This article featured in the Winter edition of the Glasgow Property Times. You can download the full publication here.
If you are thinking about buying a house with your partner it’s worth ensuring your interest in the property is protected.
Making the decision to live together is often a milestone decision for a relationship, and on a practical level it is usually more convenient and cheaper than living separately. More and more couples are choosing to live together before getting married, but what happens if you buy a property and the relationship breaks down?
What rights do cohabitees have?
People often mistakenly believe that their rights as cohabitees are the same as if they were married or that, at the very least, any deposit they pay towards a jointly-owned property will automatically be returned to them should the property need to be sold due to a relationship breakdown.
This is not the case. Unmarried couples have some legal rights if their relationship ends or if one of them dies, but they are very different to those which apply to a married couple and can be difficult and expensive to pursue. This can often lead to unforeseen problems if a couple decide to break up.
It’s easy to take pre-emptive steps
A simple cohabitation agreement can be put in place by a family law solicitor to set out what should happen if there is a split. Our family lawyers have helped many clients who choose to put such an agreement in place to provide certainty for clients. Given the commitment that buying a property involves, it’s a sensible step to consider and one which we regularly provide for our clients at a fixed fee as part of the conveyancing process when buying a new home.
The agreement is bespoke to your particular circumstances and include each partner’s entitlement. A common arrangement we have assisted with is to agree that if the relationship ends the property will be sold, each partner will get have their initial deposit returned and the balance of the equity will be split equally. However, it can also be set up to include options to buy each other out, transfer the property to one party or the other and set out the practical mechanism to allow this to happen, or to include any other arrangements that suit your situation.
Another benefit of drawing up a cohabitation agreement is the reassurance for a parent or relative who has contributed to help one party purchase the property that their investment will be protected.
The agreement may also anticipate arrangements for changes such as having children or it can be updated as and when circumstances change.
Pragmatic if not romantic
Drawing up a cohabitation agreement may not seem like the most romantic of steps for a couple moving in together. But neither are most arrangements around finances, mortgage payments, and what happens if someone leaves or dies. Making sure you both understand what would happen in the event the relationship came to an end can avoid potentially difficult and costly disputes down the line.
Many cohabitees don’t think of making such an agreement themselves, or are shy or uncomfortable about suggesting one. In that case, a nudge from a third party – parent, relative, friend or adviser – can be helpful.
Lindsays can provide both the residential conveyancing services and family law advice required when buying your property and this can be offered at a fixed fee.