Laws Concerning Cohabitation in the UK
Cohabitation can present difficult legal challenges for couples in the UK. Unlike with married couples, there is no single statute that governs the division of financial interest with respect to property when cohabitating couples separate. There is no such thing as a “common law husband and wife”.
In order to make a claim against property in which you and your former partner have cohabitated, you must establish a ‘beneficial interest’. This can be done in a number of ways.
- Where the property is in your joint names, an express declaration of ownership is conclusive. The declaration can state whether the ownership is on a 50-50 basis or some other combination of shares.
- If there is no express declaration, the Court can imply a constructive trust and the starting point will be assumed as a 50-50 share.
- If there is no express declaration, the Court can look at who contributed what and then allocate beneficial ownership accordingly. This is called a resulting trust. Contributions can either be paying the deposit or being a party to the mortgage on the property.
- Where the property is in the sole name of one of the cohabitating parties, if it was bought as a joint home, the Court will look at the common intention between both of the parties before the property was purchased. Again, the Court can imply either a constructive trust or a resulting trust, as outlined above.
- Where the property is in the sole name of one of the parties of the cohabitation arrangement, the Court has the discretion to award the other person a range of interests or rights under the doctrine of proprietary estoppels. These rights can include granting a beneficial interest, granting a sum of money or granting someone the right to live in the property for a specified time. This doctrine can arise if:
- The clamant mistakenly believes they have a right in the property, and
- The claimant does something to their detriment as a result of believing they have such rights, and
- The owner knows that their ownership is inconsistent with the claimants rights, and
- The owner knows that the claimant mistakenly believes they have said right, and
- The owner either encourages the claimant to act to their detriment (for example, spending money on the property) or indirectly by not stating their ownership.
It is a fact of modern life that many couples choose to live with their partners rather than get married or enter into a civil partnership. It is critical in these situations to consider how your assets and any assets you acquire during your relationship will be affected by cohabitation. Ideally, you should decide this before the cohabitation begins in order to prevent or reduce disputes should the relationship break down. One particularly important aspect that should be addressed in advance is what would or should happen if you have children.
At Prince Evans, we can help you to reflect your arrangements and agreements in a Cohabitation Agreement. Although English law does not formally recognise cohabitation agreements, there is no reason, in principle, whey the courts should not uphold such an agreement. Cohabitation Agreements can also help support claims and beliefs held by the parties with respect to property.
In order to give a cohabitation agreement the best possible chance of being upheld in the courts, the document should address and take into account the following points:
- Both parties must recognise that they intend to create a legally binding document;
- Neither party should feel pressured into entering the agreement – it must be voluntarily entered into of your own free will;
- Both partners need to be separately and independently advised by a lawyer;
- If the reasons for entering into an agreement are intended to avoid litigation under any future legislation that gives cohabitees the right to apply for discretionary financial provisions, there should be full, frank and honest disclosure of your respective assets and liabilities; and
- If the reasons for entering into an agreement are intended to avoid litigation under any future legislation that gives cohabitees the right to apply for discretionary financial provisions, the agreement should be fair. What constitutes ‘fair’ after a short period of cohabitation with no children will not necessarily be the same as what is considered ‘fair’ following many years of cohabitation or the inclusion of a family.
It is always advisable to have important cohabitation agreements and documents drafted by an experienced lawyer who is well versed in the rules and requirements under the law. At Prince Evans, Elizabeth Kornat serves as our resident legal expert in all matters pertaining to marriage, civil partnerships and cohabitation agreements.