A number of my close friends are beginning to take their first steps on to the property ladder. The majority are purchasing with their partners but, as is becoming increasingly common, most have not walked down the aisle or uttered the phrase, "I do" before purchasing a property together. This is particularly disappointing for me as a wedding is always much more exciting than a house warming party!
The high property prices in the south east mean that most 20-somethings wouldn’t be able to get a mortgage or save an adequate deposit on their own, so purchasing with their boyfriend or girlfriend facilitates their escape from ‘Generation Rent.’
According to the Office of National Statistics, the fastest growing family type is the cohabiting couple family which has more than doubled from 1.5 million in 1996 to 3.3 million in 2017.
However, when discussing the purchase of a first property, and all the excitement that goes with it, the inescapable "What happens if we break up?" question often crops up. There is a common misconception that if you live with a partner for a significant period of time you will eventually enter into a “common law marriage”.
According to Resolution, the association of family lawyers, 47 % of 18-34 year olds think cohabiting couples have the same legal rights as married couples, which correlates with my own friends' opinions. This is not the case and there is no such thing as a “common law husband” or “common law wife”.
If you are cohabiting and the two of you have joint ownership of the property, then, unless you agreed otherwise when you bought it, you should both be entitled to something from it on separation. The division of shares will depend on how you actually own the property and whether there is any declaration of trust.
If you are cohabiting and only one of you owns the house, the basic legal position will be that the non-owner has no claim to it. Even if the non-owner agrees to contribute to the mortgage and other running costs or helps out with decorating, without any legal ownership of the property the general rule is that they would not own a share of the house. It is possible in some rare circumstances to establish a claim, but these are very much exceptions to the rule.
It is always best to talk about the worst eventuality at the start of the house buying process before signing anything, so that each of you know where you will stand if the relationship comes to an end and you want to go your separate ways. Putting down any arrangement you make with your other half into a ‘Cohabitation Agreement’ can help both parties clarify exactly what they are contributing and what will happen if the relationship ends.
The legal side of things that goes with the exciting period of buying your first house or moving in with your partner for the first time can be a little bit boring or difficult to talk about. However, it is always best to deal with these things at the outset to prevent any more upset or distress if things don’t go ahead as planned. Simply avoiding the "white elephant in the room" is never the solution!