Unmarried couples do not have the same rights as those couples who are married. Therefore their rights in relation to the property they share are guided by general principles of property law.
When considering whether, for example, a former partner has an interest in a property bought in the sole name of the other partner it is important to look at a number of factors, such as:-
- Discussions between the parties
- Reason for the purchase in the sole name of one party
- How the purchase was financed
- The purpose for which the property was acquired
- The nature of the relationship
- How finances were arranged
- Discharge of the outgoings on the property
The first question to consider is whether there was an express agreement. If there is, an agreement reached between the parties and effectively recorded in writing, whether by a declaration of trust contained in the conveyance or in a separate document, will prevail, until it is varied.
Where beneficial interests are not declared in the title deeds, they will, on the face of it, follow the legal estate. Therefore, if the legal estate was transferred into the sole name of one cohabitant, the other will have no interest, unless it is possible to establish the existence of a trust.
A trust can arise in 1 of 3 ways:-
- Resulting trust- where a property is purchased in one name alone with contribution to the purchase price from both, or more than one party, a resulting trust will be presumed. Payment of the legal costs of the purchase will not be enough. However, if it is shown that the contributions were meant to be a gift to the owning cohabitant, or a loan to be repaid to the borrower, then a resulting trust will not arise.
- An actual constructive trust- there needs to be an express common agreement, arrangement or understanding between the parties that the property was to be shared beneficially. Such an intention or understanding must be communicated between the cohabitants.
- An inferred constructive trust – is where there was no express agreement or understanding. A trust can only exist where the Court could infer from the conduct of the parties, that they jointly intended they should both have a beneficial interest in the property. There must have been a common intention that the non-owning party would be entitled to a share and that person must have acted to their detriment.
Under English Law, the fact that A spends money on B’s property, does not of itself entitle A to an interest in the property; there must be a common intention established before the spending of the money that will create any interest in the property.
Once the common communicated intention, or understanding is established, or where a common intention is inferred, the Court must then find out how the parties intended the shares in the property to be divided. The Court will consider, in addition to the financial contributions made; contributions in terms of home making as well as contributions in terms of child rearing. In addition, the Court need to be satisfied that there was a detriment.
What if you cannot establish an interest under the trusts referred to above? Is there another way?
It may be possible to raise proprietary estoppel and thereby establish a right to remain in the property and possibly an interest.
Such cases are usually where a dishonest or deliberate misleading of the other party is involved. There must have been some encouragement by the legal owner that some right had been granted in or over the property to the other and that must have acted to his or her detriment.
If all else fails, a contractual licence to occupy can arise if there is evidence of an agreement or intention to create a legally binding interest and contribution or other consideration to support a promise.
If you require legal advice regarding these issues or any other matters upon the breakdown of a relationship for parties who are not married give RJT Solicitors a call on 01942 409154
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