It is a common misconception that cohabiting couples have the same rights over property as married couples or those in a civil partnership. If the relationship breaks down, whose rights are protected?
Tenants in Common and Joint Tenancy
If a property is registered and held by a couple, either as tenants in common or as joint tenants, then both parties will have a legal and beneficial interest in that property. If held as tenants in common, if one party dies then their share of the property will pass to their estate – i.e. it will pass as dictated by their Will and if they die without leaving a Will, under the intestacy rules. If the property is held as joint tenants, then if one party dies the other joint tenant will inherit the deceased’s share and will end up owning the property as a whole. Thus one way to ensure that parties have an equal interest in a property is to register the property when it is purchased, and hold it, either as tenants in common or beneficial joint tenants. If the marriage or civil partnership breaks down, these interests will still be valid and the parties can sever the joint tenancy, transferring it to a tenancy in common.
Married Couples or Couples in Civil Partnerships
If a couple is married or is in a civil partnership, the law dictates that both parties have property rights regardless of the way the property is held. If a property is held in the sole name of one party, the law makes provision for the other party who is not a registered owner of that property, giving them property rights if the marriage or civil partnership breaks down. The Courts will look at the marriage or civil partnership in its entirety, taking into consideration the roles of the parties, the contributions they have made either monetarily or in other terms – for example by looking after children or making repairs/decorating the property – and the intention of the parties (i.e. to share the property equally as a matrimonial home). The Courts will then make a decision as to the most fair and proportionate way of dividing the asset.
Unmarried Cohabiting Couples
Contrary to popular belief, cohabitation does not automatically give a party right over property held by a partner as it does for married couple or those in a civil partnership – there is no such thing as a ‘Common Law Wife’. This means that, regardless of the longevity of the relationship, following the break-up of a cohabiting couple who are not married or in a civil partnership the Law requires a ‘clean break’. Both parties will keep what they originally entered the relationship owning and nothing more.
An express declaration would amount to the sole owner of the property and the cohabitant coming to an express agreement, arrangement or understanding that the property is to be shared beneficially (Lord Bridge, Lloyds Bank v Rosset  AC 107). A written agreement to this effect would amount to an express declaration of trust.
In the absence of an express declaration, to show an inferred common intention exists is extremely difficult. The Courts are reluctant to find such intention even where it would seem reasonable to do so in all the circumstances. In any event, the intention of the parties will be judged on a case-by-case basis and any claim will need to be evidenced. The Courts are reluctant to award someone rights in property solely on the basis that they have lived in that property.
How should I proceed?
If you are an unmarried cohabiting couple or a couple not in a civil partnership and one partner is the sole owner of the property you live in, if you both want the other to have rights in that property you should consider a written agreement setting out these terms. Both parties should seek independent legal advice once they have decided what assets they have an interest in and how large that interest should be. This agreement will then be legally binding on both parties.
If you are interested in discussing a co-habitation agreement further, or would like some advice on purchasing a property, contact Sarah Ryan on 01525 372 140 or sarahr_at_austinandcarnley.co.uk.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.
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