You pay all the mortgage and still lose half your house!

Cohabiting couples are often very hazy about their financial arrangements - as one woman found to her cost when her former partner won a share of her house even though they'd been separated for 17 years, Sarah Perkins explains the problems.

Everything seem rosy when couples move in together and of course we like to believe it will remain that way.

Unfortunately, the reality can often be a very different story and a case before the Court of Appeal highlights the problems that can arise.

It involved a couple who bought a house in 1985 in joint names. The woman had provided the deposit and the mortgage payments were shared.

The man moved out in 1993 when the couple separated. The woman remained in the house with their two children and made all the mortgage payments herself.

Twelve years later, the man asked for his share of the property. The woman responded by saying it was her home. She had paid the mortgage and maintenance bills so how could it not be hers? The court eventually decided on a 90/10 split in her favor as a way of recognising that although she had paid the lion's share, the man had also contributed a little for the first few years.

However, that ruling has now been overturned by the Court pf Appeal. It held that the property had been bought in joint names. That had created joint beneficial interests and the couple had not done anything to change that when they separated.

The passage of time alone was not enough to displace the man's claim to a half share, even though the woman had settled all the bills.

If the couple had intended that his interest should diminish after separation then they should have taken steps to make that happen. They did not do so.

The court added the advice the couples buying a home together should consider what would happen if they were to separate.

It's not entirely surprising that in the rush to get out of a failed relationship, cohabiting couples may cut corners to reach an early settlement. Unfortunately, overlooking the legal details can cause heartache and prove very costly further down the line.

For more information please contact Sarah Perkins on 0115 988 6718.