A House of Lords judgement that property owned jointly by unmarried couples should be split equally unless one party can prove to have a higher ‘beneficial interest' in the asset is a ‘welcome clarification' for cohabitees, says Advicenow.
The House of Lords ruled in the case of Stack Vs Dowden, Ms Dowden should receive 65% of the sale proceeds of the family home, rather than 50% as she had contributed more to the purchase of the house.
Although the judges admitted the case was an unusual one as both parties had kept their financial affairs “rigidly separate” the ruling has provided clarification for unmarried couples in general.
Mary Webber, cohabitation expert for the LivingTogether campaign run by Advicenow, welcomes the ruling by the Law Lords as she says it provides clarification that where a couple own a house in joint names there should be a presumption that they own it equally.
She adds: “More and more unmarried couples are choosing to buy property together, but many don't really discuss what the implications are. If you are buying a property with your partner, it is crucial you discuss what contributions you will each make, whether you will consider these equal, and what that means for how you own the property.“
Otherwise she says like many couples, people could find that 10 or 20 years later when they split up, each person has a very different understanding of what the situation is, and what each is entitled to.
She adds: “What today's judgement means for couples who own together is that if you have both names on the deeds but don't consider your contributions to be equal, you need to get a Declaration of Trust drawn up.”
“There are a number of simple steps that unmarried couples can take to protect their interests in the home - whether it is rented or owned - which can help to minimise stress and avoid costly legal expenses in the event of a break-up.”
The judgement follows a decision by the Law Commission in September last year to look at the rights of unmarried couples, which included proposals to combat the myth of ‘common law marriage’ by granting cohabitees with children the same rights as married couples.
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