We are not married – do I have a claim on the house?

So you’re not married but want to know if you have a claim on the house. Well, the short answer is that it depends on a couple of factors. Here, Lisa Brown explains why you may or may not have a claim on the house and how having children makes the situation slightly different.

If your name is on the deeds

If your name is on the title deeds, then the answer is generally yes, although the level of that claim will depend on the documents you signed when you purchased the property.

But what if it isn’t?

If your name is not on the title deeds it is more complicated and it will depend on whether:

There was common intention to share the property
You relied upon that to your detriment, for example, you paid for renovations on that basis.

Part of the problem is that where parties cannot reach an agreement about this the law which applies (Trust of Land and Appointment of Trustees Act 1996- known as TOLATA) does not allow judges the level of discretion which they normally have in family cases. This can lead to outcomes which just seem fundamentally unfair.

TOLATA is not designed with cohabiting couples in mind and, in addition, the way in which TOLATA cases are dealt with procedurally in terms of deadlines and costs rules is more aligned with commercial litigation than it is with family. This can mean that people are left in a position where they just do not feel able to deal with a claim themselves and they cannot afford to pay solicitors.

Back in 2007 the Law Commission recommended that the law in respect of cohabiting couples be changed in England and Wales, but it just does not appear to be high up on the political agenda. It is worth noting that the law in Scotland in relation to cohabitation did change in 2006.

Between 1996 and 2020 cohabiting couples in England and Wales increased by 137%. There are also currently many couples living together who had to delay their wedding due to the Covid 19 pandemic and many more who, due to the economic impacts of the pandemic, may simply not feel able to afford to get married. It is unlikely that any of them realise the legal ramifications if they separate and the limits as to what can be done legally. It is a significant issue and one which needs addressing.

Common law husband/ wife?

Another problem in this area is the perception that, if you are living with a partner for a long time, you become common law husband and wife. This is simply not true. Whether you are living together for 3 weeks or 3 decades the law applied is the same.

What if there are children involved?

The situation is slightly different if you have children with your partner. In those circumstances you can also have claims on behalf of them for housing needs to be met under Schedule 1 Children Act. This arguably gives the court more scope for discretion to consider overall fairness, but it is led by the needs of the child or children. As such, if for example, the court ordered that you could remain in the property to meet the housing needs of the children that arrangement would normally come to an end once the children are adults.

So, what can I do?

It is important that cohabiting couples consider the “worst case scenario” and if you are purchasing a property thought is given to whether one person is contributing more and whether that should be reflected in the title deeds.

Cohabiting couples can also enter into a cohabitation agreement to regulate what would happen should they separate in the future and also (if they wish) the arrangements between them whilst they are together, for example who pays which bills. This can provide certainty and avoid potential stress and costs later down the line.

There may well come a time where there is a change in the law but, for now, if you are living with a partner in a property which one or both of you own, it is important to consider whether the title deeds of that property properly reflect how you see the ownership and, if not, seek legal advice as to how best to have this corrected.

I put the deposit down on the house – Do I get more if we sell it?

The answer is…. it depends. It depends on a number of factors, and the answer can change according to your individual circumstances. To explore this topic, and to show how the answer may change over the course of your relationship, Frances Bentley will explain about the purchase of her own house.

Cohabitation – couples who are not married

My partner and I bought my house (in joint names) in December. I put in the deposit which we agreed should be protected, should we ever separate in the future. We are not married (yet!).

We decided to enter into a declaration of trust, which is the best way to protect a deposit payment if one party puts down all or the majority of it. A declaration of trust is a document which outlines your intention as to how you own the property/ and who should get what in the event of a later separation. Our declaration of trust outlines that should the property ever be sold in a later separation; the deposit payment will be returned to me and we then divide the remainder of the proceeds equally.

As we are not married, the legal position with a jointly owned property is that “equity follows the law”, so unless there is a declaration of trust confirming otherwise, as we own the property jointly, the law would say the starting position is that the proceeds should be divided equally. However, as we do have that declaration of trust, in law, that should be followed instead.

So, the declaration of trust is a really important document.

If I had put a deposit into a property that my partner was buying in his sole name, then this becomes potentially even more difficult. Again, unless there is a declaration of trust in place confirming the deposit payment is to be returned to me, then, legally, because of the “equity follows the law” rule (and because we are not married), to depart from the position that my partner gets 100% of the equity upon a later sale, I would have to evidence that there was a “resulting” or “constructive” trust, which is difficult to do and a very complex area of law.

So, it is important to consider getting a declaration of trust for couples who are cohabiting/ not married.

Marriage

My partner and I are going to get married in August 2023, so how does this change the position/impact on the Declaration of Trust that we entered into?

This answer may actually change over time. The family home would become a matrimonial asset, and the starting point, for division of assets on the breakdown of a marriage is 50/50. That said, in a short, childless marriage (a marriage of, say, under 5 years) then a Declaration of Trust may still be persuasive (but not binding) if there was a later dispute.

However, if we have children, their needs will be the court’s “paramount consideration” in a later marriage breakdown, so, if the monies in the house are needed to meet the needs of the children, that would be the deciding factor. Also, the longer the marriage, the harder it is to depart from a 50/50 division of assets. So, a declaration of trust entered into before a marriage lasting say 25 years will not carry much weight, as the court will say that the assets/finances of the parties have become “intermingled” due to the length of the marriage.

To best protect your position, if you are going to get married or have just married, you could enter into a pre-nuptial agreement or post nuptial agreement – and whilst not legally binding they can be persuasive upon a later dispute on marriage breakdown.

So, as you can see, the answer to the question “I put down the deposit, will I get more” depends on a number of factors, including how the property is to be owned, whether or not a declaration of trust is entered into, whether or not you get married and how long you are married for.

Whichever way you look at it, the best way to protect any deposit payment is to consider how you are going to own the property at the outset and then explore your options. For example, you should take advice from a family lawyer as to whether you should enter into a declaration of trust, pre-nuptial agreement or post-nuptial agreement. At McAlister Family Law we can discuss these options with you and provide you with advice specific to your circumstances.