Buying a House Together When You're Not Married
12 October 2017
Buying a house with a partner is a big commitment. Couples will usually only decide to buy a house together if things are progressing well in their relationship. If you choose to buy a house with your partner when you are not married (or even considering marriage) there are steps you can take to ensure that your interest in the property is protected if the relationship breaks down.
Unmarried property owners in England and Wales have slightly different legal rights regarding the ownership of the property, compared with those who are married. Not being married also affects an owner’s rights to the property either when the relationship ends or when their partner dies. So it is important that both people fully consider their intentions before buying a property together.
When buying a property with someone else, there are two forms of joint ownership to choose from: Joint Tenants and Tenants in Common.
If you choose to own the property as Joint Tenants, the property is considered to be owned jointly, so in the event of the death of one owner, their share in the property will automatically be transferred to the surviving owner. This is known as the ‘Rule of Survivorship’.
If both people would prefer to keep their interest in the property completely separate, it may be better to purchase the property as Tenants in Common. This will mean that if one person dies then the Rule of Survivorship will not apply. Even in death, the shares in the property are considered to be separate. These shares can be gifted by each owner to whoever they choose in their Will, or if no Will exists, be inherited by whoever is entitled to inherit their Estate.
It’s a good idea to discuss these options with Conveyancer, as whichever option you choose can be used to work out the agreed share of equity that each owner should have in the property.
For many couples it is worth entering into a Cohabitation Agreement before buying a house. This written agreement would outline the ‘intentions of ownership’ and each person’s understanding of what would happen in the event that the relationship came to an end.
It may also be relevant to share a list of the assets and income of each person, as this will demonstrate disclosure between both people in the event that the Cohabitation Agreement needs to be relied upon.
If you and your partner buy a home together without first deciding how each of you would like to protect your investment, this can result in a costly legal dispute if the relationship ends. In the event that none of the above pre-emptive steps have been taken, the Trusts of Land and Appointment of Trustees Act provides a route for cohabiting partners to resolve issues. This process can be long and complex, so it is better and much cheaper to put a Cohabitation Agreement in place straight away to avoid having to take this route.
If you are buying a property with your partner and you are getting money from family or friends, you can protect their investment with a Declaration of Trust / Deed of Trust.