February 22, 2021
Unfortunately, experience within this field continues to demonstrate that there is a common misconception between unmarried couples that they have the same rights financially as married couples. This is often referred to as “common law marriage”. Following the breakdown of a relationship cohabiting couples are not protected by the same law that applies to married couples. A knock-on effect to this is that separated couples are often left with significant uncertainty over their entitlements.
Therefore, when cohabiting with a partner, it is important that you take steps to secure your financial position at an early stage, as living together does not necessarily give you any legal status. This can be achieved through the completion of a cohabitation agreement which is a legally persuasive document setting out the clear intentions of the parties to be bound by the document.
Generally speaking, the most substantial asset held within such relationships is property. The information below will explore the ways in which the law can support unmarried couples in respect of property disputes.
You can purchase a property as either joint tenants or tenants in common and the title deeds of the property will detail this position. As Joint Tenants the position is that you own the property equally. This is crucial, as any division of the proceeds of sale will have to follow the title deeds and is therefore split 50:50. If you purchase a property as tenants in common, the general position is that you hold the property in unequal shares because of an unequal contribution to the purchase. You would have a Declaration of Trust drafted at the time of purchase setting out your respective shares in the property.
There are of course many situations where a property is bought in an individual’s sole name. Although only one name may be on the mortgage, the non-owning party may have contributed towards both the purchase and mortgage. Therefore, it is upon the non-owning party to show that they have established a beneficial interest in the property. This must be evidenced if disputed.
The information below will explore the ways in which the law can support unmarried couples in respect of property disputes.
How does the law assist unmarried couples?
The Trusts of Land and Appointment of Trustees Act 1996- TOLATA legislation gives the Court the ability to assist unmarried couples’ in relation to property disputes.
The Court can make the following orders:-
An order forcing the sale of land or property.
An order enabling one party to regain access to a property when the other party refuses to leave.
An order which determines what share of a property each party owns.
An order enabling third parties, such as parents or grandparents, to recover their financial interest in a property owned by the separating couple. (eg. Where contributions have been made towards the purchase of the Property and a declaration of trust has not been completed).
This law can be extremely beneficial for unmarried couples who do not have the ability to rely on matrimonial law to deal with their property disputes.
It should be noted that there are some significant restrictions on the Courts powers. The Court does not have the discretion to award shares of a property in the same way as it can for married couples. The law is more stringent for unmarried couples and restricts the Court to considering what was expressly agreed and what the parties’ intentions were.
It is extremely important that parties’ are clear on their ownership prior to purchasing a property as cohabitees. Should unmarried couples be unclear on their legal position following their separation it is vital that they seek independent legal advice.