Tuesday, 4 December 2012

Property entitlement when common law partners separate?

Question
My daughter and her partner are separating after 7 years together. They are not married.

Two years ago they bought a house together. My daughter put in £25000 from the sale of her flat, and I gave them £30000 to build an extension.

My daughter's partner brought no cash to the house purchase and the two of them have been splitting the mortgage payments equally.

He owns a flat which he rents out and he keeps all the profit.

Most of their furniture was bought by my daughter when she had her own flat.

My question relates to his cash entitlement when they split. My daughter would like to keep the house, and "buy out" her partner.

Is she entitled to exclude the £25000 and the £30000 mentioned above from the settlement?

If she offered him a refund of the monies he spent on mortgage repayments and half of the money they spent on additional furniture, would this be all he would be entitled to, or are there other cash considerations to be taken into account?

They live in Scotland.

Hope you can clarify these points. Thanking you in advance,Answer
So-called common-law partners actually have no automatic rights to each other's property, regardless of how long they've lived together, unlike married couples and civil partners. So what matters is whether your daughter and her partner have ever made any written agreements about ownership of assets and, most importantly, who's listed as owner(s) on the house deeds.

Provided your daughter is the sole owner of the house (on the deeds) then she should be in a strong position. Her partner would have no rights to the house (either ownership or to remain living in), although he might be able to claim some money in respect of his mortgage contribution - certainly a basis for negotiation.

However, if his name appears on the deed it makes things more complicated, as he legally owns a share of the house (as stipulated in the deed, probably 50%). In theory this means he could receive a share of the net proceeds were the house sold and he's under no obligation to leave meanwhile.

As for other items, those bought or acquired during the time they lived together are presumed to be owned equally - with the exception of money, investments, vehicles and pets. However, items acquired before then belong to the person who acquired them and gifts or inherited items belong to the person who received them.

In light of this, provided your daughter legally owns the house then the offer you mention sounds perfectly reasonable. If the house has appreciated since purchase (ignoring the extension) then I suppose he might have grounds for wanting some of the notional 'profit', but given the stagnant housing market in recent years I doubt this will be an issue.

If his name is on the deeds then your daughter may have a harder time reaching a fair agreement, depending on how reasonable her partner is. For example, he might try to claim a share of the deposit and extension monies.

Hopefully they can come to a fair and amicable agreement without having to get solicitors involved, else legal fees could quickly dent both their finances.

For more information the Citizen's advice Bureau has a useful guide here.

Read this Q and A at http://www.candidmoney.com/askjustin/777/property-entitlement-when-common-law-partners-separate

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