Cohabitation and co-ownership of property by unmarried couples is now common place. The consequences of such a relationship breaking down does not however necessarily come within the jurisdiction of the family court, especially if there are no children. Despite common misconceptions, there is no statutory regime to deal with the rights of cohabitants and the financial consequences of home share breakdown. Unmarried couples do not have the same rights as a married couple. The reality of the legal position is in fact very different, with a cohabitant having no right to financial support and sometimes no right to the shared property. Cohabitants often have to rely on strict contractual and property law principles.
The most common questions to be resolved between former cohabitants are what share of the property they own, whether they can realise that share and whether they can force a sale of the property. When it comes to determining how a property should be shared, the law will however generally take a ‘who put what in’ kind of approach, rather than the ‘who needs what’ approach often taken by family law.
The starting point in determining what, if any, share of the property a former cohabitant is entitled to, is to consider the way in which it is owned.
Where cohabitants co-own property, they will usually do so as either Joint Tenants or as Tenants in Common.
As Joint Tenants, the co-owners will each have an equal right to possession and they will not own any distinct share in the property. Their respective shares will be presumed equal and, if one of the Joint Tenants dies, then their share of the property will automatically pass to the surviving Joint Tenant. This is known as the right of survivorship.
As Tenants in Common, although the co-owners will still own the legal estate jointly and each have an equal right to possession, they may hold the property in distinct shares. The key practical difference however is that the right of survivorship does not apply. If one of the Tenants in Common were to die, then their share of the property would pass under their Will or intestacy. It would not automatically pass to the survivor. For this reason, on the breakdown of the relationship, a cohabitant may want to consider severing a joint tenancy to a tenancy at common to ensure that the property will no longer pass to their former cohabitant on their death.
Either way, it is always important to check whether an express declaration of trust was given as to the nature and extent of the co-owners shares in the property, usually referred to as their beneficial interests. If such a declaration was given, then it is conclusive in the absence of fraud, mistake or subsequent agreement. If no express declaration was given, then the law in any event presumes that the property is held in equal shares. This presumption may however be rebutted by evidence to the contrary, as explained below.
Where the property is held in the name of one of the cohabitants, then on the face of it that cohabitant is the sole legal and beneficial owner and they are free to deal with the property as they see fit. In these circumstances, the other cohabitant may have no right to possession and no interest in the property at all. The burden will be on that cohabitant to try to establish a share in the property by proving a Resulting and/ or Constructive Trust. Indeed, a similar approach may have to be taken in cases where a property is jointly owned but without an express declaration of trust and one of the co-owners wants to rebut the presumption of equal shares.
In short, it will be necessary to show that there was an express or implied common intention either at the date of purchase or some time thereafter, that the property was to be jointly held in certain shares and that intention was relied on causing detriment. Such a common intention could have been expressed orally or could be inferred from the couples’ conduct. A cohabitant could have relied on such an agreement or understanding to their detriment by contributing to the purchase price or by directly or indirectly contributing to the mortgage repayments or to the costs of certain improvements to the property itself.
If, notwithstanding the way in which a property is owned, there is sufficient evidence of a contrary intention, then it may be determined that a cohabitant acquired an interest or that any presumed shares should be varied. That said, if the exact intention cannot be ascertained, then an equitable accounting exercise may be undertaken to try to quantify what the cohabitants’ shares should be. In so doing, detailed consideration may be given to the nature and extent of the financial contributions made by each of the former cohabitants to the property. The Court may then impose such shares in the property as it considers fair having regard to the whole course of dealings.
Trusts of Land and Appointment of Trustees Act 1996:
If co-owners and/ or former cohabitants are unable to reach an agreement about their respective shares in the property and how the same should be dealt with, then they may ultimately have to bring a claim to the County Court under the Trusts of Land and Appointment of Trustees Act 1996 (‘TLATA’).
The Court can be asked to determine the nature and extent of the interests and/ or to direct that the property is sold. Such cases can be complex, time-consuming and costly, especially where there is no express declaration of trust for a jointly owned property or where a party is seeking to establish an interest in a property solely owned by their former cohabitant. Each case will after all turn on its own facts. This is why when agreeing to acquire or own property together, it is always important to carefully consider how exactly it will be held, to have an express declaration of trust setting out clearly the intentions and to keep that declaration up to date and to vary it in the event of any relevant changes to the circumstances.
If there is a child, or children, from the relationship, then it may also be possible to ask the Court to preserve the property as a home for their welfare under the Children Act 1989. This is however another topic requiring different considerations and separate proceedings within the family jurisdiction.
If you require advice about your property interests, whether as a cohabitant, a co-owner or otherwise, then our Associate Solicitor, Stephen Rogers, who specialises in Property Litigation, should be able to help you. If you require assistance with such matters, then please do not hesitate to contact T G Baynes on 0208 301 7777 or alternatively e-mail firstname.lastname@example.org
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