Unmarried and buying a home together? Questions to consider

Yasmin Khan-Gunns, Associate in BLM’s London Family Law department, sets out an important checklist for co-habiting couples to consider before purchasing a home together. In her view, the answers to the following questions should be set out in a cohabitation agreement. The problem is, cohabitation agreements seem to have fallen under the radar as many people do not know they exist. Yasmin suggests that this could change if property lawyers explained the importance of entering into a cohabitation agreement to buyers at the outset of their instructions.

  1. The home
  • Will the home be purchased in a sole name or joint names? 
  • If the home is purchased in joint names, will it be held as Joint Tenants or Tenants in Common?
  • Will you have a Declaration of Trust recording the finer details of how the home is held?
  • What happens to the home if one person passes away while living together? 
  • If you stop living together, will the home be sold or will one person buy the other out?
  • If there is a buy-out, how will this be calculated and when will the leaving party be removed from the mortgage?
  • If there is a sale, how will you agree the value of the home and how will it be sold? Who will pay for the incidental costs of sale and how will the net equity be divided?
  1. Contents and personal possessions
  • What items in the home will you own together and consider ‘joint property’? 
  • What items in the home will you own separately and consider ‘separate property’?
  • How will the joint and separate property be dealt with if you stop living together?
  1. Bank accounts
  • Will you maintain separate or joint bank accounts?
  • What will happen to the monies in any joint bank account if you stop living together? 
  • What will happen to any liability for any overdraft if you stop living together?
  1. Household expenses

This includes and is not limited to mortgage payments, ground rent and service charge (if applicable), utilities, council tax, building and contents insurance, telephone and internet, repairs, improvements, internal and external decoration, television licence, boiler servicing, fire and alarm servicing, food and gardening.

  • Who will pay the household expenses or in what proportions will they be split?
  • Will you open a joint account to meet these expenses?
  • Will there be an overdraft facility on the joint account?
  • Will the joint account need both of your signatures or a single signature?
  • Who or in what proportions will the household expenses be split if one person moves out until the home is sold or there is a buy-out?
  1. Pets
  • Who will the pet be registered to?
  • Who will pay the pet expenses or in what proportions will they be split? This includes and is not limited to food, grooming, insurance, microchipping, vet bills, vet care, equipment and toys. PDSA estimates that a dog could cost you £30,800 over its whole lifetime and a cat could cost you at least £12,000.
  • What will happen to the pet if you stop living together? 

Cohabitation agreement

To avoid any misunderstandings or future disputes, it is sensible to record the answers to the above questions in a document known as a ‘cohabitation agreement’. A cohabitation agreement records arrangements between two or more people who have agreed to live together as a couple or otherwise and records what happens in the event that cohabitation ends.

A cohabitation agreement can be drawn up at any time, before or after cohabitation has begun, although the sooner the better.

Peter Klim, Partner in BLM’s London property department comments:

“A Declaration of Trust can be useful in recording the initial contributions to the purchase of the property and how the proceeds of sale will be distributed. It can take into account who pays the mortgage and any increase in value as a result of improvements paid for by a party. Cohabitation agreements, also called ‘living together’ agreements, tend to be more comprehensive than a Declaration of Trust.”

For more information on cohabitation agreements or any other related matters, contact a member of our Family Law team who will be happy to assist.

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