Due to the fact that, contrary to popular belief, there is no legal recognition of the concept of “common law husband/wife”, unmarried couples who live together have no automatic rights to each other’s assets or to maintenance, (although they may be entitled to child maintenance or other financial claims on behalf of a child).
That said, during the period of cohabitation, parties may acquire property rights that need to be considered when they separate. The basis on which a property is owned (solely or jointly) can often determine how it is divided upon separation. However, claims can arise where couples make separate financial contributions to a property, either as lump sum payment or over a period of time.
In that situation, it is necessary to undertake a thorough assessment of exactly what contributions each party has made and what the couple intended and believed the financial consequences of those contributions to be. The process can be made more complex by contradictory documentation, differing opinions, and the passage of time.
If a dispute arises between a cohabiting couple over property rights or, in the event of a jointly owned property, whether, when and how it should be sold, we can advise and try to negotiate a resolution without going to court. If appropriate, we can help you agree and draw up a Separation Agreement. However, if a settlement cannot be reached, one party can make an application to the court under The Trusts of Land and Appointment of Trustees Act 1996 for a judge to decide the outcome. We can assist with this application too.
This is a complex area of law where there is still no definitive law in England and Wales governing the breakdown of the relationship of cohabiting couples. Therefore, if you are considering whether or not to cohabit, it is recommended that you take legal advice.
A Cohabitation Agreement can be drafted to clarify from the outset your understanding of your financial arrangements both during the relationship and in the event of it breaking down which, in turn, can help avoid complications and reduce areas of dispute (and legal costs) at a later date.