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Rights of Co-habitees

Rights of Co-habitees

It is probably true to say that in the majority of cases the home is the largest asset that most people will ever own and will be the cause of the greatest difficulties when a relationship breaks down.

Within a marriage or civil partnership the Court is guided by criteria in determining who ought to own it; not actually who owns it. That does not apply to separated or former co-habitants to whom Matrimonial law does not apply. Where a couple have co-habited but the legal title to the property is registered in the sole name of one of the couple the Court has to turn to what is called Trust Law;

A “Resulting Trust” arises where the non owning person has made a direct financial contribution to the purchase of the property but there are no circumstances, for example, an expressed or implied agreement, to show that the contribution was intended to be a gift or a loan. In those circumstances the Court looks at how the price was found and paid at the time of the purchase itself, and not, at who paid the mortgage instalments later on. A “Resulting Trust” means that the “Legal Owner” holds either all or part of the property on Trust for the benefit of the non-owning party.

If the non- owing party did not make a direct financial contribution to the purchase of the property, the concept of a “Resulting Trust” cannot apply.

The second, more complex concept is known as a “Constructive Trust“. There are two different ways in which this can happen.

There is an express agreement, arrangement or understanding between the couple as to who should own what particular share of the property, or the legal owner has promised or induced the non-legal owner to believe that he or she will receive a share of the property. Such an agreement or arrangement may be found in a formal document or it could be confirmed by a statement only made orally and very precisely. However, such an express agreement or arrangement is not enough by itself unless it is in writing signed by the legal owner which would. then be an Express Trust rather than a “Constructive Trust”. Excepting that case it is also necessary for the non-owning party to have acted to his or her detriment or altered his or her position in reliance on that agreement or arrangement.

Where there is no such express agreement or arrangement the Court can infer that there was an agreement or arrangement and it does this by looking at the conduct of the couple in relation to the property. If the non–owning party has directly contributed to the payment of the mortgage instalments, or to payments for a substantial improvement of the property the Court can infer that this must have been because there was a common intention to share the property. People do not usually pay other people’s mortgages for nothing but more importantly, certainly do not pay for major improvements or adaptations to a property if they do not expect to benefit from it. However less important contributions, like contributing to household expenses, will not do, because there may be many reasons why people pay those, other than an intention to gain a financial interest in a property.

The major difference between the two types of trust, that is resulting and constructive – is that the concept of a resulting trust relies upon the precise share in the property usually being based on the amount of the direct capital contribution, proportionate to the purchase price. However, under the concept of a Constructive Trust, once an intention for someone to share in the property is established, then the Court will take into account a wider range of factors in deciding what the amount of that share should be.

Applications to the court dealing with the above are typically made under the Trusts of Land and Appointment of Trustees Act 1996.

We can advise you in relation to the procedure dealing with such applications and as they are a complex area of law we strongly advise you to obtain legal advice.

Formal Court documentation called Pleadings comprising application forms, particulars of claim and a Defence have to be filed within certain time periods. There then follows a process called disclosure where each party is expected to disclose all relevant documentation that he or she has in his or her possession which proves their case. If a settlement cannot be reached by negotiation or mediation, the Court will list a final hearing before a Judge.

This is a lengthy process and can take up to one year to come to trial. It is usual for parties to be represented by Barristers in these proceedings because of the nature and complexity of the case. It is usual to involve a barrister at an early stage.

There is one further important area of Property Law which is not used very often and that is where you and your former partner have had children together. The Court can order payment of capital to cover limited past and current capital needs and towards the purchase of a property. The Court can also order a transfer and/or sale of a property to be used to house the children. Such orders are made under Schedule 1 of the Children Act 1989.

Where money is ordered to be paid to purchase a property or a property is to be transferred then this can only be on the basis that the capital is in effect held on trust for the children until they are aged 18 or 21 when the capital will revert to the children’s father. This may often mean that the property will then have to be sold.

The court has the power to make an order for child maintenance only where the amount of child maintenance is agreed, and in other very limited circumstances. Otherwise an application has to be made to the Child Maintenance Service (CMS) to assess the amount of child maintenance.

The Court has no power whatsoever to order payment of maintenance or capital for a former partner. Despite popular use of the term, there is no such concept in law as a “common law” husband or wife.

Howe & Spender Solicitors is regulated by the Solicitors Regulation Authority, No.00173958