Cohabitation

Following recent proposals for new legislation and widely publicised case law, the Family Law team at Higgs & Sons Solicitors brings you another in a series of updates on where we now stand and answer some of the questions that your client's may ask.

But we are common law husband and wife aren't we?
It is still a popular misconception that after a period of cohabitation the parties involved become common law husband and wife and somehow acquire automatic financial rights. This is not true and in order to protect the parties positions, sound legal and financial advice is required.

So what does that mean for me if I decide to buy a house with my partner?
As it stands, the law is a confusing mixture of legal rules derived from existing property, trust and contract laws. Traditionally, if the property was owned as joint tenants, each party would be treated as owning 50%, irrespective of the relative contributions to the purchase price. However, the law surrounding cohabitees and property rights is subject to uncertainty and unpredictability.

The case of Stack -v- Dowden heard in the House of Lords in 2007 has clarified this area a little further, but at a cost that swallowed up all of the assets, valued at almost £1m.

Whenever a couple decide to cohabit and buy a property jointly they should be advised fully upon the implications and clearly define the ownership of that property in both a Declaration of Trust and a Cohabitation Agreement. This should avoid the need for costly and emotional proceedings if the relationship ends.

What if I already own a property and my partner moves in?
In certain circumstances, a beneficial interest in the property can be acquired by the non-owning party.

Again, a Cohabitation Agreement can easily specify what each party is to pay for and what their clear intentions are at the time of entering into the relationship. Any beneficial interest to be acquired can be specified in a Declaration of Trust.

And what if we already own the property as joint tenants, is it too late?
No. If both parties agree, the joint tenancy can be severed and a Declaration of Trust plus a Cohabitation Agreement can be entered into, at any time after the purchase of the property. There are potentially millions of cohabitees who fall into this category.

What about the new legislation that I have heard about?
Following the publication of a Law Commission consultation paper a series of recommendations were presented in 2007 on the basis that new legislation would be passed to govern this area of the law.

Unfortunately for those in cohabitee relationships, the government announced in March 2008 that it was delaying the implementation of the recommendations.

Whilst the idea of drawing up express agreements and declarations is not seen as romantic or exciting, the price of not doing so can be expensive. Such an agreement can not only deal with property rights and who pays for what, but also issues relating to Wills, children and any other issues the parties wish to clarify.

If you require further advice or assistance please contact the Family department at Higgs & Sons by calling 01384 342100.

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