set out your intentions to avoid potential issues in the future. Such agreements should be reviewed if children are born or there is a change in one of the parties financial circumstances. Additionally, for older couples, there will other issues to factor in such as any inheritance planning.
It is critical you discuss matters with your partner at a very early stage, consider how and on what basis you will own a property and decide what arrangements will best suit and reflect your circumstances. If you are unsure of your rights and would like some further advice prior to purchasing a property together a member of our family law team would be able to advise you further. With some uncertainly in this area of the law for cohabiting couples it is hoped in the future the Government will introduce a Cohabitation Rights Act although this is not likely to happen anytime soon.
For more information and to find out how we can help you, please contact us on 0345 646 0406 or fill in our online enquiry form and a member of the team will be in touch.