Cohabitation agreements

This is a legal minefield. It is far better to prevent problems arising than attempt to cure them later when anxiety can lead to an unnecessary dispute. When we ask house buyers to confirm instructions, we send out a very important form which is a short questionnaire on joint ownership. If we are not instructed, the law of implied trusts can arise and that can lead to unintended consequences.

It is important that if two or more are buying a property they state what they want and we can then draft a short or detailed agreement dealing with provisions that apply on death or separation.

Some problems that have arisen

  1. We acted for an unmarried couple who had made uneven contributions (Although equal contributions would still have left a problem). The wedding day was fixed but one of the parties was killed in a motor accident. The other party inherited nothing and was left with a substantial mortgage. A Trust Deed and/or a Will would have cured this problem.
  2. Another couple contributed to their house in unequal shares. They never signed Trust Deeds. They split up and spent £25,000 on legal costs and several years arguing about their shares.
  3. An unmarried couple of high earners with two young children bought a family home in the sole name of the father. They split up. The mother had to make an application to protect her interest. She had to make an application on behalf of the children which meant that she could effectively be turned out when the children attain the age of 18.

If these are problems that we have encountered recently, imagine the other problems encountered elsewhere. Litigation must be avoided if at all possible.