Posted on Monday, March 5, 2018
Buying a house with a partner is an exciting time and we don't want to take the shine off things but when it comes to the law, co-habiting couples may not have all the protection they thought they had.
If the worst should happen and further down the line you decide to split-up, you'll be grateful you set your house buying agreement out right from the start.
Kelvin Henderson, partner and solicitor at Nelsons Solicitors, dispels the myths surrounding couples who are not married and then decide to separate.
What is 'common law' marriage?
A common misconception when a couple have lived together for a period of time but are not married is that they have a common law marriage. However, they are simply cohabiting.
There is no such thing as a common law marriage and you do not have the same rights as a married couple or couple in a civil partnership just because you have been living together for five, 10 or even 50 years – you must have the right legal documentation in place.
Despite the increased frequency of cohabitation, it does not give those living together the same legal right as their married counterparts.
Take time out to talk about the important issues
If an unmarried couple buy a house where they intend to live together, it is really important they have a discussion about who owns it and what share they should each own. They may be happy to buy in joint names and to have equal shares, but what happens if one has provided all of the deposit or will be paying a bigger share of the mortgage?
In those circumstances, they may prefer to have shares in the property that reflects their contribution to the purchase price. This may mean that one person has a bigger share than the other, or it may even mean that only one of them owns the house and the other has no interest in it.
Unmarried couples buying a house together often don’t have that discussion and they end up buying the house as ‘joint tenants’, which means they will have been taken to have agreed to own the house in equal shares unless there is some very clear evidence that this was not the case. That doesn’t matter so long as they are living together happily but this can cause problems if they fall out.
The difference: This is what happens when a married couple separates
When a married couple separates, the court considers the assets of the marriage and redistributes them in a way that is fair. The judge has to look first at what is required to meet each person’s needs and must have regard to the needs to the children as the first consideration.
Any savings or other capital that either person has is included in the calculation, even if they are held in only one of the couple’s sole name. The court can take account of other assets such as a business owned solely by one of them and, most importantly, account has to be taken of pensions and an order can be in one person’s favour giving them a share of the other’s pension.
The court can also order one person in a marriage to pay maintenance to the other person and this could be for the rest of their joint lives.
This is what happens when an unmarried couple separates
None of these remedies are available to unmarried couples. It doesn’t matter how long they have lived together, an unmarried person does not have a right to a fair distribution of assets which have been built up during the relationship.
All that a court can do is look at who owns an asset, such as the family home, and make an order for the sale of that asset and the division of the proceeds of sale in accordance with the specific shares that they own. If one has a large savings account or a pension built up during the relationship, the other is not entitled to a share.
So, what should cohabitees think about?
If a relationship does break down, believing everything will end amicably and that everything will be split equally is an easy mindset to fall into. Over the course of a relationship a lot can change and to prevent later problems, I encourage cohabitees to put in writing what their agreement is.
You should be thinking about whether or not to have a joint bank account and whether your wages all go into this account. You should also consider if you have a personal account, what it will be used for, how house contents are paid for and how to split everything if you break up.
The point of setting things out in a cohabitation agreement is that, should the worst happen, including death, the logistics are all laid out clearly beforehand and the process is made easier in what is already an emotional time.
Are there any plans for law reform to make things fairer for cohabiting couples?
This all seems to be very unfair and there have been various attempts to reform the law to give unmarried couples additional legal rights to protect them if the relationship breaks down. At the moment there has been little support from the government for reforms, which many think are long overdue.
Source: Leicester Mercury