30/05/2007
Umarrried couples rights when buying a home together
UNMARRIED COUPLES BEWARE WHEN BUYING YOUR HOME
Helen Barry of Watkins & Gunn explains how unmarried couples can safeguard their assets when purchasing a home together.
The case of Stack v Dowden has set an important precedent that will have huge ramifications for all co-habitees in Britain who own their homes together.
The case is a landmark ruling, showing that unmarried couples are not automatically entitled to the same rights as married couples.
There is a lack of awareness of the options available to property owners in protecting their assets. Most people opt to hold the property as joint tenants.
This means that should one party die, their share in the property automatically passes to the surviving proprietor.
There are other options; couples can hold the property as tenants in common in equal shares. This means each party would own 50% of the property and should they die they are free to leave their half of the property to whoever they wish.
Couples can also hold the property as tenants in common but can decide the percentage each individual will hold depending on their contribution.
Either option can be formalised in a Declaration of Trust. The deed can then be registered with the ownership at the property at the Land Registry.
The document signifies the intentions of both parties and formalises the amounts contributed by each.
If the parties eventually separate, the deed can then be used to divide the assets appropriately. One in six couples living together are unmarried. Whilst no one enters into a relationship expecting it to fail, it is best to be prepared for every eventuality and a Declaration of Trust will protect the assets of all involved.
Ms Dowden won a 65% share of the property, as the Courts believed she had contributed a larger amount given that she earned more than her partner Mr Stack.
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