There is no such thing as a common law marriage, so who gets the house?

01 August 2017

Buying a house together is always an exciting time for people in a relationship. It's a big step, not to mention a huge financial commitment.

And while no one likes to think about a relationship ending, a couple should always think about what would happen to the property if they ever break up. A house is often the biggest asset in a relationship. So who's going to keep it? And what happens to each person's money, or even their parents' money, that's been put into the pot?

These are all common questions these days, as more and more couples are buying a house together without getting married. If the relationship does turn sour, it can be difficult to untangle exactly who owns what, especially if each person has contributed different amounts.

The situation can often be complicated by the fact that one set of parents, or perhaps both, has provided some kind of financial support. There might have been a cash gift towards the deposit, a temporary loan that must be paid back, or money spent on DIY. And no parent wants to see their hard-earned cash go to waste.

So if a couple own a house together and they split up, whose property is it? Well, it really depends on who owns what. If the property is purchased together and the costs were divided evenly, each can take their 50% share.

However, it's rarely as easy as that. Take our imaginary couple, Ben and Ellie. Ben's parents give him £10,000 which he puts towards the deposit. Ellie makes up the rest of the deposit, getting a £5,000 loan from the bank of mum and dad, and saving up £10,000 of her own money. Both Ben and Ellie are on the mortgage, but after three years it doesn't work out. What happens?

Basically, it's up to Ben and Ellie to try to sort it out. The property is in their names, and unless there's some official paperwork to say their parents made a contribution, these finances will be tied up in the house. This means their parents may never get their money back.

If the couple can't decide what to do, even with the help of a solicitor, the only other option is to take the matter to Court. There might be a dispute about how much each person should receive. Or it might be that one wants to stay, while the other wants to sell up.

Getting a Court to settle these arguments can be costly and time-consuming. It will also be very stressful for those involved, as their money, or that of their parents, will be at stake. All of this could be lost, unless a formal agreement has been put in place, like a Cohabitation Agreement.

A Cohabitation Agreement is a piece of paper that sets out what would happen to a couple's finances, should they ever break up. It can cover things like what happens to the house, how any monies should be repaid and how any profit from the property should be divided.

Yes, it's a little unromantic to plan the end of a relationship. It's also difficult to think about it at a time when the relationship is a happy one. But you never know what the future will bring, and it's better to put some form of protection in place. This ensures everyone knows the deal, preventing a bitter dispute happening in the years to come.

Cohabitation Agreements aren't as well-known as Pre-nuptial Agreements, but they're not to be sniffed at. After all, people insure their house, car and even their pets, just in case the worst should happen. Why not insure a relationship? And as long as it's been properly made, and each person has spoken to different solicitors, it's likely a Court will stick to the terms of the agreement.

To make a Cohabitation Agreement, a couple needs to decide how they'd like to share their assets, including their home, should they break up. They can then ask a solicitor to make it into a proper document.

Let the experts help

If you want to know more about putting a Cohabitation Agreement together, our Family & Divorce Solicitors can help.

Or if a relationship has broken down and you're trying to sort out what to do with a property, our Family & Divorce Solicitors chat through the issues with you. We'll set out the options available, ensuring you come to an arrangement that protects everyone's best interests.

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