Are you thinking about moving in with your partner? Or buying a house together? If the answer is yes, you will no doubt have a long list of things to do at this busy and exciting time. But if you’re not married or in a civil partnership, what may be very low down on that list, or not on it at all, is a Living Together or Cohabitation Agreement.
It’s the last thing that most of us want to think about when looking forward to a new life and home together and it can feel unromantic to say the least to be talking about what happens if things don’t work out as planned and your relationship ends. But it can come as a nasty surprise if things do go wrong, and you seek advice after separating from your partner, even after many years together, to find out that the law offers very limited help to people coming out of an unmarried relationship.
While married couples who separate can rely on family law and if need be the family courts for help in dividing their assets in a way that is fair taking account of individual needs and circumstances, particularly those of their children, unmarried couples have very limited options available to them, which can leave some people in a very vulnerable and unfair position. This is because the assets of cohabiting couples can only be divided according to the strict laws of property ownership.
Whether a house is bought as a home together but registered in the name of just one person (for example if a joint mortgage can’t be taken out at that time) or in the joint names of both people but one person ends up contributing more to it financially it needs to be clearly understood and recorded in writing how you actually want to share the equity in the house. The same applies if you are moving into a property already owned by your partner. Because it can be very difficult – and very costly – to try and resolve any differences of opinion at a later date.
This is because the courts will approach a dispute by first looking at how the property was bought and registered at the time of purchase. Anyone who thinks this doesn’t actually reflect how the property is actually owned, or believes that the situation changed over time has the full burden of proving this. Typically, when such cases come to court they can involve a hunt for old bank statements and receipts, and often these documents haven’t been kept.
There are some steps that people who plan on – or are already – living together can take to deal with these uncertainties and provide for what should happy in the event that they separate, or one of the partners dies. The first is to discuss making Wills which record what you both would like to happen to your property in the event of your death.
The next is to consider drawing up a Living Together Agreement (also called a Cohabitation Agreement). Not only will this enable you to clearly set out and record what you have agreed in terms of how you share your assets and belongings when you start living together, but you can regularly review and update your Living Together Agreement to make and reflect any changes, such as when children are born.
It may not be romantic, but as the best and clearest way of recording what should happen if things go wrong, it can save a lot of stress and cost, and most of all unfairness, if they do.