Buying a house together but unmarried? Read this first

Buying a house together but unmarried? Read this first

If your relationship is solid, you may want to buy a house with your partner. If you are buying a house together but you’re not married, there are a few things that are worth knowing.

What is ‘common law’ marriage?

In this context, there is no such thing as ‘common law’ marriage. An unmarried couple that lives together is legally considered to be cohabiting. The period of time they have lived together makes no difference to this status.

What’s the difference between cohabiting and marriage?

If you are buying a property together, it is important to make the distinction between a marriage or civil partnership and a cohabiting arrangement. This is because they’re treated differently by the courts if there is a breakup.

Marriage or civil partnership breakdown

If a marriage breaks down, the courts will look at the total assets of the marriage. They will distribute them between the married couple in a way that is fair and reasonable depending on your circumstances.

Cohabiting breakdown

When a cohabiting couple breaks down the courts will look at the ownership of assets. If the property is in one name only, that cohabitee is considered to be the sole owner. The time spent in the property by the other cohabitee makes no difference to who gets the property.

Are there any other circumstances when this applies?

Yes. In the unfortunate event of the death of a partner, a cohabitee could end up homeless.

If this happens to a married couple, the surviving spouse will have a stronger case for being awarded the family home, even if their spouse dies without a will.

What should cohabitees do?

If you are thinking about buying a house together but you are not married, it’s important to protect yourself legally. There are a number of legal agreements you should consider.

Cohabitation agreement

A cohabitation agreement is a legal document that outlines the ownership of assets. Such assets can include property, jointly owned savings, life insurance, pensions and even pets.

The agreement also covers the financial responsibilities of both parties involved and describes how assets will be distributed in the event of a breakup.

You can even stipulate what you want to happen to your share of the assets in the event of your death.

In some cases, this type of agreement is worth having even if you are not buying a property together.

Joint ownership agreement

You use this agreement when you are buying a house together but you are not married. There are two types of joint ownership:

  • Joint Tenants – the property is owned jointly so the ‘rule of survivorship’ applies. So if one partner dies, the other automatically inherits their partner’s share of the property.
  • Tenants in Common – the property ownership is completely separate and the ‘rule of survivorship’ does not apply. So if one partner dies, their share doesn’t necessarily go to the surviving partner. It could go to a named person in their will, or someone else, such as a son or daughter, could inherit.

Declaration of Trust or Deed of Trust

This is a legal agreement that outlines the financial interest in the property held by both parties. This can be used if you are contributing different amounts towards the purchase of a property.

This is also useful if a third party has an interest in the property. So for example, if a cohabiting couple is buying a property but one of them gets a loan from their parents to put towards the deposit.

Take home

If you are thinking about buying a house together but you are not married, communication is key. You really need to make sure you are on the same page. Have a frank and honest decision about what you both want.

Further information is available from Citizens Advice.

If you are looking for a mortgage, read our complete guide to mortgages.

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