Oral agreement for cohabitees binding

In the recent case of Ely v Robson [2016] EWCA Civ 774, 26 July 2016 the court found that an oral agreement between cohabitees could be relied upon and made an order to that effect. The parties to the case were partners with one partner (the boyfriend) solely owning the property where they lived during their relationship.

The relationship broke down in 2005 but the parties continued to live together with the girlfriend’s aunt and her mother on occasion. In 2007 the boyfriend applied to court for the house to be sold and during the process, the parties met in August 2007 where, according to him, the parties had reached an oral agreement as follows: –

  • That the boyfriend would hold the property on trust for himself for life, with 80% to his heirs and 20% to the girlfriend;
  • That the girlfriend could live in the house while either her aunt or her mother were alive;
  • That the boyfriend would be able to sell the property following the girlfriend’s right to occupy coming to an end; and
  • that the boyfriend would relinquish all his claims against the girlfriend’s properties

Following the agreement being reached, the parties’ solicitors wrote to court asking that the original hearing be moved to a later date to allow them more time to finalise the oral agreement. However, the hearing was never re-listed and the terms of the oral agreement were not formalised.

When the girlfriend’s aunt and mother passed away, the boyfriend applied to court for a declaration of the parties’ interests and for an order to sell the house. The girlfriend denied that an agreement had been reached following the meeting in August 2007. The judge refused to accept this particularly given that the boyfriend had waited until the girlfriend’s aunt and mother had passed away, as per their agreement, before seeking to sell the property. The judge considered it ‘unconscionable’ for the girlfriend to assert otherwise given the parties’ actions since the meeting.

This case reiterates the importance of clearly documenting all discussions and agreements between cohabitees as soon as possible. Conversations can be easily misinterpreted and despite this, the court can find that a constructive trust exists following on from those informal discussions.

If you are thinking about moving in with your partner, or if you are already living with your partner and wish to formalise an agreement between you in the event of a separation, then our solicitors at Hunter & Uro can guide you through the process. Serving Bedford, Northampton and Milton Keynes, our lawyers can help you with your family law and divorce matters. Contact us on 01234 889777 for further details on our free consultation.

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