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Last Updated: Saturday, 28 April 2007, 13:35 GMT 14:35 UK
Property alert for unwed couples
By Paul Lewis
BBC Radio 4's Money Box

A couple walking on the beach
More and more unmarried people are choosing to live together
Couples who live together without being married or civil partners are being warned to set out who owns what.

A House of Lords judgement has decided for the first time the rights of unmarried partners to the home they share if they separate.

The ruling could affect two million cohabiting couples and anyone else who is considering moving in with someone.

Lawyers say couples should draw up a proper agreement or the value of the home could be shared out very unfairly.

The case was brought by Barry Stack who had lived with Dehra Dowden for 27 years.

The couple had four children and owned their current home jointly, though their previous home had been in Ms Dowden's sole name.

When they broke up Mr Stack claimed an equal share of the home.

Ms Dowden said she had paid for most of it and wanted 65%.

The Lords upheld her case.

Legal ownership

Jo Edwards, a family law partner with solicitors Manches, told BBC Radio 4's Money Box programme that was only because of the particular history of their finances.

The judges said the general rule must be to follow the legal ownership of the home.

Ms Edwards added: "What the House of Lords said is that where a couple are cohabiting and they own a property in joint names the starting point should be that the proceeds of sale would be divided exactly equally.

"Whereas the starting point if the property is owned in the name of one of the parties, then that party should be entitled to all the proceeds of the sale."

And she warned that could cause difficulties where one person moves into their partner's home - leaving them with no rights at all if the relationship ends.

"It could provide a fertile ground for litigation for those parties who feel they are very hard done by if that is the outcome," she said.

She said couples should own property as "tenants in common" not "joint tenants", which enables them to specify what share each owns and allows each partner to leave their share to whoever they choose.

Legal advice

Ms Edwards warned that in the light of what she called this "groundbreaking judgement", couples thinking of moving in together should see a lawyer - preferably one each.

"People should be thinking very carefully and take legal advice if they are planning to buy a property together but not get married," she said.

"They should consult a family lawyer and a good conveyancing lawyer. It is very important to have evidence of what your intentions are at the start of this process."

And she said the two million couples who currently live together without being married should consider their position.

"There's nothing to stop them at this stage setting out in a document their intentions as to how the ownership of the property would be divided between them if their relationship breaks down."

BBC Radio 4's Money Box was broadcast on Saturday, 28 April 2007 at 1204 BST.

The programme was repeated on Sunday, 29 April 2007 at 2102 BST.

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SEE ALSO
Couples warned over inheritance
07 Mar 07 |  Business
Cohabitation rights and you
07 Nov 06 |  Business
Q&A: Cohabitation rights
31 May 06 |  UK

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