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How this costly dispute underlines the importance of a cohabitation agreement

An unmarried couple who failed to set out in writing how the family home was to be divided if they split, have had their fate decided by a county court judge.

Kim Springall argued that the £1.5 million property purchased near Croydon in 2007 was all hers. She said it had been put in her sole name to give her, and the couple's three children, financial security.

However, her former partner, Gary Paice, insisted he had paid hundreds of thousands towards the purchase of the five-bedroomed house and should receive half the profits when it was sold.

Judge Richard Roberts, after considering all the evidence, ruled in Mr Paice's favour ordering that he should get half the value of the home. He also ordered Ms Springall to pay more than £50,000 in legal costs.

Sharing equity - make it clear in writing

This case shows just how important it is for unmarried partners buying property together to make it crystal clear, in writing, how they wish to share the equity if their relationship breaks down.

Steps that can be taken to avoid a costly and stressful dispute include:

  • Taking out a Cohabitation Agreement;
  • Drawing up a Declaration of Trust;
  • Registering the property in joint names.

Background to this case

The couple, who had previously invested in property together, had been together for 32 years but never married.

After the break-up of their relationship, they carried on living together for three years as they fought each other for ownership of the home they'd shared.

Unable to agree who got what, the court had to adjudicate.

Judge Roberts examined objective evidence, like bank statements, mortgage agreements and emails, and listened to the oral evidence of Ms Springall and Mr Paice, before coming to his decision.

In doing so, he said: "I accept Mr Paice's explanation for why the property was purchased in Ms Springall's sole name. I find that Mr Paice has provided on the balance of probabilities that the parties intended that he was to have a beneficial share in (the house)….because there is independent evidence supporting his case."

Confirming that the sale profits should be split between the couple, he added: "I hope the parties can somehow try and agree this without coming back to court because I am concerned there will be literally nothing left."

Sensible steps

When it comes to buying a property together, cohabiting couples currently don't have the same automatic legal rights as married couples.

But there are sensible steps you can take to protect yourself legally and financially.

Cohabitation agreements

A Cohabitation Agreement is an uncomplicated way of making sure you both know where you stand - who owns and owes what and in what proportions, what financial arrangements you have decided to make while living together and how property assets and income should be divided if you split up.

It can be as detailed as you want, covering contents, personal belongings, savings, pets and how much each of you contributed to the mortgage deposit and subsequent payments.

Read our legal guide on cohabitation agreements or "no nups".

A Declaration of Trust

A Cohabitation Agreement often incorporates a Declaration of Trust, a binding agreement which confirms in black and white exactly what share of the property you each own, how the proceeds of sale will be divided if the property is sold as well as things like who is going to pay the mortgage and in what proportions.

A Declaration of Trust is also useful if you are buying a home with someone you're not in a relationship with - a friend, a sibling, a parent or grandparent. Again, it is best to get the legal side of things crystal clear from the outset.

Making a Will

Making a Will and keeping your Will up to date is always a good idea but when you are cohabiting, it's vital. Unlike married couples, as a cohabitee you don't have an automatic right to your partner's estate if one of you dies without leaving a Will. Addressing this is key - drawing up a legal document which sets out exactly what you want to happen if one of you dies.

Read why should you make or revise your Will?

For expert advice, please contact Wards Solicitors' Cohabitation specialist, Lucia Mills, who is highly recommended in the independent Legal 500 Guide 2019 for going 'beyond the call of duty' for her clients.

As well as providing advice on setting up a cohabitation agreement or declaration of trust, she can also help if things go wrong and these are not in place. In the event of a relationship breakdown, she will always do everything possible to help resolve differences by negotiation, mediation or as a last resort, going to court.