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Sensible Cohabitees Always See a Lawyer before Buying Property Together

houseDespite any number of cautionary tales appearing in the press and elsewhere, many unmarried cohabitees unwisely persist in buying properties together without taking legal advice. In one case, a woman found out the hard way how difficult it can be to prove your rights if your name is not on the title deeds.

The woman used her only capital resource – £30,000 from the sale of her home – in order to reduce the mortgage on a house that was in her partner’s sole name. She said that it was understood from the outset that the property would be used as a family home for herself, her partner and her two children and that she would receive a stake in the property in return for her investment.

After the relationship broke down, the former couple had no option but to continue living in the property as separate individuals. The man, who carried out a great deal of work to render the house habitable, insisted that the £30,000 was a short-term loan and that she had no interest in the property. They were unable to agree a resolution and the dispute was referred to the First-tier Tribunal (FTT).

The FTT noted that the ex-couple both regretted their failure to see a lawyer so that the basis on which the property was held could be formalised. The man had discouraged her from doing so on grounds of cost. Although she would have preferred a legal document to be in place, she had been prevailed upon not to insist on that after he assured her that she would be protected.

The FTT found that the man’s account of events made no real sense and preferred the woman’s clear and coherent evidence. It was, amongst other things, inherently unlikely that she would have chosen to invest the only capital that she had in a property without an expectation of owning part of it.

Directing that a restriction be placed on the house’s registered title recording the woman’s beneficial interest in it, the FTT found that that reflected the ex-couple’s common intention when the property was bought. There was insufficient evidence to determine the extent of the woman’s interest, but the FTT urged the former couple to agree a final resolution, rather than resort to further litigation.

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