While February is often considered the most romantic month of the year, as lawyers we like to remain cautious to ensure that individuals’ contributions are protected when purchasing a property or cohabiting. We feel it is like holding insurance – while we never expect or want the worst to happen, we like to remain protected in the unlikely event that it does.
Despite common belief, there is no such thing as a common law marriage for couples who have not formalised their marriage/civil partnership. We therefore recommend that couples consider what legal protections can be put in place before purchasing a property together, to ensure their individual interests and finances are accounted for and protected, especially if a deposit is made in unequal contributions. This could be to create a declaration of trust or a cohabitation agreement. Sometimes it is useful to consider a living together agreement which can set out in advance what the respective contributions will be. We find that having these difficult conversations at an early stage can help avoid conflict altogether as it means that each party is absolutely clear about what is expected of them, which avoids unspoken assumptions and expectations which differ laying the foundation for dispute.
As cohabiting couples do not have the same financial rights and claims as married couples or those in civil partnerships, we look to the Trustees of Land and Appointment of Trustees Act (TOLATA) 1996 which sets out the powers the court have to resolve ownership disputes. This legislation does not cover just unmarried couples but also family members and friends who may own a property together.
Should the need arise, the Court has the power to order the sale of the property, allowing the release of a party’s financial interest. The query then comes as to who is entitled to what share of the property and this can involve costly litigation if there is no clear express documentation in place to reflect any agreements made between the parties.
For further advice and assistance with ownership disputes and more particularly avoiding them, please contact Chloe May on 01604 887464 email on chloe.may@maxengel.co.uk
