In recent decades, the traditional view of relationships and families has changed significantly. More and more couples are choosing to live together unmarried instead of getting married. Often also with the thought that a break-up of the relationship is less problematic and less involved than in the case of divorce. However, while this choice certainly has its advantages, it can also have considerable legal implications and uncertainties, especially in terms of financial rights and entitlements. Many people do not know this. In this article, we will focus on the compensation rights of unmarried cohabitants and the protection offered by the law. Read the full contribution here.
What are compensation rights?
Compensation rights refer to the right of a person to receive compensation for investments he or she has made in property belonging to the other partner. In the case of unmarried cohabitants, this may include, for example, the purchase of a (joint) home, home improvements, investments in joint property or financial contributions to the partner. Compensation rights can also relate to the proportion in which the cohabitants contribute to the costs of the common household.
Compensation rights are based on the idea that both partners make contributions during the relationship.These contributions can be of great value and it may be reasonable to value and compensate them when the relationship ends.
The law and compensation rights.
The Civil Code does not explicitly provide for compensation rights for unmarried cohabitants. Unlike married couples or registered partners, unmarried cohabitants do not have a legal community of property. This means that, in principle, each retains their own assets and there is no division when the relationship ends. The Civil Code does not provide the same extensive protection for unmarried cohabitants as for married couples, but there are possibilities to claim compensation rights.
The court can decide on compensation in certain cases based on reasonableness and fairness. The judge will look at the factual situation and the investments made by one of the partners. It is therefore very important to gather detailed evidence to prove the extent of the investments.
An important principle that applies in this context is the doctrine of unjust enrichment. This means that when one partner has contributed financially to, for example, the purchase or improvement of a property of the other partner, there may be unjust enrichment if this investment is not compensated. In such cases, the partner who contributed can claim compensation.
Another possible protection is based on agreements made between partners. It is wise to draw up a cohabitation contract that sets out agreements on financial contributions to household costs, the division of property and debts, and on compensation rights. While such contracts do not automatically guarantee compensation rights, they can serve as proof of intent and expectations in case of disputes.
In addition, unmarried cohabitants can use alternative solutions, such as establishing usufruct to protect the interests of both partners.
Advice for unmarried cohabitants.
Although there is limited protection for unmarried cohabitants within the legislation, it is advisable to take precautions to avoid possible conflicts and safeguard compensation rights:
- Draw up a cohabitation contract: In it, partners can agree on financial contributions, property rights and any reciprocal compensation in case of termination of the relationship.
- Document financial contributions: Keep careful records of the financial contributions both partners make to (joint) property, especially when buying or improving a home.
- Consider alternative legal instruments: Consult a specialised lawyer to discuss whether establishing usufruct is an appropriate solution to protect compensation rights.
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Conclusion
Although unmarried cohabitants in the Netherlands do not enjoy the same extensive legal protection as married couples, the current legal system does offer opportunities to claim compensation rights. However, drawing up a cohabitation contract is the best way to secure compensation rights. It is advisable to seek professional legal advice from a specialised family law lawyer to take the right steps and protect your interests.
Please feel free to contact Ms Angelique van den Eshoff, specialised family law lawyer at SPEE lawyers & mediation, for expert advice and support in drafting a proper cohabitation contract or for assistance with dissolution if your cohabitation has gone awry. Angelique van den Eshoff also specialises in situations in which one or both partners have a business.