Disputes between unmarried partners when the relationship breaks down.
If there is no agreement in writing between people who are cohabiting then the court has to decide what each party is entitled to. Essentially, the law relating to joint ownership is based on three broad principles, namely:
- If you make an express declaration by deed about the beneficial ownership of a property, this is conclusive. If you do not, one of the following scenarios are possible:
- If there is a common intention between the parties, before the property is bought, about the beneficial ownership, the court can imply a constructive trust. This means that the court will imply that the parties have come to an agreement and the court will effectively pretend there was a written trust. It is not necessary for the parties to have an explicit conversation about this agreement before the property is bought, but the court has to make a finding that they did come to such an agreement. It may be that the court will only make such a finding by looking at the conduct of the parties later on. The fact that two people buy a property in joint names gives the court a starting point of an equal share and there would need to be other circumstances to show the court that this was not the understanding between the parties. Persuading a Court that a property owned joint should be divided any other way than equally is difficult.
- The court will also look at who contributed what and the beneficial ownership will be allocated accordingly. This is called resulting trust. Contributions can be either direct contributions to the purchase price or being a party to a mortgage. Similarly, if someone takes on the burden of a mortgage, alone or jointly, this should also result in a corresponding share in the equity. Sometimes, however, someone only lends their name to the mortgage while there is an agreement that they will not be liable to it as between the joint owners. In that case that person has no beneficial interest in the property as a result. Following a recent case it is much more difficult to persuade a court to give one party an enhanced interest in the home under this principle.
You should be aware that there is no such thing as a common law wife. Even the existence of children of the relationship does not give greater rights. However applications can be made to a court for financial provision for children and this can include the provision of a house for example. This is normally on basis that a property is provided for the period when the children are dependent but money invested in the house has to be returned when the children cease full time education.