When you first decide to start living together and want to buy a property, romance is top on the agenda. The last thing on your mind is the legal aspects of living together. You can’t imagine not being together and, anyway, won’t you have automatic rights to the property?
But this isn’t always the case. You may think that couples living together have the same rights as married couples and that the law will protect you financially as you’re a ‘common law spouse’, but you have no financial rights if you separate or one of you dies.
So, when you decide to buy a property with your partner (in England and Wales), make sure that your conveyancing solicitor discusses with you, at the outset, whether you should own the property as ‘joint tenants’ or ‘tenants in common’. For cohabitees, the distinction is extremely important.
Joint tenants
If you own the property as joint tenants, this means that you will each have an equal interest in the property and if one of you dies before the other, the share of the person who has died will pass automatically to the other.
With a joint tenancy, even if you, or your partner, have made a will, the surviving partner will still receive their share of the property, whatever the will says. If neither of you have made a will and one of you dies ‘intestate’, which means that the assets will be distributed according to the ‘law of intestacy’, the surviving partner will still inherit the property.
You can find out more about the law of intestacy and making a will here.
But, apart from the property, you, as a cohabitee, will have no automatic rights to any of your partner’s other assets should they die. This is why it’s vital that you make a will.
Find out about the risk you take if you’re part of an unmarried couple and haven’t made a will or you can stop worrying and make a will today here.
Tenants in common
If you’re living together and owning the property as tenants in common, you don’t necessarily have equal shares. You may think this is appropriate if you have made unequal contributions towards the purchase price and want this to be reflected on the sale of the property.
Owning a property under a tenancy in common also means that your shares are separate from each other, which means that if one of you dies before the other, the share of the person who has died doesn’t pass automatically to the other, but instead passes according to the wishes of the Will the deceased partner made or the law of intestacy, as appropriate.
You can find out more about the law of intestacy and making a will here.
If you intend to hold the property as tenants in common, you should discuss with your conveyancer whether you should enter into a trust deed. They can draft one for you. This is a binding agreement regarding your property, valid in England and Wales, which means that you can regulate what will happen to the property in the event that you separate (e.g. on what terms one of you can be bought out).
Cohabitation in Scotland
In Scotland, the concepts of ‘joint tenants’ and ‘tenants in common’ don’t apply, although the law is similar. A couple living together can hold a property in joint names by stating in the title deed (using a survivorship clause) that each of them will leave the property to the other if one of them dies.
As with a joint tenancy in England and Wales, if the title deed includes this clause and one of you dies, the deceased’s share will pass to the other under this ‘survivorship destination’ in the title deed and not according to the will the deceased partner made, or the law of intestacy.
The survivorship clause is, in effect, a contract between you and you cannot revoke it unless you both agree, although if you are married, the survivorship clause has no effect if your marriage ends in divorce or is annulled.
But you can do so if there is a clause in the title deed which allows one of you to do this without the other’s consent. So it’s important to discuss the matter with each other and make it quite clear to a solicitor what type of survivorship clause you want.
Alternatively, cohabitees can hold a property in joint names without a survivorship clause in the title deed (similar to ‘tenants in common’ in England and Wales). You don’t have to have equal shares and if one of you dies, the deceased’s share doesn’t automatically pass to the other as survivor, but passes according to the wishes of the deceased’s Will or the law of intestacy, if your partner hasn’t made a will.
