Cohabitees should check rights on home ownership
Unmarried couples do not share the same legal rights as those who are married and yet two in three people who are looking to buy a house aren’t aware of the rules, new research by law firm Shakespeare Martineau has revealed.
Helen Bowns, family partner at Shakespeare Martineau, said: “Choosing to live together before getting married or entering into a civil partnership is pretty much the norm in today’s society. Although it can provide a financially practical option, many couples fail to recognise the lack of protection of their assets if they separate.
“Regardless of what people read or hear, there is no such thing as a common law spouse. Unmarried couples who live together are merely cohabitees and do not have the same rights as married or civil partnered couples. Even if they have lived under the same roof for 50 years, the court could treat them in the same way as friends living together.
“In the event of a relationship breakdown, the less well-off party is at risk as they will not be able to make a claim for either maintenance, capital or pension provision. They can only claim their share of joint property and money, but anything held in the sole name of the other party is theirs to keep.
“The only way to get around this is to enter into a marriage or a civil partnership, or create a cohabitation agreement.
“Being unmarried or not entering into a civil partnership also means neither of you are entitled to receive each other’s assets on your respective deaths. If you want to benefit each other, you must prepare wills to state this.”
As for cohabitation, she adds: “There is no automatic entitlement to a property when parties cohabit for whatever length of time.
“The only way in which a beneficial interest can be claimed is by a change of the legal title – for example, a transfer of a property into joint names – or if there is a declaration of trust or other written agreement drawn up confirming that a beneficial interest has arisen.
“Otherwise, any claim would have to be made upon the basis of a “trust” having arisen and could simply be one person’s word against the other’s, which is notoriously difficult to prove.”
Almost half of people incorrectly believe that paying the bills means they will get a share in a property owned by their partner.
Helen said: “You may acquire a beneficial interest in the property if you contribute to the mortgage or towards something that increases the value of the home, such as an extension.
“However, any agreement in this regard should be discussed and recorded in writing.
She suggests drawing up a cohabitation agreements to avoid unwanted conflict further down the line.
This sets out what will happen to joint and separate assets in the event of a break-up.
Helen adds:: “A living together agreement could clarify ownership details and who will pay what while they live in the property. It is more essential to have this agreement in place if the house is in one party’s name only or if children are involved, as protecting your wealth will provide security and help safeguard their future.
“In order for a cohabitation agreement to be legally binding, it will need to be drawn up by a lawyer. Once everything is agreed, the contract must be signed and witnessed by both parties in order for it to hold up in court.”