It is a common myth that couples who live together for a long period of time have the same rights as married couples, this is often referred to as a ‘common law marriage’. In fact the concept of ‘common law marriage’ has no legal validity in the UK, you are either married or you are not. So where do cohabiting couples property rights stand following the breakdown of a relationship?
Unmarried couples have no guaranteed rights to ownership of each other’s property. Where a relationship breaks down and the couple are unmarried the court has to resolve questions of property ownership by applying strict property and contract law. A piece of legislation called the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA) gives courts powers to resolve disputes about the ownership of land. Under TOLATA the court has the ability to make an order for the sale of a property, to determine the financial shares in a property and to postpone the sale of a property until a relevant child reaches 18, but does not have the power to transfer a property between unmarried partners. The length of time the couple have been together will not necessarily be relevant and neither will questions of fairness.
When determining the ownership of the property the court will look to the intention of the parties and each case will be decided on its own facts. If there is a declaration of trust setting out the shares each person owns in the property then this will be considered conclusive evidence of ownership if there is no fraud, mistake or undue influence. In the absence of any direct evidence of intention the court will try to figure out what the couple’s intention was. If the property is owned jointly the presumption is that the property was intended to be held by the couple in equal shares. However, if evidence can be put forward to show that the couple had different intentions then the presumption of 50/50 ownership can be rebutted. One partner may be found to have a beneficial or equitable interest in the property even where the property is owned in the sole name of their partner.
Typical examples of where an interest can be acquired in another’s property are:
Where a direct financial contribution towards the purchase price has been made, such as paying some or all of the deposit;
An indirect financial contribution has been made, such as paying the mortgage or for the running costs of the property;
One person has made a promise to another person that has been relied upon for example promising that the property will be their home for life.
Proceedings brought under the TOLATA legislation are often extremely expensive. To add to this the general rule is that the costs will follow the outcome, which means that the loser will be ordered to pay the winner’s costs. It is therefore important that the outcome of the dispute is proportionate to the costs of pursuing the claim.
This is a specialist area of law requiring a family solicitor with experience of TOLATA claims. Please contact one of our family lawyers if you would like further information or advice.