Joint Property Ownership and Protecting the Rights of Unmarried Couples or Cohabitees

Historically we have seen individuals buying property together as cohabiting couples, making different contributions to the purchase price and maybe treating the property as a family home. In such circumstances couples often pool their entire resources and live together just as a married couple would. Their lives become inextricably linked on a number of different levels. They may often receive help from family members but it is sometimes difficult to gauge whether that money was to be provided for the benefit of one party or both, because at the time it was made available they were a couple.

The definition of joint home owners

The difficulties young people are now having securing a foothold on the housing ladder mean that others are looking at joint ownership. This category of joint owners will be much different. They will not be pooling their resources and will be making individual contributions. Any money provided by family will be provided for that one person alone. Each will want out of the property deal at different times – with couples it is often that they both want out when they decide to separate. The terms that need to be addressed in any agreement are completely different and arguably the agreement is more important because there is no quasi-marital relationship where resources are pooled for the years they are together and everyone loses sight of what has been contributed in real terms.

Orders for sale of jointly owned property

The litigation that will emerge from this new class of home owners will involve seeking orders for sale – one party will want to realise their interest in the property whilst it remains the other’s home. In dealing with such cases the court looks at the purpose the property was acquired in their joint names: when it is a couple it is to provide a family home; with sharers there is some difference – is it to provide a home for each of them for so long as they want to live there, or is it really a form of investment to allow them to get a foot onto the property ladder?

An agreement drawn up at the outset will assist in dealing with any eventual disagreement. It can be drafted to set out how the property will be dealt with when one of the co-owners wants to opt out and move on. That could involve an option for the others to purchase the leaving party’s share or it might be that the share can be sold to a new third party. All of this may cause complications with the lender and they will need to provide consent and accept the incoming party as a joint borrower. A Declaration of Trust to record each parties interests and division of net proceeds on a future sale is an alternative agreement to orders for sale.

This future minefield will undoubtedly be assisted by some considerable thought being given to the terms to be agreed in advance of going ahead with a joint purchase. Failure to do so may result in the first step onto the housing ladder being the slippery slope down the route of expensive litigation.

If you would like to discuss any aspect of family law, are considering divorce proceedings or a trial separation, or want to draw up a pre or post-nuptial agreement, call us in absolute confidence on 03456 381381. Alternatively, email us at familylaw@ibblaw.co.uk

IBB’s team of property solicitors can advise on all aspects of buying, selling and mortgaging property. We are always happy to speak to you about the progress of your sale/purchase on the telephone at any time. For more information or advice from our residential conveyancing solicitors in Buckinghamshire, call us today on 01494 790013 or 01494 790071 or email conveyancing@ibblaw.co.uk​.