Property ownership and cohabitation

What happens if you do not have a Cohabitation Agreement and you want to sell your home?

If you are unmarried and live in a house with your partner what rights do you have if a sale is sought?

Sale of your House by your Cohabitant

If the property is in joint names, even if you have made little contribution to its purchase or the mortgage or maintenance, you will be entitled to a half share.

If you have no legal or beneficial entitlement, that is you are not mentioned on the deeds or the mortgage but have been promised a share by your partner (especially if this is in writing) then you would be entitled to at least the amount your partner promised you providing there is evidence of this.

If you have contributed to the purchase of the property, the mortgage or maintenance or there is evidence of a direct financial contribution, you may have a claim.

If you are parents of children under the age of 18 who are living in the property and there is no alternative accommodation and you have decided to separate, it may be that one parent and the child or children may be permitted to occupy the property until the children are adults. In these special circumstances, the other parent could be excluded from his, or her, own property.

This can be a complex area of law. If it affects you please speak to a member of our Family Team for advice.

Joint Ownership on Death or Separation

If you are the joint owner of a property with another person or persons it is probable that you will own as a “joint tenant”. In this context, the word “tenant” actually relates to ownership and is nothing to do with leases.

Ownership of land by two or more people as joint tenants means that they each own the property as a whole; they do not own shares in it but individually own it all. So,  on the death of one joint tenant, his or her joint tenancy in the land passes to the other joint tenant or tenants under what is know as the survivorship rule.

Most married couples and many cohabitees own properties as joint tenants and therefore should one die, the property will automatically be owned outright by the survivor. The property does not pass into the Estate of the deceased. This will apply even if the deceased person has made a Will leaving his or her share to somebody other than the other joint owner as the survivorship rule overrides the Will in respect of the property.

Severance of Joint Tenancy

It is possible to “sever” the joint tenancy of the property, and this is a step that is often taken when relationships break down but may also be taken in order to allow the owners to effectively tax plan depending on their other assets and to protect the property from local authority clawback in respect of residential care fees.

The effect of the severance is to convert the ownership of the property from joint tenants to “tenants in common” If you hold as a tenant in common then your share of the property forms part of your estate and it is, therefore, possible to leave one’s interest in a jointly owned property by Will. As it is part of your estate it will not pass automatically to your co-owner but will pass either under the terms of your Will or if you have not made a Will then it will pass under the Intestacy Rules.

The disadvantage of holding as tenants in common is that if your co-owner dies first, his/her share will pass to the person to whom he has bequeathed his/her interest by Will or to whoever is entitled under the Intestacy Rules. This may adversely affect the continued ownership of the surviving co-owner as they could, for example, be forced to sell the property against their wishes. However, you hold the property it is vital that as a property owner you make a Will setting out your intentions and instructions in respect of that property.

This becomes even more important if you hold as a tenant in common. For Wills advice visit our Wills and Probate department pages.

As to the value of each party’s share, it is usually 50% although this is not always the case. Ideally, both parties will agree on the percentage shares held although this is not always the case and is unlikely in a relationship breakdown situation. Establishing a share in the property of greater than 50% can be difficult and will need to be backed by clear and consistent evidence.

Joint Ownership is a complex and important topic and the consequences can be severe if the correct action is not taken. Before making a decision as to how to hold the property or to change the way the property is held we would strongly suggest that detailed advice is taken in respect of both methods of ownership in order that you may make an appropriate and informed decision.