Most of us have heard of the phrase “common law husband or wife”.
But in law there is no such thing.
Instead, I am seeing an increase in cohabitation disputes for various reasons:
- An increase in rates of home ownership
- An increase in real values of properties
- An increase in couples not marrying
- Ignorance about the law in general
The purpose of this blog is not to go into the detail of the law or relevant cases but to highlight some points which parties should be aware of when they are about to cohabit or indeed when separating.
Moving In Together
Guidance for people moving in together or buying a property together, could include:
- To agree in advance who owns the property, in what shares, and what happens if the relationship ends
- Put it in writing
- If circumstances change or the relationship ends then it may be necessary to revisit the agreement regarding ownership and for each party to decide:
- Whether or not the property should be sold;
- If the property is to be kept, who owns it, who pays the mortgage and other outgoings;
- Discuss and agree how to deal with the property;
- Do not just leave matters to drift;
- Seek legal advice.
Breaking Up Advice
As a starting point, it is often necessary to consider:
- Who owns the property?
- Is it held as joint tenants or as tenants in common, if it is the latter, in what shares?
- Should a notice severing any joint tenancy be served and, if it is, should it served without prejudice to the right to argue that the tenancy is already a tenancy in common?
- Should the property be sold?
- Can any sale be agreed or is an application necessary to Court for an order for sale?
- If the property is to be retained, who is going to own it, who will pay the mortgage and how will the other party be brought out
These are often a good idea to avoid or limit areas of dispute in the event the relationship breaks down.
Points here to consider are:
- It should be in writing and signed by the parties
- It should provide a clear formula for devising the ownership in the property: either in fixed shares or a simple mechanism to establish shares
- A warning that a division based on “contributions” can sometimes be too vague and lead to a dispute
- What happens if the relationship ends? Is the property to be sold or is there an option to buy the other party out?
- Legal advice should be obtained and there is a lot of scope for what can be included in a cohabitation agreement but sometimes, like most things in life, it is better to keep it clear and simple
What Happens if There is a Dispute?
Following case law, a useful checklist of relevant factors could include:
- Any relevant advice or discussions at the time of the property transfer or purchase
- The reason why the property was purchased in joint names
- The purpose for which the property was acquired
- The nature of the parties’ relationship
- Whether the parties have children for whom they both have a responsibility to provide a home
- How the purchase was financed, both initially and subsequently
- How the parties arranged their finances
- How they discharge the outgoings on the property and their other household expenses
- The parties’ individual characters and personalities
This is not an exhaustive list and some factors will not always be present and there may be others.
Like most things in like, prevention is better than cure. That is why it is important for parties thinking about cohabiting or actually cohabiting, to regulate their affairs by way of, for example, a cohabitation agreement or a declaration of trust.
We do not, however, live in an ideal world and sometimes parties either do not think about it, are unclear about their intentions and simply enter into a dispute following a relationship breakdown.