Cohabitation
The Collins English Dictionary describes the word cohabit as “living together as husband and wife, without being married”. Although this is accurate, it is a very limited description. People live together for reasons of love, protection, convenience, economy etc. Cohabitation in various forms is neither modern nor experimental but it is one of those aspects of life where taking steps to regularise the legal set up can save considerable grief in years to come. We hope this note will both inform and assist you in deciding whether some aspects of your living together as married or unmarried people should be recorded. It is not just the rich and famous who might have avoided their relationships being graphically reported in the papers with a little advance planning so we ask you to consider the following when living together:
Will I or won’t I ever marry or enter into a civil partnership?
Some people decide to live together before getting married or entering a civil partnership. The cost of “tying the knot” may put some off whilst others will want to see how things go before entering into a greater commitment. Many people will not want to commit formally to their partner because of a previous divorce. If you are buying a property together, you should consider very carefully your legal position regarding the property, just in case you do not ever marry or enter a civil partnership.
Money from the Bank of Mum and Dad
Nowadays, you have to have a deposit if you want to buy a property. Parents are commonly a source of financial assistance. Some will be happy to part with the deposit as an outright gift while others might be a bit more cautious. They may decide that the deposit is an advance wedding gift which is to be refunded to them if the wedding never takes place. They may decide that it is a loan to their child, rather than a gift to their child and his or her partner. It is essential that the arrangement about deposits in these cases should be set out properly in a legal document. Then, the parties know from the outset what was intended and what will happen if things go wrong. Many a time have we seen parents distraught at having given a large amount of their life savings over the their child and partner only to see the happy couple’s relationship fall apart in some acrimony later on. Without the legal documentation, the parents’ savings will be split between their child and his or her former partner.
What if the parties have differing resources?
It is quite common for two people buying a property to have a different amount of savings. The parties contribute a different amount towards the purchase price of the property. While they own the property, they contribute differing amounts to the cost of running it, such as the mortgage payments, household insurance and the cost of services such as gas, electricity and council tax. Although an informal agreement sometimes works, it is better to have things written down so that if there is a dispute, both parties can see exactly what their financial duties are.
The other problem arises when the property is sold. Unless there is a legal document setting out who is to receive how much, the parties will each receive half of the money left over from the sale of the property (assuming it is not in negative equity!). This can be particularly unpleasant if one party contributed considerably more than the other when the property was purchased. A legal document setting out the parties’ rights will overcome this problem.
What if one party wants to sell and the other does not?
If a property is purchased to enable two people to live in it and if one party then decides to move out, the whole purpose of buying the property comes to an end. It is quite likely that the Court will order that the property be sold in these circumstances. Before they buy a property, many people enter into a legal agreement setting out what will happen if one party wants to sell up but the other does not.
What is “Common Law Marriage”?
Common Law Marriage is a fallacy! In Law, there is no such thing. The Government has said it will consider giving co-habitees rights but they have been saying this for very many years and nothing has happened yet. To be fair, it is difficult for the Law to define a co-habitee without asking very personal questions of a type which no third party is likely to be able to corroborate! For the foreseeable future, we will have marriage, civil partnerships for same sex couples and a great deal of uncertainty for many others who are just living together.
People who marry or enter into a civil partnership have the protection of a Divorce Courts. Those who don’t must rely on Contract and Trust Law. This task is made much easier if you have a written agreement setting out what your rights and obligations are.
There are signs of a change in the Courts’ attitudes to pre-nuptial agreements in divorce proceedings. “Pre-nups” are of course recognised in the USA and other countries but currently do not have legally binding effect in England and Wales. Nevertheless, they are becoming more popular as Courts are tending to take them into account in divorce proceedings.
Whether you intend to enter into a long term commitment with your partner or not, do feel free to discuss these issues with us. We will not be embarrassed and you will have guaranteed confidentiality from our professional status as your Solicitors. Remember, taking the precaution of a legal agreement now may save considerable quantities of tears and money later on!