Are you cohabiting? If so, you are amongst the 15% of both men and women in this country aged 16 to 59 who are currently cohabiting. Whilst some of these couples will not buy property, many of them will, and the law used to determine the ownership of property belonging to cohabiting couples is unfit for purpose.
The difficulty is that even if a couple buys a home jointly, and they record that in the purchase documentation, there may be difficulties in working out what to do on relationship breakdown:-
(i) if one person wants to sell and the other does not;
(ii) if one wants to stay put and the other agrees to be bought out, but they cannot agree how much the property is worth, so cannot calculate a half share;
(iii) they agree that one person can buy the other out, but one of them paid for the mortgage/garden landscaping/that holiday to Turkey during the relationship/lived in the property alone for 18 months and paid the mortgage without paying rent to the other owner – and thinks that should be taken into account in the calculations, but the other does not;
(iv) the house is in negative equity and the couple cannot decide how to share the debt.
These are just a few of the types of issues which can arise. A divorcing couple has the option of relying on specific law designed for divorcing couples, established to help them resolve these types of difficulties, but this is not a route open to a cohabiting couple. The law that unmarried couples have to use to resolve financial disputes has been described as a witches’ brew, because it has been cobbled together from lots of different bits of law. It is the same area of law that would be used if you and I were purchasing a house together and then could not agree how much each of us owned of that property. Whitewashed over this is the cohabitation caselaw, tales of unsuspecting individuals, who find themselves in difficult positions, often having gone through life without a hint of understanding about the legal complexities which awaited them on relationship breakdown.
The questions above arise on the best case scenario of the couple having purchased the property as “joint tenants”, with no dispute arising as to their share in the property. Even more complex is the situation where there is no evidence, on the face of the purchasing documentation, as to how the property was to be owned. Couples can be faced with undertaking a financial forensic exercise into their entire relationship.
The Supreme Court set out a checklist in 2007 about points which could help the court work out what a couple had intended should happen with a property if they had failed to write anything down including “the parties’ individual characters and personalities” . As you can imagine, trying to determine the answers as to how a property was financed, how a couple’s financial arrangements were set up, and details about the nature of a relationship are questions which are often very difficult to answer, particularly if a purchase took place many decades later, and this can be a costly and complex exercise.
Consequently, whether you will achieve the outcome that you are looking for on cohabitation relationship breakdown is intensely fact specific, and is likely to require detailed analysis by a specialist family lawyer. Clearly, this is a situation where prevention is better than cure – and it is wise to make sure before your purchase a property, or move into someone else’s home, or move someone into your home, that you think and talk through what you intend your respective legal rights to be, and then get that recorded legally, both on the Land Registry documentation, and in a cohabitation agreement. This is easy to say though – and in practice is much harder for individuals to do. Not many couples enter “post nuptial agreements” to regulate their relationship during marriage To expect cohabiting couples to do the same is optimistic at best. Consequently, up to 15% of the 16 to 59 year olds in this country are operating in a legal wasteland, and only realise this when they are looking for the exit.
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