How to hold property - Unmarried couples

Saturday, May 15, 2010

More and more unmarried people are choosing to live together. Many straight couples believe that they will automatically qualify for some protection under the law if their relationship breaks down. But, as with gay couples (except those that have entered into a formal civil partnership), their relationship with one another is not recognised as having any legal standing, and they have no special status in the eyes of the English legal system. 

If you have just been living together then you should be aware that there is no such thing in English law as a "common law wife" (or husband for that matter). If you live together and your relationship breaks down then it is each man or woman for themselves. 

There are 3 essential things a couple who are going to live together should do

• Make sure the house/tenancy etc is in joint names, in appropriate shares

• Set up a simple Cohabitation/Living Together agreement (we will provide more information and a draft here shortly)

• Make Wills 

Unmarried Couples - The House

More and more couples now live together without getting married, but, no matter how long the relationship, the law still effectively treats them as separate individuals with no rights or liabilities to each other if the relationship ends (unless they are same sex couples who have entered into a formal civil partnership).

This has some far reaching consequences for such couples (of whatever sex or combination of sexes), particularly in relation to their home (most people's biggest asset).The majority of couples fail to consider this until after the relationship has ended.

Unlike married couples, unmarried couples have no basic rights to their partner's property or to maintenance if they split up. Basically what is his is his, what is hers is hers, and what is jointly-owned needs to be divided. 

This applies to the home as well. Therefore if a house is bought in joint names (either as beneficial joint tenants, or as tenants-in-common - then it should be split accordingly on separation, or either party can force a sale of the property to realise their share. If  the parties are contributing unequally to the purchase price, or to payments on the property, then this should be reflected by being designated as tenants-in-common and holding unequal shareholdings (say 70% and 30%), rather than the equal shareholdings of beneficial joint tenants. 

If the property is in the sole name of one party then basically it remains that person's property on separation, unless the other party can establish that there was a common intention that they would be entitled to a share in the property. How do they do this? Here are a few examples

• It may have been agreed in a simple conversation (proving it tends to be the problem!), or in writing between the parties at some time 

• If the other party has directly contributed to the purchase price the courts are likely to accept that at least part of the property should have been in their name

• If there has been an "understanding" between the parties and the non-owner has acted to their detriment as a result (e.g. contributed to mortgage repayments, paid household bills, or, perhaps, sold their own property) then the courts may agree they should share in the property. 

The parties can, of course, come to an agreed settlement, but if not, such disputes can become messy and expensive. 

It may not sound too romantic, but it is quite legitimate for unmarried couples to enter into an agreement when they start living together to try and cover any disputes on property if they should split up. Its worth considering.

If you own your property as joint tenants and your relationship breaks down, one of the first things that you should do is to break the joint tenancy. This converts the joint tenancy into a tenancy in common, which means that you will have a distinct share in the property that will NOT automatically pass to your former partner/spouse.

Co-Ownership - Joint tenants or tenants-in-common?

If you buy a house jointly with someone else (your spouse, lover, a relative or friend) then it is important to decide whether you will own the property as joint tenants, or tenants-in-common. So what's the difference?

If you are joint tenants then each of you jointly own the entire property (technically its held by you in trust for yourselves!). The consequence of this is that upon the death of one party their interest in the property passes automatically to the survivor. It is therefore usual for married couples to buy a property as joint tenants.

If you decide to hold the property as tenants- in- common, then each owner has a distinct share in the property. If there are two owners this will automatically be half each, if three a third each, and so on. Alternatively you can decide between yourselves what share of the property belongs to each owner. For example if 2 friends were buying a property together and one contributed more to the purchase price than the other, this could be reflected in the respective shares of the property, say 75% and 25%. The important point is that each of the tenants-in-common always owns their share of the property, and are only entitled to that percentage of the sale proceeds, if sold during their lifetime. If they die then their share of the property forms part of their estate. It does not automatically pass to the other owner(s).

Unmarried Couples and Death

The other essential matter for unmarried couples to consider is that, as they are not related, unless they make a Will in favour of their other half, then, should they die, their estate will pass to their immediate family under the intestacy rules rather than to their partner (except their share in the home if they are joint owners and hold as beneficial joint tenants.

An unmarried partner will not even be entitled to take out a grant of letters of administration and administer their partner's estate, as they are not a relative of the deceased. 

If the relationship is a serious one, then one of the first things they should do is to each make a Will. A Will can always been amended, changed or added to, but if there is no document at all, then the deceased's estate will simply pass to the appropriate family members or even the Government, rather than to the person's partner.

Unmarried Couples and Children

If the parents of a child are unmarried, then only the mother has any automatic rights in respect of the child. She alone will have parental responsibility for the child, which covers all aspects of his/her welfare and upbringing. However since 1 December 2003 (s111 of the Adoption & Children Act 2002) it is now easier for an unmarried father to acquire similar rights. All he needs to do is to register the birth of the child with the mother.

An unmarried father can also acquire joint parental responsibility or (in extreme circumstances) sole parental responsibility, if the parents have entered into a Parental Responsibility Agreement (more on this here at a later date), or if he applies to the court and they grant him an order in his favour.

Therefore if an unmarried couple split up the mother will automatically have the right to look after her child in a manner and place as she sees fit, and the father could not challenge her unless they have entered into a Parental Responsibility Agreement or he has a court order in his favour. 

The father can apply to the court for joint parental responsibility, a residence order (ie that the child live with him rather than his/her mother), or for a contact order (ie that he should be entitled to see his child on a regular basis).