Are cohabitation agreements unromantic?

July 26, 2017

Relationship breakdown can be very stressful and often raises a number of legal questions like for example, what happens if my partner wants to sell our house? I have ‘financially contributed’ towards the property, will I get a fair share?

Cohabiting couples do not have the same legal protection as married or civil partnership couples which can lead to problems. 

Moving Home 1 Ss 445007185 Hr

TLATA - What is this?

Property disputes outside of marriage/civil partnerships are dealt with under Trusts of Land and Appointment of Trustees Act 1996 (TLATA). It is a piece of legislation that allows the Court to resolve issues relating to the ownership of a property. It also provides the Court with the power to force a sale of the property if necessary.

Financial Contributions - What are they?

It comes down to evidence. When a property is owned by you or your partner solely, certain circumstances may allow the other party to claim a financial interest in the property, eg, when you have directly contributed towards the property such as payment of the deposit; or you have made payments in respect of the mortgage. It may be that, such contributions have been made on the assurance that the non-legal owner would in the future acquire an interest in the property. 

My partner and I have separated does this mean we have to sell the house?

No, not necessarily.  It may be possible to reach an agreement about who will remain in the property or whether it should be sold.  If you are unable to agree, then you may attempt mediation or as a last resort, the Court process.

The Court will have regard to the following factors when deciding whether a property should be sold and/or whether or not there should be a lump sum payment:  

  1. the intentions of the parties at the time of purchase 
  2. the reason for purchasing the property, 
  3. the welfare of any minors who are living or may be expected to live at the property and 
  4. any interest a secured creditor may have. However, such claims are incredibly expensive, with a potential Court fee amounting to 5% of the value of the property excluding any legal fees!  

Is there anything I can do to avoid lengthy and expensive Court Proceedings?

Yes absolutely. You and your partner can enter into a Cohabitation agreement which would set out the basis of how your relationship will work from everyday things like who pays the mortgage, and bills to how, if any, financial interests would be shared if ever the relationship did breakdown.

Is it unromantic? If anything, being realistic from the start of a relationship can save you both emotional and financial heartache later on should you break up and tensions are high.

Is there any other way I can protect my interest in the property?

When a property is owned by a cohabiting couple jointly the law presumes that the property will be shared equally. This will be the case even if one party has contributed more towards the purchase, which may seem unfair.

The best solution is a Declaration of Trust, which would set out clearly what each party is entitled to, if the property is sold, and can also protect any unequal contributions made by one party. 

Our specialist lawyers are here to help. Please pick up the telephone and contact us if you need any help and advice regarding cohabitation agreements– or any other legal issue. Call 0117 929 0451 or email info@incemetcalfes.com 

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