When one of my boys turned eighteen, I pulled them aside to talk about the “18 by 18 by 18 rule”. That is, for 18 minutes if pleasure, you could end up losing 18 percent of your income, for 18 years! I think his girlfriend got excited about the 18 minutes, thinking that was a long-term vision. I did this to show how the power of hormones can cause you long term hurt.
Leverage is currently dealing with two matters where couples have fallen in love and moved in together. One purchased a property with a new girlfriend only to find that she left him within three months, leaving him with the off-the-plan purchase. The other, who funded the purchase of the house, found that after two years, his girlfriend left.
People have now forgotten that you don’t need to be married to have the Family Law Act apply. All that is required is that a person has “cohabited” for up to six months, for the law to apply. Whether you are straight or LGBTIQ, this problem is real. A short-term relationship of six months whereby people essentially live in the same house, makes them a potential party to a de-facto relationship claim. This means that these short-term relationships could leave your short-term lover with a claim on your property.
It is true that we don’t choose who we are going to fall in love with. But, we need to understand that this may cause long-term hurt. If a cohabitation occurs, do something about it before the relationship goes sours. Whilst it is sweet, take the opportunity to protect yourselves against each other.
Although pre-nuptial agreements can be set aside or read down, they are accepted by the Family Law Act 1975 as being something the court must take into consideration. It also means that, solicitors acting for your former lover, will consider the binding financial agreement and usually find a way to apply it.
Just because you’re doing it, doesn’t mean you have to live together. If you find yourself living together, and one of you has been the beneficiary of somebody’s good will in assisting you buying a property together, you should enter into a binding financial agreement. Additionally, if you are a parent of a person who is being overly generous, this is when you need to step in and advise about such protections.
In the old days, we would wait until we were married, before we bought a house. This is now considered somewhat quaint; it is out of fashion. It does not reflect the realty of our modern world. Nevertheless, “the old ways” have some genuine legal merit – in that, you shouldn’t think about purchasing property together, until you are long-term committed.
It is always worth having a binding financial agreement, perhaps designed for a short period, until you can test your commitment to each other. One couple for whom we drafted a binding financial agreement, some years ago, had it terminated on their wedding day. They have remained married since that time and they believe that being financially “honest” with each other, early in their relationship, has helped form the solid basis for their ongoing, long-term commitment to each other.
At Leverage we say that, “we are passionate about property and the people in it”. You should sometimes, however, harness your passion, so that your property asset is protected.
This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.
To get in touch with Bailey, please email firstname.lastname@example.org