Co-habitants rights and the Family Law (Scotland) Act 2006
Your property rights are affected by your lack of marital status
Recent generations have brought major changes in the way families are formed with greater predominance of non-married couples looking to purchase a property together. With the introduction of the Family Law (Scotland) Act 2006 new rights were introduced to protect cohabitants when their relationship breaks down or one partner dies.
Common law marriage does not exist in Scotland
It is a common misunderstanding that a couple will have established a "common law marriage" after living together for a period of time. This is not the case. Common law marriage does not exist in Scotland.
Even if you lived with your partner for many years, you do not have the same rights as a married person or those in civil partnerships.
Cohabitants' rights
The basic rights as set out by the 2006 Act are described below:
- Where couples who have bought goods during the time the couple lived together cannot agree who owns them the law will assume that you both own them jointly and must share it or share what it is worth.
- There will be an equal share in money derived from an allowance made by one or either couple for household expenses and/or most property bought out of that money. It is important to understand that this does not apply to the house that the couple live in.
- As a result of the decisions the couple made together during the relationship, where one partner has been financially disadvantaged the court can be asked to look at the effect that decision had on that partners' ability to earn money during the relationship.
- Co-habiting partners have a right to apply to the court for an award from the estate (property) if their partner dies without leaving a will. If the deceased partner was still married at the time of death, the spouse will still be legally entitled to a share of the estate.
These are not the same as the responsibilities and rights that a couple have if they get married or register their civil partnership.
Unless you understand the importance of making a will your share of the house may not go to the person you want it to.
The importance of making a will
The court now has the power to make an award to a cohabitant.
If you own a house with someone else, then it may be necessary for you to state in your will what is to happen to your share of the house after your death. Otherwise, your share of the house may not go to the person you want it to go to.
At ESPC we recommend to clients who do not have a will that they speak to their solicitor about putting one in place.
Cohabitation agreements and pre-nuptials
Cohabitation agreements (or a pre-nuptial marriage contract or pre-civil partnership contract) have always been advisable where two people buy a house together in joint names. It may well be that in some cases people will not be making an equal contribution to their purchase price and running costs of the house.
In the absence of a cohabitation agreement the other party can require that the house is sold and the net free proceeds of the sale would automatically fall to be divided equally between them except in exceptional circumstances.
Greater contributions do not guarantee a higher share
Even in exceptional circumstances, the individual who contributed more towards the purchase, running or improvement costs is more than likely to face a difficult and costly court battle, with no guarantee of success, in order to redress the differing balance of contributions made.
A cohabitation agreement can ensure that in the event of the breakdown of the relationship, not only are the day to day living costs regulated, but the ultimate fate of the house and the division of the proceeds of the sale (and any other joint assets) is agreed in advance.
Making a will or having a clause within your cohabitation agreement can also protect against claims made following the death of one party.
Parties purchasing a property, but not in a relationship
In the circumstances where a group of friends purchase a property together problems could arise if someone leaves the property and wants their monetary share or if one of the parties dies.
Their solicitor should draw up a will and what is known as a Minute of Agreement. This agreement once put in place would deal with what was to happen should one of the parties leave the property or die, in advance of these events occurring.
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