When unmarried cohabiting partners separate, the question often arises whether they are entitled to financial compensation for investments made during the relationship. Unlike married couples and registered partners, the law does not offer specific regulations for unmarried cohabiting partners. However, under certain circumstances, they may be entitled to compensation.
What are compensation rights?
A right to compensation means that a partner is entitled to financial compensation for investments they made in the joint assets or in the other partner's personal assets during the relationship. This could be the case, for example, when one partner contributes to the purchase, renovation, or mortgage repayment of a jointly owned home, or invests in a home registered in the other partner's name.
Foundations for compensation rights for unmarried cohabitants
In May 2019, the Supreme Court ruled that compensation rights for unmarried cohabitants can be based on general property law. The following principles may be relevant:
-
Agreements between partners : If written, oral, or tacit agreements have been made regarding financial contributions, these can serve as the basis for a right to compensation. A cohabitation agreement can provide clarity in this regard.
-
Undue payment : If a partner has made a payment without a legal basis for doing so, this payment may, under certain circumstances, be reclaimed on the grounds of undue payment.
-
Unjust enrichment : If one partner has been enriched at the expense of the other without valid reason, the injured partner may claim compensation on the basis of unjust enrichment.
-
Reasonableness and fairness : Depending on the specific circumstances, the court may decide that there is a right to compensation on the basis of reasonableness and fairness.
Importance of written agreements
It is strongly recommended that unmarried cohabitants make written agreements about financial contributions and investments, for example, in a cohabitation agreement. This prevents ambiguities and legal disputes when the relationship ends. Without such agreements, it is more difficult to demonstrate a right to compensation, and the court will have to assess whether a right to compensation exists based on general property law.
Limitation of compensation rights
Please note that compensation claims between cohabiting partners generally expire five years after the claim arose. This means that the right to compensation may lapse if action is not taken in a timely manner.
Conclusion
Although unmarried cohabitants don't enjoy specific legal protections like married couples, compensation rights may arise under certain circumstances. It's essential to make clear agreements and put them in writing to avoid financial disputes when the relationship ends. If you have any doubts or questions, it's advisable to seek legal advice.
