The purchase of a house with your partner can be an exciting time for a couple and considering what would happen should you unfortunately break up is unlikely to be at the forefront of your mind. If an unmarried couple do break up, and a house is owned, complications and legal arguments can often arise.
There is a dangerous misconception that, if you have lived with someone for a certain amount of time in a relationship, you are considered their common law wife/husband. This is not something that is recognised by the Family Courts and is not something to relied upon.
When a married couple divorces, matrimonial law takes over and looks at what may be a fair and reasonable distribution of the assets taking into account various factors. For an unmarried couple, even one that has been together for 20+ years, matrimonial law will not be applicable should they sadly separate. If that couple owned a property together, a distribution that they believe may be fair & reasonable may be something that they feel is achieved.
Fictitious Case Study
Let’s say Ben and Susan have been together for 22 years. They bought a house 14 years ago in their joint names. Susan contributed £100,000 towards the deposit with Ben contributing £20,000. The property is put into joint names and neither Ben nor Susan wish to enter into an agreement regarding their contributions. Ben and Susan then wish to separate and Susan seeks to reclaim the £100,000 she contributed to the deposit. Given that the property was put into joint names, without an agreement put in place to show otherwise, Susan may struggle to try and argue she should be entitled to the £100,000 back. At the time the property was purchased, given the circumstances, the law is likely to see that the £120,000 deposit that was put down by them both is now actually on a 50/50 basis meaning that Ben and Susan have £60,000 each. Susan has effectively gifted Ben £40,000 when the property was purchased.
The law dealing with property/land owned by unmarried couples can be very strict when compared to matrimonial law. There are special arguments that Susan could try and raise to argue she should be able to recover £100,000 but the onus shall be on her to show why she is entitled to that and why the property is not held on a 50/50 basis. This can be very stressful, costly and lengthy to try and argue.
Agreements – Declarations of Trust and Cohabitation Agreements
One of the main documents used to show how a property is owned is a Declaration of Trust. This can show that one person should own 30% of a property and the other owns 70%. This can be an important document to show that a couple does not intend to show a property equally.
Another document that can be drafted is known as a cohabitation agreement. This document goes further than a Declaration of Trust as it can not only assist with how the property is owned but also deal with what would happen if you broke up. Matters such as who pays the bills, who owns particular items in the house and even who owns the pets can be included with a cohabitation agreement.
Breaking up can be an upsetting and stressful period, imagine then having to ask your ex-partner to pay towards a utility bill you have received which covers the time they were living in the property. This is something you may not want to broach with them. A cohabitation agreement can make things quite clear as to who should be liable and can certainly assist with streamlining the breakup.
Agreements in writing are far more reliable than verbal agreements. In some circumstances, a verbal agreement can effect matters but the issue with this is what can be proven and what can be sure was said. It may be hard for people to remember the precise details of a conversation some 14 years ago. Moreover, one person may decide to allege that such a conversation or agreement never occurred as it may be to their financial benefit. This is where a written agreement, such as a Declaration of Trust or Cohabitation agreement, can be extremely helpful.
Consultation
If you are experiencing difficulties or concerns regarding ownership of a property as an unmarried couple, John Hodge Solicitors can offer a free initial consultation to discuss your issues. The appointment can be held in person, over the phone or online.
Free initial consultations are subject to internal checks and availability. The information above does not constitute specific legal advice and it is highly recommended that independent legal advice is sought in respect of division of a property.
Next Steps: Get in touch
If you would like to discuss your Family matter then please don’t hesitate to reach out to our team of legal experts at John Hodge Solicitors, conveniently located throughout the South West, with offices in Bridgwater, Bristol, Clevedon, Wedmore, Weston-super-Mare and Yatton.
You can contact us either:
- by email
- via our website
- by calling us on 0800 097 8611
David Starkey
Kerry Graham
James Young