If you are planning to buy a property with your partner, or are already living with them in a property that one of you owns, you should consider having a Living Together Agreement or Cohabitation Agreement which clearly records what property you each own at the start of your relationship and how you intend to manage your finances such as paying the mortgage while you are living together.
Laws around Living Together
Creating a cohabitation agreement is important because there is still no law in England and Wales that allows for the assets of cohabiting couples to be divided after a separation in the way that they would be after marriage.
After a divorce, the law looks to share the family assets along principles of need and fairness which take a starting point of an equal division, irrespective of who legally owns any property, but the same law does not apply to couples who have not married. If you separate after living together the general rule is that you leave the relationship with any property or other assets, such as savings or investments, that you legally own in your name. This can often result in a sense of unfairness or hardship, particularly if one of you feels you have made significant contributions in terms of financial or family commitment, such as looking after the home or family, which is not reflected in how you own the assets if your relationship if it ends.
While it is possible to make or defend a cohabitation dispute in the civil courts about how a property or other assets owned either by one of you or jointly should be shared, these cases are usually complicated and can be costly and time-consuming to resolve. These cases require the court to look at and interpret evidence of contributions and agreements which can be hard to prove, particularly after a long relationship.
The best way to avoid this difficulty and uncertainty is to enter into a Cohabitation Agreement, which you can update to record any change in your intentions during your relationship. This is a document that clearly records your circumstances and intentions, including:
- What property you each own at the start of your relationship;
- How you intend to own any property that you buy during your relationship. This is particularly relevant if for example, you buy a property you intend to own together but only one of you is able to take out a mortgage and own the legal title.
- Who will be responsible for any mortgage payments and other outgoings and whether you intend this to be reflected in the shares you will have in any property you own if you separate.
- Whether having children together will change how you intend to share or own your property;
- How you would intend to divide your property and other financial assets if you separate.
At David Gray, we have solicitors who are specialists in the law affecting people who are Cohabiting and we can advise you on all aspects whether you are planning to live together or already doing so. Some of our cohabitation specialists are also trained Collaborative lawyers and we can offer you this option to use to agree to the terms of your agreement.