In July 2016 the Office for National Statistics published figures that indicated that around 5.7 million people in England and Wales are now living together (cohabiting) and at least 2.1 million children now live with cohabiting parents. Many of these people still believe – wrongly – that if problems arise in the relationship the law will recognise a “common law” marriage and protect a “common law” spouse. Unfortunately many cohabitees only discover their mistake when they are faced with a separation and find that they do not have any legal right to the property that they have been living in for perhaps many years. Problems can also arise if their partner dies without a Will and they may well lose the home that they have shared together.
When a married couple divorce the Court has very wide and discretionary powers to make a broad range of property orders to ensure that both partners can move on with their lives in a fair and sensible way. The Court can make any orders they wish with regard to property regardless of their legal ownership of the property.
The situation is different with cohabiting couples. The Court has no such wide ranging powers to make property orders. This can sometimes come as a surprise to separating couples but not to their lawyers. In order to deal with issues concerning property rights where a cohabiting couple are separating or one has died then the Court may have to rely on trust principles dating back to the 19th century.
There have been some recent cases but the position still remains unclear.
The Court hoped to achieve some clarity when they considered the case of Stack v Dowden in 2007. In that case it was stated that where a property is registered in joint names with no indication to the contrary, there will be a presumption that the couple also intend a joint ownership of the property which gives rise to an equal division of the property. The supreme Court said to turn over this presumption would not be an easy task – partly because buying a house together indicates “a strong indication of emotional and economic commitment to a joint enterprise”. However, if that presumption is rebutted then the Court must make an investigation into the common intention of the parties’ in relation to shares of the property. This can be a very difficult and long process and may require the Court to look into the whole course of dealing in relation to the property taking into account a wide range of the factors. These factors will include the parties’ respective financial contribution to the property, the nature of the parties’ relationship, any children and also to include the parties individual characters and personalities.
Difficulties also arise when a couple are living together in a property which is owned by only one of them. If the non owning partner wishes to establish an interest in the property then the Court has to engage in a two part process. First it will need to ascertain that the Claimant has acquired an equitable interest in the property. This can be determined if there is an express agreement between the parties or if there can be shown a common intention which would require the Court to show the parties’ common intention through their conduct was to share ownership of the property. Only then when the Court is satisfied that the Claimant has acquired an equitable interest can it go on to decide shares, again applying the factors raised in the case of Stack v Dowden.
An illustration of the Court’s approach can be seen in the case of Graham York v York. In this case a couple had been living together for 33 years until the male partner’s death. For the last 24 years of relationship they had lived in a house in his sole name. The house was subject to a mortgage. Following her partner’s death Ms York lived in the property and the mortgage fell into arrears. It fell to the Court of Appeal to determine the extent of any beneficial interest that she may have acquired in the property. Ms York was apparently suffering from post traumatic stress disorder after having endured years of abusive conduct by her partner. The Court concluded that she had made an unquantifiable but material financial contribution to the family home. However it was eventually confirmed that her share would be 25% of the net proceeds of sale after the mortgage had been paid off. This was said by the Court to be a reflection of her contributions both financial and non financial over the course of 33 years, including not only her financial input but also domestic responsibilities and caring for the couple’s young daughter.
A slightly different approach was adopted in a recent case called Martin v Williams. Ms Williams and Mr Martin had been living together for 18 years sharing a home as tenants in common. This form of ownership means that on death the deceased’s share does not automatically pass to the survivor but can be passed by means of Will. Mr Martin had in fact remained married to his former wife who he had never actually divorced although they had been separated for almost 20 years. He had also failed to update his Will. As a result on Mr Martin’s sudden death his share of the property that he jointly owned with Ms Williams was deemed to be transferred to his wife.
This matter was again referred to the Court and the Judge on this occasion decided that Ms Williams was entitled to her claim. Although this appears to be a fairer outcome people who live together and are not married should not rely on this decision. It is much better to ensure that they understand the implications of owning properties as tenants in common and the necessity of keeping an up to date Will. There is also some merit in drawing up a Cohabitation Agreement and both parties will need to seek independent legal advice before signing.
There are moves to reform the law with regard to cohabitees but there is no immediate prospect of reform in the near future. Cohabitees are therefore well advised to seek advice with regard to the ownership of the property and how problems and pitfalls can be avoided if appropriate legal advice is taken at an early stage.