Make No Assumptions Before You Move In Together
You’re not married, not equal property owners and you’re moving in together. How this impacts your legal standing is something most couples in this situation don’t realise until they’re facing the consequences of a messy break-up or disputes over their assets and responsibilities. Cohabitation agreements can go a long way to deal with issues of property ownership and other arrangements between cohabitees ahead of troubled times. Unfortunately, when it comes to cohabitation and the law, too much is wrongly assumed. We’ve rounded up the top 5 myths so you know where you stand before you step foot over the threshold!
Myth 1 – If we shared the costs, we should share profits on the house when we split up.
Sharing may be caring, but it isn’t ownership. Consider the scenario of a couple who have lived together for 10 years and shared everything equally in terms of mortgage payments and bills. If the house title and mortgage is only in one name, and without a clearly defined cohabitation agreement, the non-owning party will have little recourse as to ownership rights on the house. This is not to say that it is impossible however, litigation within the area of property law is often unpredictable and always very costly.
Myth 2 – I’m his ‘common law’ wife – I have the same legal standing as a married person.
Sadly not, although the term ‘common law’ spouse is freely used in conversation in reality it has no legal connotations. Unfortunately, this misconception can lead to a host of misplaced understandings with regards to rights afforded to both parties. Marriage of course creates certain legal rights and obligations but, this is not to say that to achieve the same standing requires a trip down the aisle. Whether it be that marriage is in the future, or simply not on the cards, it is important to consider the future of a relationship with all the intentions of the parties clearly defined.
Myth 3 – We had a verbal agreement…
While verbal agreements have their place in law, often they are disputed by disagreeing parties and will be evidentially difficult to establish. Furthermore with regard to such substantial difficulties that can arise from the breakdown of a relationship, it would be extremely unwise to rely on a verbal agreement. This is especially true given that it could be denied at a later date. It is essential that any person contemplating cohabitation considers their expectations in the event that the relationship falters and commit those expectations into a written format. If agreement is a challenge at the inception it does not bode well for the relationship and almost certainly guarantees a hugely expensive separation later in terms of legal costs not to mention emotional anxiety.
Myth 4 – If one of us dies, the other will keep the house
Many people find themselves in a situation in which both parties are paying into a property but it is held only in one of their names. This can happen through a number of different ways e.g. one party moved in at a later date, bad credit made mortgaging easier or even something as simple as a “I’ll pay the bills, and you pay the mortgage” kind of agreement. These situations do not affect day-to-day lives and so often seem sufficient. They are not. Even if the relationship is a happy and successful one, other intervening events could occur. If one partner were to die, it could cause a number of issues in terms of who gets the property. The most obvious answer to this would be to have a will that expresses clearly that intention however, a valid cohabitation agreement could suffice as a method of recourse to retain what is rightfully yours. The most satisfactory answer to this would be to create both a will and a cohabitation agreement that defines these in like terms in a manner that can later be relied upon.
Myth 5 – I supported him financially to build his career but he won’t share his pension now we’re both retired.
If the relationship fails at a late stage in your life, it can be especially difficult for the financially weaker party against the wealthier cohabitant. Pensions for example are a minefield and should be considered as soon as possible and committed to a written agreement. The law reports are littered with cases of long relationships and the weaker party achieving no remedy because of the rules failed to protect such situations. A cohabitation agreement skillfully written will address these matters so both parties have peace of mind.
Cohabitation agreements can set out the terms of ownership and what happens during the relationship and in the event of a break up. Seek advice before you move in to avoid disappointment and financial difficulty should you break up in the future.
Download 'Cohabitation Agreements - A Client's Guide' HERE