Currently, cohabiting couples have few or no rights in the event of a relationship breakdown meaning that unlike married couples there is no mechanism for splitting assets. This is despite a huge growth in the number of couples and families that cohabit rather than marry.
A nationwide poll carried out on behalf of Resolution, a community of family justice professionals who work with families and individuals to resolve issues in a constructive way, found around half of cohabitees are unaware that they lack rights should they split up.
- 59% of people polled back better legal protections for cohabiting people.
- 74% of cohabitees agree that ‘the current laws surrounding cohabitation are unfit for today’s modern society’
- 75% of Resolution members surveyed said they support a change in the law to provide basic rights to cohabiting couples
Asked about their concerns in the event of a relationship ending, 35% said they feared having nowhere to live – if a property is in one partner’s name the other partner has no automatic claim on it in the event of a breakup. One in three said they feared significant financial hardship.
Sue Andrews, a partner in B P Collins’ family practice comments:
Many people believe that cohabiting couples have equivalent rights to married couples once they have lived together for a period of time. But this is not the case in England and Wales. People who live together never acquire the same financial rights and responsibilities no matter how long they are together.
If you own a property, are moving into a partner’s property or purchasing a property together, there are things you need to consider. It might seem unromantic at such a time, however thinking about them now should avoid, at best, disagreements and, at worst, legal proceedings if things do not work out between you.
Before your partner moves in, you need to think about who is going to pay what? Also whether you intend such a payment will give your partner an interest in your property or is it simply to be akin to the rent your partner would pay if living elsewhere? Having additional money might be nice but it doesn’t follow that your partner’s payment makes it fair for them to acquire an interest in your home. They might be paying less than they previously were in rent, and you could afford the mortgage repayments and other outgoings anyway without those additional monies.
There should be a candid discussion about what you will each contribute and also whether the intention is that the other partner is to acquire an interest in your home and, if so, what and in what circumstances.
And what if a property is being purchased? Is it to be bought and owned by one partner or both? Are your shares to be equal or perhaps in line with your respective contributions to the purchase price? You should set out in a document how that property is to be owned. It could be changed over the years if, for instance, one of you reduced the mortgage borrowings or paid, from their own funds, for an extension or other works, which would impact upon the value of that property.
Documenting your agreement should avoid a bitter dispute if the relationship breaks down and your then former partner seeks to claim an interest in your home perhaps because of monies he or she paid or because he or she carried out works on the property.
Legal advice is important, particularly if reaching an agreement is difficult. The involvement of a specialist family solicitor can bring a clearer perspective to discussions and ensure that any issues are dealt with logically and rationally.
Obtaining legal advice from a solicitor at the earliest opportunity can also help you to understand the options available and furnish you with all the information you need. For example:
- If a property is owned by one person and the other is not to acquire an interest, you can have a simple and relatively inexpensive deed of waiver to record your agreement that, regardless of payments that the non-owning person makes or work undertaken, they are not to acquire an interest in your property.
- However, if it is agreed that they are to acquire an interest or in the event of a new property being purchased, then a declaration of trust can be prepared to record what is agreed about what each person’s interest is intended to be, or might become over time, subject to payments being made or work undertaken.
- Another option is a cohabitation agreement. This is a more lengthy document and is likely to be suggested if a couple want to record their agreement about matters over and above property ownership. It could deal with for instance who pays what bills and if there are children it can deal with child care arrangements and support. It might seem ridiculous but we have been asked to include such things as who has control over the TV remote, puts the bins out or is to do other household chores.
- And as cohabitees do not have automatic rights to inherit you should also consider a will.
People often feel uncomfortable about bringing up these matters however you both need clarity and certainty, and they should not be offended if the other wants to safeguard a property they already own or which may be about to purchase with their own funds after receiving a significant gift or an inheritance from a beloved deceased relative.
These types of agreements and arrangements are not just for the wealthy or celebrities. It is sensible to have this sense of security in relation to a home, regardless of its value and to avoid potential future conflict. An agreement will also provide reassurance to both of you, if the relationship comes to an end or in the event of one partner dying.
If you later decide to marry, the marriage does create legal rights and obligations, and a prenuptial agreement could be considered.