Cohabiting couples – rights at separation

There is much chatter in family law circles presently regarding the possibility of a change in law, bringing about a “no fault” based divorce system. Opponents to this scheme often cite the risk such a system may create by encouraging parties to marry (and thereby risk divorce) with little “risk”. Their argument extends to suggest that cohabiting couples will be more minded to marry and thus potentially divorce, given how much easier a no fault system would be administratively. Notwithstanding the huge emotional turmoil associated with divorce, the basis for this contention seems unfounded. Nevertheless, it is worth refreshing ourselves on the significant number of differences between how the law treats those that are married and those that are simply cohabiting at the point of any separation.

For married couples, the law seeks to ensure that the financial outcome is fair, giving due consideration to all of the circumstances of the case.

Such consideration will include the duration of the parties marriage, the parties’ financial needs and contributions etc. There is no such duty to consider these factors for couples that are unmarried. Many separated cohabitees incorrectly believe that they had rights as the ‘common law spouse’.  There appears to be a trend whereby couples believe that they somehow acquire rights if they have been in a relationship and living together for some significant period of time, essentially living as husband and wife. Even those in extremely long relationships of 20+ years, if the property is held in the sole name of one of them, the other has no rights whatsoever in the event that the relationship ends.  This extends to exclude all property rights and sharing of pensions or other means of financial support.

Where a property is owned in the cohabiting parties’ joint names, then they have equal property rights.  This means that, unless it is specifically stated otherwise, they will each own the property in equal shares.  Sometimes there can be a documentation such as a “Declaration of Trust”, which sets out the shares that each party intends to have e.g. 75:25.  Such a variation from the assumed 50:50 split must be a positive, conscious decision taken by both the cohabiting individuals and evidenced in writing.

More often than not, the disputes between separating, cohabiting couples occur when a property is held in only one party’s name, leaving the party without ownership having no property rights. There are some remedies which may be available, although this area of law is highly complex and fraught with litigation risk. In certain circumstances, even if a property is registered in one party’s sole name, the law will provide an ‘equitable remedy’ to the other party – i.e. provide property rights to achieve a notion of fairness.  However, this equitable remedy is not based on the financial need or legal entitlement of the non-owner.  Instead, the non-owner must show that:

  • There was a common intention to share ownership of the property, even if the property was only held in one person’s name.
  • The non-owning party must have acted to their detriment on the basis of the couple’s common intention to share ownership. Acting to their detriment on such an intention will often be by way of  significant financial contribution toward the purchase price (e.g. deposit at the point of purchase), via regular mortgage payments, significant home improvements (e.g. an extension). However, it is worth noting that funding or conducting general decorating or works for general wear and tear will fall short of this threshold.

Assuming that the non-owning party can establish the intention to share and demonstrate acting to their detriment, a judge will then have to determine what the parties’ share should be. Again, the law does not impose notions of fairness or need but instead examines the individual case facts to consider what the parties themselves had intended. This intention is usually established either by way of direct evidence or by inferring what their intentions were from their conduct. the court’s powers extend to being able to impute an intention, even if such an intention is not fully clear from the evidence available and thus sees this area of law carry significant litigation risk.

Cases involving cohabiting couples that have separated are extremely difficult to resolve without litigation, as it is necessary to prove that the non-owning party has a financial stake in the property that is owned exclusively by their ex-partner, before then attempting to value what the percentage share may have been intended.

If you are about to cohabit with a partner, you should take independent legal advice before doing so, with a view to entering into a cohabitation agreement, particularly if the relationship has or anticipates children too.  Serving Bedford and the surrounding villages, together with our office in central London, the solicitors at Hunter and Uro Solicitors can help you with any family law matter, including cohabitation, separation, divorce or financial matters and orders relating to your children. If you would like to speak to one of our solicitors to discuss your case, contact us on 01234 889777 or 0207 177 9777.

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