Cohabitation: what are your property rights when engaged?
Do you know 6 out of 10 couples who live together think they have the same rights and protection as married couples if they split up? The truth is, you don’t.
I’ve lost count how many times I’ve heard people make reference to being a common law husband or wife over the years. But there’s no such thing.
In this country, you’re either married or you’re not.
The law that affects cohabiting couples is based on old property and trust laws and is quite complex.
When these cases go to court they can often end up being much more expensive than those involving married couples.
If you own your house together…
Then how you share the equity depends on whether you hold it as tenants in common or as joint tenants.
When you buy a property together, it’s crucial you discuss with your property solicitor how you wish to hold the property.
The solicitor should advise you on the difference between joint tenants and tenants in common, so you can decide which is best for you.
The solicitor should then clearly indicate on the transfer document how you’ve decided to hold that property. This makes it very clear what should happen to the equity if you separate.
This statement on the transfer document is called a Declaration of Trust. If the transfer document doesn’t have this declaration, then there’s a greater chance of costly legal proceedings between you both if you separate.
If you own your own home and your partner is planning to move in with you…
- Get a cohabitation agreement drawn up by a solicitor which sets out who owns what and what will happen in the event of a separation
- Don’t let your partner pay any money at all into the bank account from where the mortgage is paid
- Don’t allow your partner to pay for any utility bills for the property
- Don’t ever state to your partner that the house will belong to them
- Don’t allow you partner to pay for extensive renovations or improvements to the property
- Do allow your partner to pay towards the grocery shop, holidays and socialising if they want to make some sort of contribution financially
- Remember that any gifts you give to your partner will be presumed to be a gift unless you specifically state otherwise
If you have children…
Schedule 1 of the Children Act 1989 states that the house can be transferred to the parent who’s primarily caring for the child, regardless of whose name it’s in.
This is only temporary until the child turns 18 or finishes full-time secondary education (whichever is the later), then it’ll revert back to the original owner.
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