Buying a property together

Living together before marriage – known as cohabitation – is a popular stepping stone, however, some couples are now choosing it over marriage altogether. If you’re planning on taking a big step forward in your relationship by moving in together, chances are you’ve been thinking about a few things beforehand, and that’s completely normal. You’re about to spend most of your time together, day in, day out, so thoughts about whether the two of you are ready for the big move are bound to pop up.

For some couples, moving in together also means buying a property together, too. Instead of choosing to rent a property together, or to move into a property already owned by one of them, many partners are choosing to start as they mean to go on, in a place of their own.

In the first post of our two-part series on cohabitation rights, we looked further into the legalities behind moving into a partner’s existing property. Here, we look at the legal rights for each partner, when choosing to buy a property together.  


Buying a property together

If you choose to buy a property together from the off, chances are you will want to put the property into both partners’ names, so that you have equal legal rights to the property and its shares. This is the route that the majority of partners choose to take, not only for equal legal rights, but to move into a home that they can both feel is truly their own.

There are three ways to hold a property jointly.  Beneficial Joint Tenants, Tenants in Common in Equal Shares and Tenants in Common in Unequal shares. We won’t, for the purposes of this article, explore fully what each of these mean, but if you have any questions at all concerning the ways in which to hold a property, feel free to get in touch!

Usually, parties are advised based on what they would like to happen in unfortunate circumstances, such as the death of the other party. However, that opinion may be slightly (or sometimes completely) different if the partnership hasn’t worked out for other reasons, such as one partner being unfaithful to the other.

You see, following a lengthy life together and with you passing away, you may want any of your interest to pass to your partner, regardless of your respective contributions. However, in circumstances where the parties have experienced cohabitation disputes which has resulted in an acrimonious split (sometimes only weeks after they start to live together), then your opinion may be very different and you would want to insist on your full contribution.

Our advice is to enter into the transfer on the basis of the latter situation and let your will deal with what would happen upon death.  
For this reason, you should get clear advice as to how you should hold the property. If one of you is contributing substantially more, then that party should look to protect that regardless of how difficult and awkward a conversation that may seem at the time.


Legal ownership & beneficial ownership

Legal ownership refers to what is stated at the Land Registry as to the registered owners. If the property is unregistered for some reason, then it is whose name is on the deeds.

However, legal ownership does not necessarily confirm who is entitled to what from the property. Beneficial ownership stands behind the legal ownership and can dictate who is entitled to what from the property. This is known as the equitable ownership and whilst equity should follow the law, i.e. the beneficial ownership should match the legal ownership, this is not always the case.

If you are in the process of buying a property, it is important to be aware that the transfer you sign now will be a declaration of your interest in that property moving forwards. That is, unless, that agreement is set aside, due to some limited contractual criteria such as undue influence, duress or mistake, or there is some subsequent agreement to alter the position (ideally any change should be recorded in writing).

Therefore, if you agree to be 50/50 at the outset then, regardless of your contributions, you are only likely to receive 50% share in the property when it sells. This can mean your partner will be entitled to half of the deposit you put down, too. It is usually only money expended after the breakdown of the relationship, that would be taken into account by the court in moving away from that declaration.

If the property is being purchased in one party’s name then, as stated in part one of our series, it is important to have a cohabitation agreement or a Declaration of Trust in place. If you don’t have any of those (which is very common), then you would have to claim a beneficial interest, but this can only be done in the limited circumstances. It is not automatic and depends on the parties’ verbal discussions or conduct throughout. This can often be difficult to recall after many years, and will often be one person’s word against the other, which can result in rather lengthy cohabitation disputes.


Splitting and protecting your rights

Buying your first property together as partners can be extremely exciting, however you do need to protect your rights in case anything should happen to the relationship. All it takes is a simple consultation with one of our expert cohabitation solicitors, to discuss your rights and how you should go about securing them.

Although it may seem unnecessary at this moment in time, it’s well worth putting the time in with a solicitor, to protect your future, should the relationship break down.

The two of you should also look at having a will written, even if it is just to set legal rights to your share of the property in writing, rather than anything else. Have your will updated every so often, in case anything changes either of your circumstances, or to your share of the property.

The legal aspect of cohabitation can be a little confusing, however, it’s often a wise investment of time and effort, in case anything unfortunate happens with the relationship. If you have any questions concerning your cohabitation rights, give us a call or book a consultation with one of our cohabitation solicitors, who will be able to offer you expert advice and support.