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Advice for cohabitating couples entering the property market

Buying a home will be the single biggest investment of your life, and more commonly cohabitating couples are taking that plunge into the property market together.

For married couples or those in a civil partnership, each person has equal rights to the property no matter who bought it, who pays the mortgage or who maintains it.

For cohabiting couples it is not that straightforward.

If the property is owned by one of the couple, it has to be decided whether their partner has an interest in the property – because they contribute to the mortgage, or because they pay for building work, for example.

However, if these contributions are not set out in a declaration-of-trust agreement then the partner who does not own the property could find they have no rights to a share of the home if the relationship breaks down.

Similarly, cohabitors buying a home together should make sure they use the right legal structure so the property passes automatically to the surviving partner in the event of death.

Many issues may arise if the relationship breaks down; Does the deposit money need to be paid back to a third party?
What happens of one person has contributed more to the purchase price or deposit?
Did one partner pay extra for home improvements?

Where couples are planning on living together “equally”, a pre-cohabitation agreement may not seem necessary, but issues such as when a house will be sold and who will get to buy out who if the relationship ends are incredibly important.

It is very easy for one former cohabitant to hold the other to ransom over the sale or transfer of a property where the relationship ends on bad terms and one wishes to unfairly castigate the other.

Because of the wide range of scenarios and the discretionary nature of the rights of cohabitants, specific advice is recommended. Trust between a couple buying a property to live together is, of course, crucial, but don’t leave matters to the unexpected.

Always rest assured, the McGale Kelly team are only a phone call away offering advice and information on all matters relating to buying and selling residential property.

For further information please give us a call on 028 8224 3621 or email: info@mcgalekelly.co.uk

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