Raleys Solicitors

Many couples believe the illusion that, once they have lived together for a six month period,  they have the same status of a married couple. This is not true. This persistent urban myth often leads to disappointment when couples separate.

Rebecca Baker of Raleys solicitors was recently asked: “If I had married my ex-partner, would I have been better off?” In this particular situation, the individual had given her partner money towards the mortgage but was never named on the house deeds. She firmly believed that she would be entitled to half of the house because she had lived with him for 10 years. Unfortunately, she was to be disappointed. The reality was that without proof of the payments made she had no right whatsoever to claim against the property. The court would not compensate her for her contribution.

The current cohabitation laws are complicated and the courts struggle to apply family principles as if a couple were married. If a cohabiting couple do separate then there are certain limited applications that can be made. These include:

1. An application under Married Women’s Property Act 1882

This sort of application is possible if a couple were engaged and the engagement was terminated within the last 3 years. The application enables a party to make a claim in relation to a jointly owned home and other property including the household contents and the engagement ring. However, these days such an application is unusual.

1. An application under the Trust of Land and Appointment of Trustees Act 1996

This application is open to a couple whether or not they were ever engaged. An application can be made to establish an individual’s interest in the property or to order that the property is sold, if it cannot be agreed who is to remain in the property and buy out the other party’s share. It would be appropriate to make this application if the property is held in one party’s sole name and the other party has contributed to the acquisition of the property, either by paying or contributing towards the initial deposit when the property was purchased or by making direct contributions to the mortgage. Alternatively, it could also be a useful application if one party has carried out significant improvements to a property which increases its value.

The position of a cohabiting couple can be contrasted with that of a married couple in a number of ways. In particular, all the married couple’s assets will be taken into account as part of the matrimonial pot. In contrast, if a couple merely live together, the only assets that will be divided are joint assets. Assets in one party’s sole name will often be untouchable unless the other party can establish that they have made a significant contribution to that asset. This requires proof which is often too difficult to obtain particularly as couples in the first flush of romance rarely decide to record their financial intentions. Consequently, there is often no sufficient proof available.

As a result of these issues, the law is currently undergoing reform. In July 2007 the Law Commission produced a report dealing with the financial consequences where a couple are cohabiting and highlighting these potential problems. Unfortunately, it will be some time before any improvements are made law.

In the meantime, practitioners can only provide individuals with basic advice to bear in mind prior to entering into a relationship. If you are going to contribute to any property in monetary value, obtain the advice of a solicitor first. They will talk to you about your options which can include owning a joint property in unequal shares and entering into a trust deed to record this fact. If you wish to preserve any contributions made, the best thing to do is enter into a cohabitation agreement recording your intentions. If you spend any money improving your partner’s property then keep all receipts and, ideally, obtain a valuation before and after any work is carried out.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. Raleys Solicitors cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.