It often comes as a surprise to cohabiting individuals that in the unfortunate event of a relationship break down they do not have the same rights to make property claims against each other as they would have if they were married or civil partners. There is often a misunderstanding that couples may have some protection by being a ‘common law’ wife or husband. In reality, such terms have no meaning in law and offer no protection.
Instead of being able to rely on the family court, disputes between cohabitants regarding their interests in a property are determined in accordance with trust law. The most common areas for dispute when a relationship breaks down relate to whether or not the property should be sold and if it is, what interest each party has in the proceeds of sale.
Trying to determine who should get what out of any proceeds of sale can be particularly complicated. In seeking to resolve such disputes the legal basis on which you initially purchased the property will be a very important factor, as well as any subsequent agreement to vary the share in which the property is held.
Factors such as having paid money towards the deposit, having paid for significant improvements or paying most or all of the mortgage payments could be highly relevant in determining what each party’s interest in the property is. In some circumstances an individual may be able to claim an interest in a property even though they may not be registered as its legal owner.
If agreement cannot be reached as to who has what share in the property, it may be necessary to go to court to determine what your interest is and to try and persuade the court to order the sale of the property.
Whilst court action should always be a last resort, it may be the only way of achieving a genuine separation. This can be particularly relevant when the parties remain financially linked through a joint mortgage whilst the property issues remain outstanding. In such circumstances an application to the court under legislation called the Trusts of Land & Appointment of Trustees Act 1996 (TOLATA) would be required.
The legal costs of taking a claim to court can be significant and before court proceedings are issued, every effort should be made to try and find a resolution.
Mediation, which involves a trained third party trying to broker a deal, can be an effective alternative to court proceedings but this does require the willing cooperation of both parties.
Raworths’ Dispute Resolution team has been helping couples in such circumstances for many years so, if you need advice on any of these issues, please contact email@example.com who can assist you.