Money: Things to know before moving in

Living with your partner with no plans for marriage? Money and legal experts explain why it’s important to understand where you stand financially

More couples have moved in together during the pandemic, many of whom don’t plan to get married or haven’t been able to because of restrictions. But cohabiting comes with its risks, and money expert Jasmine Birtles warns that you need to know your rights if the relationship fails. “Whether one of you is moving in to the other’s home or you’re buying together, a ‘common law’ marriage doesn’t exist in English or Welsh law,” says Jasmine. “So, if you split, you don’t automatically get half of the home unless your name is on the deeds.” You may assume that as a life partner, you’d be considered next of kin, but this isn’t the case either. “You don’t necessarily have the right to receive financial support from your ex, apart from maintenance for children,” says Jasmine. “That’s why, from the start, it’s important to be clear who owns what and how things would be divided up if you split.” Here’s what you need to know.

MAKE AN AGREEMENT

It may sound unromantic, but if you’re going to rent or buy together, draw up a cohabitation agreement. “It’s legally binding and details exactly what would happen in the event of separation,” says legal mediator Phillip Rhodes (slaterheelis. co.uk). “The agreement should include how you’ll deal with debts either of you come in with, whether you leave your goods to your partner if you die, who gets what if you break up, and what the arrangements would be for child maintenance and contact,” says Jasmine. You can download a template on the “Living Together” section of advicenow. org.uk. “If you move into a home that your partner owns without a formal agreement, you’ll have no automatic right to stay if they ask you to leave, even if you have paid towards the rent or mortgage,” adds Jasmine. A strong case for the cohabitation agreement, then.

RENTING? GET ON THE PAPERWORK

“Have both your names on the tenancy agreement,” says Jasmine. “Then, if one of you leaves, the other can stay on as long as they keep paying the rent.” If you move into your partner’s rented home, be aware of what you’re signing up to.

“You won’t have any right to stay if you split – even if you have paid rent,” Jasmine explains.

Ask the landlord to add your name to the tenancy agreement.

BUYING? KNOW YOUR OPTIONS

There are two ways of owning a property together – “joint ownership” or “tenantsin-common”. “With joint ownership, you both have equal rights to the property,” says Jasmine. There is usually a survivorship clause, so if one of the joint owners dies, their share in the property automatically passes to the other. “If you split, you both get half each,” says Jasmine, who also points out that this could feel unjust; “if you put more money into the property than your partner, you might end up feeling shortchanged.” What about selling up? “Under joint ownership, you can only sell if you both agree, which may cause problems if one of you wants to sell and the other doesn’t but can’t afford to buy out the remaining share.”

The other option is “tenantsin-common”, where you each own a defined portion of the property, say 60/40 or 70/30.

“If one of you puts in a lot more money, they will probably want to go for tenants-in-common, so they own a larger percentage according to the deeds,” says Jasmine. “Each person can pass on their share of the property to anyone in their will, which can be awkward for the one left behind if it’s not left to them.”

BE METICULOUS

“Make sure that everything is very clear on the deeds. If you’ve been paying the mortgage but your name is not on the deeds, if you split up, you will need to prove that you made payments to the mortgage,” says Jasmine. “You can do that by providing evidence from your bank statements of payments towards the mortgage itself, as opposed to bills, housing costs, groceries, or childcare,” says family solicitor Clizia Motterle (roydswithyking. com). If you just transferred a set amount, you should itemise what each payment was for. It’s why putting together a cohabitation agreement at the start is so key. Mortgage-wise, think with your head, not your heart, to avoid unnecessary stress. “Go for a mortgage that won’t penalise you for ending it early,” says Jasmine. “Many cheap, fixed-rate deals charge a high penalty, but deals like the Habito One mortgage is fixed for 10 to 40 years with no early repayment penalties.”

PROTECT YOUR FAMILY

Unmarried partners have no right to their partner’s property if they break up, but what about kids? “Children have rights and, if you’re the primary carer, so will you,” says Jasmine. “Depending on your financial circumstances and those of your ex-partner, as the primary

carer, you could have a right to remain in your home with the children, even if you don’t own it or your name is not on the mortgage,” adds Clizia. “Your ex-partner would need to move out, and if the property is sold, you could be entitled to a share of the equity to buy another home for you and your children.” Both parents have a legal duty to financially support their kids, so whichever parent they live with would be entitled to child maintenance payments, too. If the child is from a different parent, those rights don’t apply.

ACT NOW

If you’ve been renting together for years, get on the tenancy agreement and, if you’re in a home owned by your partner, fill out a form at gov.uk to be added as a joint owner at the Land Registry. The fee is based on the value of the property. You’ll then be on the mortgage, so if you split, you would each lose half – regardless of what you put in. You would also be jointly liable for any defaults in payments. If it isn’t evenly split and you choose tenantsin-common, speak to a solicitor. “You may need a Declaration of Trust,” says Phillip. It’s a legallybinding document that sets out financial arrangements between property owners. “It depends on what’s agreed and who is paying the mortgage, but it would cost around £350 to £750 plus VAT.”

CLAW BACK MONEY IF YOU SPLIT

If you’re splitting and aren’t on the paperwork, there are options. “If you were paying all the bills while your partner was paying the mortgage, you may be able to take the case to the small claims court and show from your bank statements that you were paying the full bills rather than just half,” says Jasmine. “You need to prove you agreed to pay those bills as your contribution to free up your partner’s income. Transactions from a bank statement should show your contributions when proving this.” And if you just put a lump of money into your partner’s account each month? “It makes it harder to prove in court, which shows how important it is to agree things in writing at the start,” says Jasmine.