It’s late February, Valentines Day has passed – the roses are beginning to wane and the chocolates have all been eaten. For many of you however, romance is in the air. Nothing says “I love you” like starting a new chapter and you may have made a commitment to move in together. This is exciting yet challenging as although it may seem unromantic, there are important steps you must take to plan for your future and protect your future selves. It is very easy to get caught up in the moment, but good planning will make for a happy and harmonious couple who are ‘living together’.
Renting
If you are thinking about renting together, you should consider putting both of your names on the tenancy agreement. If only your partner is named on the tenancy, and you separate, they can evict you from the home (with reasonable notice). If your named partner leaves the home instead, you can ask the landlord to put the tenancy in your name but the landlord does not have to agree to do so. You need to think about paying for utility bills, as well as whether you will have joint bank accounts. You also need to think about furnishing your home – who will own what, as well as how the rental deposit is going to be paid for, and repaid should the relationship come to an end.
Buying a home
When purchasing your home together, your solicitor or conveyancer will explain the ownership options available to you. You will be able to choose whether to purchase the property as joint tenants or tenants in common. Joint tenants means that the property is owned jointly between you both. In the event of you or your partner dying, the entire property will automatically pass to the other. Tenants in common allows the property to be owned in defined shares and ensure that on death the property passes to other beneficiaries, not necessarily the other co-owner. It also allows you to hold the property in unequal shares. For example you could own 60% of the property and your partner could own 40%. Often a ‘declaration of trust’ is entered in to. This is a legal document which sets out various aspects of owning the property as well as defining the shares. In the event that you and your partner separated, the court would look at the legal ownership of the property, as well as the intentions when you bought.
You are going to need to think about how purchase costs are going to be paid for, as well as the mortgage. As above with renting, you will need to think about banking arrangements and paying utility bills.
You will also need a will!
As well as ensuring the legal ownership is recorded appropriately, you could also enter into a Cohabitation Agreement which would set out your intentions. It would include a formal record of; eg how much each of you paid when purchasing the property, how much each of you would contribute to the household (mortgage etc.), what would happen in the event of you splitting up such as sell the house, and any other information such as joint bank accounts.
A Cohabitation Agreement is not legally binding but the courts place a lot of weight on this document and will generally uphold the agreement provided that the outcome is fair. It is advisable to seek legal advice when drawing up a Cohabitation Agreement. Full financial disclosure must take place at the time the agreement is prepared so a solicitor will be able to advise you and ensure that the document meets all of the legal formalities.
A declaration of trust and a Cohabitation Agreement may seem unromantic but it is extremely sensible to do as both of you would know where you stand in the event of separation. It will also mean that issues arising after separation will be much easier to resolve.
So you want to get married/form a civil partnership?
You and your partner may want to consider entering into a pre-nuptial agreement which is made before your marriage or civil partnership. The agreement will set out the financial affairs during your relationship and determine the division of assets in the event of divorce or dissolution. The purpose of this agreement is to limit the potential claims on the assets of one party and to avoid costly litigation to determine who gets what.
Pre-nuptial agreements are also not legally binding but again the courts may give weight to the agreement provided certain conditions are met. If you are considering a pre-nuptial agreement then you should both obtain legal advice. Again, this may not seem the most lovey-dovey thing to be thinking about when you have just got engaged, but it is so important to set out everything in advance to avoid potential heartache and expense in the future.
In conclusion, moving in together is a very exciting time and is a big step in your relationship. It is important to remember though that purchasing a home is probably the most expensive purchase that you will make in a lifetime and therefore it is extremely important that you consider the consequences should the relationship breakdown. Cohabiting partners (who are not married) are becoming the fastest growing family dynamic and it is quite surprising that many still believe that the common law marriage exists. It does not exist. You are not entitled the same rights as a married couple which means it is even more important to consider the above options.
Laura Tuddenham
Trainee Legal Executive
FM Family Law
(nothing in this document can be construed as legal advice. Please contact us to seek advice that is bespoke to your situaiton). Please contact me on 01603 443333 for more advice.