Living With Your Partner – Protecting Your Rights

Living with your partner or buying a property together is an exciting prospect and your legal position should be clear from the beginning, ideally. If you don’t protect your rights it could critically affect your circumstances should the relationship end.

If you are planning on buying a property together for the first time, you will need to decide how you are going to own the property and make this clear in the documents which are drawn up prior. It is always a good idea to make a Will when circumstances change, but especially once you own property.

Buying together

Joint ownership of property ensures that each party has a legal share in the property. If you were to split up and the property is in one person’s name only, legally the non-owner has no right to a share of the property. This situation can be altered if an agreement is drawn up or if “trust principles” apply.

There are two types of joint ownership of property, which are:

1. Beneficial joint tenants

This means that the whole property, or if you decide to sell, the proceeds of its sale belong to both of you equally. Neither one of you have a separate share that you can sell or leave to anyone else in a Will. If one of you dies, the other becomes the owner of the whole property. This happens automatically. This type of ownership suits most couples.

2. Tenants in common

This still means that the property is still owned jointly, but each of you has the choice of holding the property in equal or unequal shares. As an example, if one party has put in more money towards buying the property, you may decide it is fairer to reflect this in your shares. So you could have one of you owning 70%, and the other owning 30% of the property. If the property is owned as Tenants in Common and one of you dies, that share can be passed on in that person’s Will or under the rules of intestacy should no Will having been made.

If you own a property as tenants in common, it is important for there to be a document setting out the shares in the property and, if the property was sold, how the proceeds of the sale would be divided. Such a document is usually called a “trust deed” or a “declaration of trust”.

If you choose tenants in common it is important to:

• Make a “declaration of trust” – this is a legal document that sets out each person’s share of the property, and the procedures for selling if one of you decides they want to sell while the other does not.

• Make a Will – owning property as tenants in common does not make your partner the automatic beneficiary of your share of the property, it is therefore very important you both make Wills to ensure your wishes happen to your share should you die.

Moving in together

If you or your partner already own the property and one of you has moved into that property, then it is likely the property is in one person’s name only. If you or your partner make any contributions towards the mortgage, bills, and general maintenance of the property, this is something that you need to talk about.

You need to try to agree at the start what the original position was, such as who owned the property and what each of you agrees the new arrangements are. The agreement can then be put in the form of a declaration of trust setting out your agreement.

Living Together Agreements

It is a really good idea to make a ‘Living Together Agreement‘ (or Cohabitation Agreement as it is sometimes called) when you have made the decision to move in or live with your partner. The document is a record of what you have agreed about how you will share the property and ownership, along with capital assets, personal items and chattels. It encourages you to think about the fair and easy ways of organising your day to day finances and to set out what will happen should the relationship come to an end. The agreement can help to strengthen your relationship by both parties feeling more secure.

To ensure that the Living Together Agreements is legally binding, you would need to ensure both parties take independent legal advice, and that you are both honest with the other about your finances before the Agreement is prepared. So long as the Agreement is prepared as a formal legal Deed it is then legally binding.