All unmarried couples should do this before buying a house together

Fewer couples are getting married before buying a house. Cohabitation is on the rise, particularly among younger people. The latest Office of National Statistics data [2019] show that over two-thirds of people aged 16 to 29 years who were living as a couple, were cohabiting. 

Yet it never ceases to amaze me how many couples enter into committed cohabiting relationships without having any idea as to what their legal rights might be in the event of separation. 

When it comes to cohabitation disputes, 95% of the people who walk through my door are those who have just split up with their partner and want to know “Do I have a share in my partner’s property?” or “Am I entitled to anything?” The harsh reality is that even if you’ve been living in the same house for over twenty years and have raised children together in it, you could potentially leave with nothing unless you’ve put adequate plans and protections in place. 

Many of my clients come to see me with the mistaken impression that they are in a “common-law marriage” simply because they have been living together for a certain period of time. That is simply not the case. The mere fact that you live with your partner does not provide you with any additional legal rights, regardless of how long you have lived together. 

Considering just how potentially unfair the outcome of a failed relationship could be, here is some useful guidance if you are thinking about cohabiting.

I am considering buying a house with my partner, what could I put in place now to avoid future disputes? 

• The most important first step is to have a grown-up conversation with your partner. Buying a home together is a huge step. For most of us, it is the single biggest financial commitment we will ever undertake. There is a common saying that “love is blind”. In my experience, this very often leads to one or both parties turning a blind eye to asking the big questions of how the property is to be owned as this will decide who gets what if the relationship were ever to end.  

• Take legal advice at a very early stage – long before you buy the property. Most people are surprised to discover that there are several different ways in which they can own property together. These include:

1. “Beneficial Joint Tenants” 

This is the most common form of joint ownership. Owning a property as joint tenants means that the couple are deemed to own the property in 50/50 shares, regardless of how much each contributed toward the deposit, or the monthly mortgage payments. It also means that, were one of them to die, their share would pass to the other party regardless of the terms of their will. This is commonly called “right of survivorship”. 

2. “Beneficial Tenants in Common”

Holding a property as beneficial tenants in common means that each person holds a distinct share in the property. This could be 50/50, but it could be unequal shares, if that is how the couple decide to own the property. For example, some couples decide that the person who pays the deposit is able to have a sum equivalent to the deposit repaid to them in the event of the property being sold in future, with the rest of the “equity” being divided between them. Because a beneficial tenancy in common does not create a “right of survivorship”, it is recommended that the couple each make a will so as to ensure that their share passes to the other on death, if that is intended. 

3. “Express Trust in One Name Only”

Whilst the above examples of ownership are also “trusts”, they are situations where a property is purchased in joint names. Sometimes this may not be possible, where only one person can obtain a mortgage. In that situation, it may be possible to buy the property in the name of one party, but for there to be a written trust deed setting out that the “equity” in the property is owned by the couple jointly (either in equal shares or as they have otherwise agreed).  

4. “Cohabitation Agreement” 

A cohabitation agreement is a document which is intended to record the couple’s agreement as to how they intend to deal with the property, both during their relationship and – crucially – in the event of the breakdown of their relationship. Such agreements typically cover issues such as who bears responsibility for the mortgage payments and other bills (and how those expenses are to be shared if appropriate), and what happens in the event of separation, such as whether the property has to be sold, or whether one may “buy out” the other’s share. These agreements can also cover practical issues such as who pays the mortgage and bills if one party moves out. 

Cohabitation agreements are similar to nuptial agreements which many married couples enter into. They are designed to have legal effect. Breach of a cohabitation agreement is a breach of contract and may give rise to legal proceedings. They should therefore not be entered into lightly, but can save a lot of trauma and legal wrangling (and therefore expense!) were the relationship ever to fail in future, as they set out exactly what is to happen in those circumstances. 

The sooner you take legal advice, the better, as you both need to carefully consider and agree upon how the property is to be owned, and it may take some time to draft the necessary paperwork to give effect to what you have agreed.  

And what would happen if the relationship ends and none of the issues referred to above have been discussed or agreed? Sadly, in my experience, such situations very often end badly. The law relating to unmarried couples can often lead to unfair (sometimes tragic) outcomes. Sometimes one party walks away empty handed after a lifetime of commitment to the relationship. In other cases there is bitter litigation over whether it was ever intended and agreed that a property owned in the sole name of one party, should be joint. The law is complex, and litigation can be expensive. Unless or until the law is reformed, the courts have to apply strict property laws which have evolved over the years, but which have no flexibility to take into account needs or fairness.  

A final note of caution – never think “It’ll never happen to me”. The sheer number of clients that I have advised over the years, who have said that they never thought it would happen to them, proves the point. Sadly, it is often too late for many, which is why it is absolutely crucial to take legal advice at the earliest opportunity, and agree how you wish to own your home.  

Visit our newly updated Cohabitation page for more information and advice videos.

Wayne Lynn is a specialist family lawyer and an expert in complex cohabitation disputes, including trusts of land cases and pre-nuptial agreements. You can contact him direct on wayne.lynn@silkfamilylaw.co.uk or 0191 406 5002.

Photos credits: Toa Heftiba The Creative Exchange on Unsplash