Cohabitation and Property Disputes
There are a number of important factors to consider when deciding whether to cohabit in a jointly owned property. Before purchasing a property in joint names with a partner, it is well worth considering what the basis of your joint ownership will be. Complications can arise if this is not considered at the time of purchase, particularly where one party has contributed more capital or paid more of the mortgage repayments than the other party. In circumstances such as these, it is sensible to enter into a Cohabitation Agreement stating what the basis of ownership will be, the contributions that you have each made to the purchase of the property and how you will each contribute to the mortgage repayments and bills on an ongoing basis. A Cohabitation Agreement can set this out and give a clear account of what your intentions are as to how those contributions would be reflected in the event of a relationship breakdown.
This will save a significant amount of time and costs where joint property is held by cohabitees and their relationship breaks down. If this has not been considered from the outset of the joint ownership, it becomes necessary to unravel what the parties intentions were when the property was purchased, what their respective contributions have been towards the purchase and what the ongoing contributions have been towards the mortgage repayments and bills during the period of ownership. Any claims as to the parties’ intentions about ownership and their contributions towards the property need to be backed up with evidence to include not only each respective party’s oral evidence but written evidence in the form of bank statements, credit card statements, mortgage redemption statements, receipted bills etc.
If these matters cannot be agreed and the division of the proceeds of sale is in dispute, it is open for either of the joint owners to commence proceedings under the Trusts of Land and Appointment of Trustees Act 1996. Under that Act, the Court has the power to make a declaration as to ownership and to make an Order for sale of the property. The time and expense of dealing with all of this can be saved by considering the terms under which you intend to enter into joint ownership from the outset.
If you would like further information about Cohabitation Agreements/disputes arising from a relationship breakdown, please contact Patrick Hart or Simon McKirgan by email or by telephone on 020 7583 2222.
