Yes, there are potential legal implications of living together during Coronavirus lockdown if one of you is a property owner. As an unmarried couple, your claims against each other are limited as you do not have the same rights as a married couple. However, if financial or other significant contributions are made by a non-owning party to property held in the other party’s sole name, then under trust law the non-owning party may be able to make a claim.
When “lockdown” was announced, Jenny Harries, the deputy chief medical officer was asked in a press conference whether couples who lived apart could socialise under the new restrictions. Her response was that “If the two halves of a couple are currently in separate households, ideally they should stay in those households. The alternative might be that, for quite a significant period of time going forwards, they should test the strength of their relationship and decide whether one wishes to be permanently resident in another household”. This was followed up by Matt Hancock, the health secretary, who pronounced “There you go. Make your choice and stick with it”.
Faced with an unknown period of time apart, the government’s guidance no doubt (and very understandably) led to many couples asking “your place or mine?!” The result: couples across the country deciding to move in together. But how many of those couples considered the legal implications of cohabitation?
As an unmarried couple, your claims against one another are limited. You do not have the same rights as a married couple, who can claim against one another’s assets, income and pensions. You may have just breathed a great sigh of relief! However, the main type of claim for unmarried couples is in relation to property. Property owners should therefore be cautious.
These claims are made under trust law and arise, generally, where one party makes a financial or other significant contribution to a property held in the other party’s sole name. The non-owning party could suggest that the contribution gives rise to a beneficial interest in the property i.e. a share of the proceeds when it comes to be sold.
This is particularly relevant now, when many couples are facing financial pressure. Take a self-employed individual, for example. They may be struggling to make ends meet, waiting to be contacted by the government for an invite to apply online for a grant under the COVID-19 Self-employment Income Support Scheme. In the meantime, it’s business as usual for their employed partner, who is working from the comfort of the self-employed individual’s home and being paid as normal. Not wanting to see their partner stressed or worrying about money, the employed individual offers to help. “Don’t worry”, they may say, “I can help you this month by paying half of your mortgage”. A supportive, kind and generous offer, but one that could, if accepted, cause all sorts of issues further down the line, when COVID-19 passes and the legalities of that fast-tracked cohabitation are interrogated.
It isn’t just contributions towards the mortgage that home-owners should be cautious about, either. The same claims can arise in relation to maintenance or decoration. Again, particularly relevant now, with perfect home-improvement weather and individuals having time on their hands causing hardware stores across the country to struggle to keep up with demand! If works are jointly undertaken which improve the value of the property, again, a beneficial interest may arise.
The key, in all of this, is to be clear about the intention surrounding any financial contributions your partner may make towards your property. It may be that you always intended to discuss this, but the pace at which your cohabitation happened meant that this was overlooked. Communication is crucial; avoid leaving things on an uncertain footing. If you do not want your partner’s contributions to give them an interest in your property, say so. Be frank and honest. Such conversations aren’t always easy, but they need to be had.
The second tip, once you’ve had those conversations, is to formalise your intentions in a cohabitation or “living together” agreement. If drafted properly, such an agreement will minimise so far as possible the opportunity for dispute and provide a simple and clear framework as to how any dispute which may arise should be resolved. It will be of mutual benefit to both parties.
Such an agreement can record a variety of details, including who owns what at the start of the relationship, how any property acquired during the relationship will be owned and who will be responsible for the mortgage and any other property costs. A cohabitation agreement can also provide a framework for what will happen if the relationship breaks down. It can deal with, for example, how the sale proceeds of a property will be divided, who will be liable for joint debts and whether one person should support the other.
Whilst the points raised above may be news to some people reading this blog, there will be others who were already aware of the implications, but did not think these would apply given the “temporary” nature of their cohabitation. After all, when lockdown is lifted, things will go back to normal, won’t they? They may do, however the fact that your cohabitation is “temporary” does not, in itself, mean that claims will not arise.
Equally, you and your partner may decide to continue living together. By the time lockdown is lifted, you may have been living together for a number of months. Given that your cohabitation will no longer be “new” or “fresh”, you may never consider the implications of it again. However, you should. Your intentions in the long-term may be different to those when your cohabitation began as a result of COVID-19. The same rules apply; communicate any change in intention and document it with a living together agreement. Whilst hopefully there will never be a reason to interrogate the legal implications of your cohabitation, if your relationship does breakdown you will be grateful that you took the time to address matters properly.
If you would like some further advice about cohabitation, or indeed a living together agreement drafted to formalise the nature of your cohabitation during COVID-19, please do not hesitate to get in touch with a member of the Family team. It is business as usual here at Paris Smith, and our Family department are ready, albeit remotely, to assist you.
Our page “Coronavirus (COVID-19) – Legal advice and guidance” is continually being updated with advice and guidance as and when updates come in from Government or other regulatory bodies.