Moving in together
Purchasing a home and moving in together is a cause for celebration for a couple. However, it is important to be aware that the situation could potentially become complicated in the unfortunate event that the couple subsequently breaks up. We strongly advise couples purchasing a home together to seek legal advice and enter into a co-ownership agreement at the same time that they purchase the property.
While it may seem pessimistic, it is the reality that not all relationships succeed and it is wise to have an agreement in place that will protect each party if the relationship ends. This will avoid the stress and unpleasantness that may ensue where one party wishes to sell the property while the other party does not and could avoid costly litigation where the parties cannot come to agreement.
Typically, a co-ownership agreement will set out:
a. That both parties have agreed to buy the property.
b. The total cost of the overall transaction inclusive of both the purchase price paid as well as the other costs associated with the transaction.
c. The amount of money that was borrowed (typically by way of a mortgage)
d. What proportion of the difference between the total cost of the purchase and the mortgage that each party has contributed.
e. The steps that are to be taken regarding the sale of the property should the relationship end, where one party wishes to sell the property while the other party does not.
f. The share each party will receive from the proceeds of the sale of the property.
Co-ownership agreements are not restricted to co-habiting couples and should be put in place by any persons who are purchasing a property together (for example friends or siblings) to define the legal basis of what is essentially a financial relationship between them.
Cohabiting couples should be aware that living together is no longer a legal-free zone and after a certain period of time the fact of their living together may give rise to a legal relationship under the Civil Partnership and Certain Rights and Obligations of Cohabitant’s Act, 2010. For this reason, in addition to looking at a co-ownership agreement they may also want to also take advice on the potential impact of this legislation and consider entering into a co-habitant agreement to look at not only their property rights but also some of the wider issues that may come to affect them.
As it is so common in Ireland for unmarried couples to live together, people are often surprised to discover that unlike married couples, couples who have co-habited on a long term basis without a marriage certificate have no automatic rights should the relationship break up or one partner die.
Such persons have no automatic property rights, right to occupy the home in which they have lived, right to financial support or right to inheritance should their partner die without having made a will.
The Civil Partnership and Certain Rights and Obligations of Cohabitant’s Act, 2010 now gives protection at the end of a long-term cohabiting relationship to a person who is economically dependent on the other. This economic dependency must have arisen because of the relationship.
Such a cohabitant does not have automatic rights but does have the right under the Act to seek redress from the court and obtain reliefs in respect of the other cohabitant’s property, maintenance orders, pension adjustment orders or a provision from the estate of a deceased cohabitant.
The Act encourages cohabitants to take responsibility for putting in place an agreement that will regulate their living arrangements and provide for financial matters during the relationship and should the relationship end through death or otherwise. Importantly, under Section 202 of the Act, both parties may choose to enter into an agreement that simply opts out of the provisions of the Act so that it will not apply to them. However, this will only be possible if both parties have received independent legal advice, and a written agreement is put in place that has been signed by both parties and adheres to basic contract law requirements.
In conclusion, if you are purchasing a home together having a co-ownership agreement in place may avoid potentially costly and unnecessary future litigation. It is important to also be aware that a couple who move in together could eventually come within the scope of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act, 2010 if they do not address these issues through a co-ownership agreement at the outset.
If you would like legal advice in relation to these matters, please call us on 01-6445777 or contact us here.