Guide to Buying a Property as cohabitees

Unmarried couples’ rights are very different from the law which applies to a married couple. In property law cohabitees are treated very differently and they have quite different rights in respect of maintenance or pension sharing.

There is a fundamental legal difference between

a couple who live together and
a married couple or a couple in a civil partnership.

The law treats these two situations in very different ways. There is no such thing as a ‘common law wife’ (or husband) so far as the law is concerned no matter how long they have lived together.

Property rights

The property rights for an unmarried couple remain the same after they have lived together as before. This is in marked contrast to the position between married or civilly partnered couples where the courts can divide all property in whatever way they think best, regardless of who actually owns them.

The difference between being married and living together

It is quite common following a divorce for the former matrimonial home to be transferred into the sole name of the ex-wife who continues to live there with the children. The ex-husband may also be obliged to pay maintenance for his children and/or his ex-wife. This may be despite the fact that all mortgage payments, for example, may have been made by the ex-husband, perhaps over many years.

The case of an unmarried couple not in a civil partnership is very different. Their property rights remain exactly the same after the split as before. Any property continues to belong to its owner and that is usually the person who paid for it. Naturally, there is some room for dispute over this but that is the over-riding principle and the courts have no jurisdiction to ignore it. So if, for example, a man owns a house and moves his girlfriend and makes no contribution and the relationship subsequently breaks down, there is no question that the house remains the property of its owner and the girlfriend has no claim on it whatever – whether there are children or not.

What about children?

However, where cohabitees have dependent children the courts have jurisdiction to refuse to order a sale of the property until the children cease to be dependent. But, sooner or later, the child will cease to be dependent. The man in this case is certainly obliged to maintain his child by making maintenance payments but he is not obliged to pay any maintenance to the child’s mother for her own benefit and nor does she have any claim on his capital.

Living together agreements

An unmarried couple not in a civil partnership can come to an agreement about what is to happen in the event of subsequent separation insofar as it affects property. Such an agreement will be legally binding.

In the case where, say, a house is to be bought jointly by an unmarried couple it is sensible to enter into a written agreement as to who has contributed what and what is to happen if the parties later split up. This agreement about co-habiting rights can save a dispute and legal costs later and it is something which a solicitor can easily do.

There are a number of other issues which cohabitees may want to consider. For instance, they are not actually legally related in any way and so if either wants to benefit the other in the event of death it is usually sensible to make a will to that effect. If that is not done then the beneficiaries may well be the next of kin.

Buying property

Quite frequently when cohabitees buy a property together they will buy it jointly. They have to decide whether to buy it as ‘joint tenants’ or as tenants in common’. If a property is held as ‘joint tenants’ then when one of the joint owners dies the property belongs automatically to the surviving joint owner. This will be independent of what the deceased says they want to happen to the property in a will. It is a characteristic of a joint tenancy that the property automatically passes to the survivor. This happens as a matter of law and a will does not affect that.

On the other hand, if a property is held as ‘tenants in common’ and one of the joint owner’s dies then his/her share of the property does not automatically pass to the surviving joint owner. The deceased’s share forms part of his/her estate and will pass according to the terms of any will or intestacy. So, in this case the deceased could, if he wished, leave his share in the property to the surviving joint owner or to anyone else, such as children by another relationship.

Considerations

The second main question that two cohabitees have to decide when they buy a property jointly is whether their shares should be equal. A jointly owned property does not necessarily have to be owned in equal shares. It is perfectly possible to buy the property in their joint names and have a written agreement (trust deed) drawn up which specifies precisely what each joint owner is to receive in the event of a sale of the property.

When a property is jointly owned if there is a dispute and there is no written agreement to the contrary the court makes certain presumptions as to whether or not a property should be sold or retained as a home. The presumptions a court might make in the absence of any written agreement might be highly inconvenient and not satisfactory to one of the joint owners.