Swindon Family Lawyer, Catherine Smith, considers a common issue for separating cohabitees – ownership of the family home and how it should be divided. Catherine is available on 01793 615011, or by email at firstname.lastname@example.org.
We have written previously about the minimal rights of cohabitees compared with couples who are married or in a civil partnership. That can, in part, be addressed by cohabiting couples signing a cohabitation agreement, as well as a declaration of trust if they are to co-own property.
If you are unmarried and you separate, the ownership of your family home and how it should be divided is often the biggest source of dispute. This is particularly the case where the property is not owned jointly, perhaps because it was purchased before you got together. In that situation, the non-owning partner may still be able to claim a share by demonstrating they have acquired a beneficial interest.
The easiest way to prove a beneficial interest is by referring to a signed and witnessed document, ie a declaration of trust or a cohabitation agreement. If neither exists and you cannot reach agreement, a claim under TOLATA (Trusts of Land and Appointment of Trustees Act 1996) may be necessary. This is where the court is asked to determine whether the non-owning partner has acquired a beneficial interest, and if so, to quantify it.
How can a beneficial interest arise?
A beneficial interest can arise in three ways:
- constructive trust;
- proprietary estoppel;
- resulting trust.
Trusts law is complex, and whether you are the owning or non-owning partner, you should take specialist legal advice at a very early stage.
By way of illustration, let’s take a look at how a beneficial interest can arise for a non-owning partner by way of constructive trust.
Two elements must be present:
- a common intention to share ownership; and
- the non-owner’s detrimental reliance on that intention in making a contribution.
So, for example, if the non-owning partner has made significant contributions towards the mortgage, and they can show that it was the intention of them both that in doing so, the non-owner would acquire a share, both elements are present. But the contribution of the non-owner does not have to be regular payments or even money at all. Paying for or contributing to major home improvements, or even the time and physical effort expended in undertaking those works yourself may be sufficient. The detriment may even be that the non-owner has given up their own home to cohabit.
Proving common intention
In most cases where common intention is disputed, the non-owner will claim reliance on their partner’s express words and conversations between them over a period of time, possibly years. Ultimately, it may come down to one person’s word against the other. However, after considering the evidence, if the court accepts it was more likely than not that:
- the non-owning partner was promised a share, and
- relying on that they made a financial or other contribution,
the court can find that a beneficial interest has arisen.
Can common intention be implied?
Sometimes, a non-owner will allege that common intention should be implied, although no words were spoken on the subject. They may say that their partner knew the non-owner’s contribution was always on the understanding they had a share. However, if the court accepts that nothing was said about ownership, they will generally not imply a common intention unless the non-owner contributed towards the original cost of purchase.