Picture the situation – you are in a long-term, committed relationship with your partner. You live together in your partner's home, and you have come to see it as your own. You have spent considerable amounts of money on renovating the property, and you might even have contributed towards the mortgage repayments. Then, the unexpected happens. Your relationship breaks down. You now need to go through the stressful and difficult process of separating.
Moving out and moving on is a priority and you need some money to start up again in a new home. You have always believed that you had an interest in the house you shared with your partner. After all, why else would you have 'invested' your time, energy and money into those expensive renovations?
Given that cohabiting couples are now the fastest growing type of family, disputes over property ownership on relationship breakdown are becoming increasingly common and this is not helped by the misconception that there is such a thing as a common law marriage – There is no such thing as a common law marriage!
When an unmarried couple separates the law does not treat them in the same way as they would a married couple. A mixture property law and equity applies when determining their claims on separation. This is set out in the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA). The starting point is that equity follows the law. This means that if the property is legally owned by only one person, then the presumption in law is that they have 100% of the beneficial interest in the property as well. So, if you are not a legal owner of the property on the face of it, you have no interest in the property!
Although the starting point is that equity follows the law this presumption can be rebutted. There are three ways in which you can establish that you have a beneficial interest in a property which you don't legally own:
- By establishing a Constructive Trust.
To establish this, you would need to show that there was a common intention between you and your partner that you would have a beneficial interest in the property. You need to think about any words or actions said or done by your ex-partner which demonstrate you were led to believe this was the case, and you relied on this to your detriment. The fact that you made mortgage repayments or contributed to home improvements can show this detriment.
- Another way to argue that you have a beneficial interest in the property is if you actually contributed to the purchase price. If you can prove this, you might be able to establish there is a Resulting Trust over the property and you could prove a beneficial interest in that way.
- The final way that you can establish an interest in the property is using a device known as Proprietary Estoppel.
Proprietary Estoppel is when the legal owner has led you to believe you have a beneficial interest in the property and that you have relied on that assurance to your detriment. It also needs to be shown that it is unconscionable, or unfair, to deny you an interest in the house. It could be that you gave up your own lease to move in with your partner, thus giving up the security of having your own home.
Each case will turn on its own facts. As the non-owner, the onus will be on you to make these arguments and show your beneficial ownership.
If you and your ex-partner have children together, there are some limited financial claims that you can make for the benefit of the children only under Schedule 1 of the Children Act 1989. Please see the link to our article here.
Going to court over a property dispute can be extremely expensive and the litigation is fraught with risk. The solicitors in our family department are experienced in dealing with these sorts of disputes in a constructive way, outside of court. If you are experiencing any of the issues dealt with in this article.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.