In two previous blogs, my colleagues Nia Jameson and Christian Butler have written about what happens to property when married couples or civil partners separate. In this blog I focus on the property rights of unmarried couples.
Firstly, it is essential to note that there is a significant difference in how unmarried couples are treated in law to married couples when a relationship ends.
Whereas for married couples, the Court is concerned to ensure that the outcome is fair having regard to all of the circumstances of the case including the duration of the parties marriage, their financial needs, contributions etc, there is no such duty where the couple are unmarried.
When advising an unmarried client of this, they are often astonished by how few rights they have.
In particular, I have come across countless occasions when clients believed that they had rights as the ‘common law spouse’. There appears to be a trend whereby couples believe that they somehow acquire rights if they have been in a relationship and living together for two years or more.
The sad reality is that the law as it currently stands, offers scant protection for a person who has been living with a partner –sometimes for many years – without being an owner of that property.
By way of example, if a couple lived together for 30 years, and during that time have children and grandchildren, if the property is held in the sole name of one of them, the other has no rights whatsoever in the event that the relationship ends. This means:
- No property rights at all – the non-owning partner cannot insist that the property is sold or for them to receive a ‘fair share’ of the equity.
- They are not entitled to any share of their ex-partner’s pension.
- They are not entitled to any financial support by way of maintenance.
Where a property is owned in the parties’ joint names, then they enjoy the exact same property rights as each other. In other words, unless it is specifically stated otherwise, they will own the property in 50/50 shares. Sometimes there can be a Declaration of Trust which sets out the shares that each party intends to have e.g. 60/40, 2/3, 1/3 etc. However that must be a conscious decision taken by the couple themselves and must be evidenced in writing and signed by both of them.
The difficulties always occur where a property is held in one party’s sole name. As indicated above, all too often, the ‘non-owing’ party has no rights in respect if that property whatsoever. There are some remedies which may be available. However but in order to establish any financial stake in another person’s property, it is necessary to look at a complex area of law known as equity.
In limited circumstances, even if a property is registered in one party’s sole name, the Court can provide an ‘equitable remedy’ to the other party to do fairness. However, this is not based on need or entitlement (as with divorce). Instead, it is based on principles which have been developed by the Courts over many years.
In order to establish an equitable remedy, there is usually a need to show that:
- There was a common intention to share ownership (even if the property was registered in one person’s sole name).
- The non-owning party must have acted upon that common intention to share to their detriment – this is usually by making a financial contribution toward the purchase price via mortgage payments, significant home improvements such as building an extension, payment for landscaping, double glazing etc. However, paying for decorating etc will fall short of this.
Assuming that one can establish these principles, it will then be necessary to establish what the share should be. Once again, the Court will not impose what the Court believes to be fair having regard to need. Instead, it is the Court’s job to try to establish what shares the parties themselves intended either by way of direct evidence or by inferring what their intentions were from their conduct or even imputing an intention (even if the parties themselves had not stopped to think about what their shares should be!).
In other words, cases of this nature are extremely difficult to resolve as firstly it is necessary to prove that the non-owning party has a financial stake in the other’s property and secondly it is necessary to establish what the percentage shares actually are intended to be.
It goes without saying that there are no clear guidelines whatsoever to assist the parties, or indeed their lawyers, in arriving at the percentage. Each case turns on its own facts.
Unfortunately, despite numerous campaigns over the years for the government to introduce legislation to provide for rights to be given to unmarried couples upon separation, we appear to be no further forward in having a modern law passed, which would give far more certainty to couples upon separation than is currently the case.
Until the law is changed we will continue to find situations where people are placed in positions of extreme financial hardship when a relationship ends.
Whilst we wait for a change in the law, it is still possible for there to be safeguards put in place for cohabiting couples to ensure that, notwithstanding the state of the law as it continues to be, there can be a fair outcome. Any person who is thinking about living with their partner should take legal advice before doing so with a view to entering into a Cohabitation Agreement and also taken advice on an agreement to regulate property rights both during the relationship and of curse in the event that the relationship were to end. This is particularly important in a relationship where there are, or may be children born to the couple where some additional safeguards usually need to be put in place so as to ensure that proper financial provision can be made in the event that the relationship ends.
If you have questions about issues raised in my blog then you can email me at email@example.com You can follow me on Twitter at @waynelynn and Silk on @silkfamilylaw