Written by Paul Summerbell

Solicitor at Reeds

Paul has over 20 years’ experience representing clients from all walks of life. He is an Accredited Specialist with Resolution in children and complex financial matters.

There is a common public misconception that the unmarried/cohabiting couple enjoy similar rights to married couples. This is sometimes referred to as ‘common law marriage’ or ‘common law husband/wife’. This is not the case and has no foundation in law. In financial terms those couples who marry and subsequently divorce have the benefit of the legal protections of the Matrimonial Causes Act 1973. Same sex couples enjoy the protections of the Civil Partnership Act 2004. There is no equivalent coherent body of law available to cohabitants. The law relating to cohabiting couples has developed in a piece meal fashion to deal with their arrangements on relationship breakdown.

The main issue for many cohabitants, and the children, is what happens to the family home on the relationship breakdown.

The legal position of a cohabitant on relationship breakdown in financial terms is as follows:

  • There is no legal process to end the relationship.
  • There is no legal duty to provide financial support (maintenance).
  • Property issues (home) are addressed by taking civil proceedings in property and trust law (see below).
  • There is no statutory right to occupy the home.
  • Cohabiting couples do not inherit each other’s property under the intestacy rules.
  • Transfer of tenancy orders can be made in some circumstances under the Family Law Act 1996.
  • Occupation of the home can be obtained by establishing a contractual licence or obtaining a property order in favour of children under the Children’s Act 1989 or temporarily by an occupation order under the Family Law Act 1996.
  • If a partner becomes bankrupt the sale of the home can be delayed only if there are dependent children and only for 12 months.

The legal position of a cohabitant on relationship breakdown regarding children is as follows:

  • At birth the natural mother will have automatic parental responsibility for the children but the father does not unless he is named on the child’s birth certificate, or by agreement with the mother or through a court order.
  • Either parent can issue proceedings under the Children Act 1989 for an order relating to the children if they are the natural parent.
  • Both parents have a duty to maintain the children and can make an application to the Child Support Agency or Child Maintenance Service and Schedule 1 of the Children Act 1989 for financial support.

The main issue for many cohabitants, and the children, is what happens to the family home on the relationship breakdown. This depends on how the property is owned. If the property is held by both parties jointly as legal co-owners then the property cannot be sold or transferred without the consent of both parties. If it is not owned equally a declaration of trust should be used to specify the respective shares in the property. The TR1 form completed to convey the property can be crucial as it requires details of how the property is to be owned. It should be completed to reflect that ownership and the parties should be fully advised about how the property is to be held before completing this document. This is often referred to as an express trust as the details are fully or expressly documented.

The ownership of property is in two parts:

  • Legal title – the person in whom the legal estate is vested.
  • Beneficial interest – the person with co-ownership rights even though their name may not appear on the legal title of the property.

If the property is owned by one party the non-owning party must then establish a constructive trust, resulting trust or proprietary estoppel. In the constructive trust the non- owning party must establish by both words and conduct that they were led to believe that they had a beneficial interest in the property and that the non-owning party acted in reliance on this to their detriment. This could be by way of mortgage payments or improvements to the home. It can also be by deferring home security in the completion of the “occupier” form for the mortgage company financing the purchase of the home that allows the non-owning party to postpone those rights as against the mortgage company. This is a common form required by mortgage companies.

If a financial contribution was made to the purchase of the property the beneficial interest in the property will be allocated accordingly. This is known as a resulting trust.

Proprietary estoppel has been used to grant property rights in the past. Three preconditions apply:

  • An assurance of an interest in property;
  • Reliance on that assurance;
  • Detriment suffered as a result.

This must be such as to allow the court to make an additional finding that it would be unconscionable to deny the claimant the relief sought. It is said to be easier to establish than a constructive common intention trust as it relies on a mere assurance rather than a common intention.

In deciding the share of the property which both parties may be entitled to in circumstances where a trust is found to exist there is wide discretion to look at the whole course of the dealings between the parties and to concepts of what is fair.

If legal action is required to determine an issue concerning the property of cohabitants i.e. where they cannot agree what is to happen to the property, proceedings are issued under section 14 of the Trusts of Land and Appointment of Trustees Act 1996. In reaching any decision the court will consider:

  • The intention of the parties who created the trust;
  • The purpose of the trust;
  • The welfare of any minor who occupies the property as his home;
  • The interest of any secured creditor.

It is worthy of note that in case law it has been stated that:

“The onus is on the person seeking to show that the beneficial ownership is different from the legal ownership. So in the non- owner cases, it is upon the non-owner to show that he had any interest at all”. 

How to protect the cohabitant (and children)

  1. Enter into a Declaration of Trust when the property is purchased, specifying the shares in the property.
  2. Make sure the TR1 form conveying the property is properly completed to reflect the ownership of the property.
  3. Enter into a living/ cohabitation agreement at the time of cohabitation to specify property ownership.
  4. Negotiate to execute a transfer of property to properly reflect ownership of property.
  5. If disagreements arise, negotiate the ownership of the property prior to using legal proceedings.
  6. Ensure what life insurance provisions exist and that the cohabitant is catered for.
  7. Ensure that each cohabitant has an up to date will.

Death

If the property is owned as joint tenants the property will pass to the other joint owner and the survivor becomes the sole owner of the property.

If there is no will the cohabitant has no rights to inherit under the intestacy rules. However, if the survivor can show that they were maintained by the deceased before death a claim can be brought under the Inheritance (Provision for Family and Dependants) Act 1975.

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