The legal field of 'cohabitation' is an expanding area of law, which deals not only with co-habiting couples of mixed and same sex relationships, but also other investors in property. For example, with the sharp increase in property prices over the last five years or so, younger people are starting out on the housing ladder, and often elect to ' club together' to buy or invest in property. Unless this is given careful consideration and thought, legal problems can often arise in the future.
Buying a property
At the time of buying a property, the conveyancing solicitor should discuss with the purchasers, the method in which they both wish to invest in the property. The legal expression for this is to buy as a 'joint tenant' or as 'tenants in common'.
A joint tenancy will automatically divest the property to a couple jointly, in equal shares. If one party subsequently dies then that house will immediately become the property of the survivor, irrespective of any Will that may have been written. Furthermore, upon sale of that home the couple would receive the sale proceeds in equal shares, irrespective of any contribution made by each party or subsequent contributions. The other way of jointly owning the property is as a tenant in common. This is often a useful method of clearly defining a percentage share of each party's investment in that property. For example, if 'A' contributed 80% towards the purchase price, then it might be reasonable that he or she owns 80% of the defined share of the property. Additionally, this type of ownership allows each party to leave their share of the home or investment in their Will to their chosen beneficiary upon death.
Ending co-habitation
Disputes often arise once unmarried couples, who own property jointly, split up. One party may wish to force a sale. This is possible by application to the Court under the Trusts of Land and Appointment of Trustees Act 1996. Sometimes, there may be a child to consider and an application to protect the child's financial needs during his or her minority can be made under the Children Act 1989. The law becomes particularly complex if the property is purchased in one party's sole name, with the other having contributed significantly to the purchase price, or having made a significant capital contribution to it subsequently. This is governed by a legal minefield, known as "Trust Law". Its complexity is often reflected in the cost of resolving such a dispute. The Government are currently looking into reforming the law regarding cohabitant couples who choose not to get married as currently they do not afford the same rights as married couples or couples involved in civil partnerships. However, this process is liable to take several years to come to a conclusion.
We often urge people who invest in property together or who decide to co-habit as a couple, to enter into a Cohabitation Agreement as this outlines their intentions from the start and avoids misunderstandings later on in life. Prevention is certainly better than a costly cure.
|
