Separating from your partner can be a difficult and stressful time
There will always be a lot to sort out. Including what should happen to the family home. So, what is the legal position in respect of the family home where the parties are unmarried? How does the Court decide whether the family home should be sold? Then how much each party should receive from the proceeds of sale?
In a divorce situation, the Court will look at the concepts of ‘sharing’ and ‘needs’ . These principles do not apply, however, to unmarried couples. Cohabitees have significantly less protection than their married counterparts. Despite popular belief, there is no such thing as the ‘common law’ wife/husband. When considering what rights a separating couple have in respect of the family home, general legal principles (predominately based on property law) apply. A brief overview of the legal position is set out below.
Property owned in one person’s name
It is common to move into a property that is already owned by the other person and for that property to become the family home. In these circumstances the following should be considered:-
Is there already a legal agreement in place?
The first thing to check is whether there is already a legally binding agreement in place in respect of the property. This might be a cohabitation agreement/living together agreement or a declaration of trust/deed of trust.
If such a document exists then generally the provisions of this document will determine what is to happen to the property. Whether the non-owning party actually has an interest in the property. It is possible to set aside these types of agreements in limited circumstances but this can be difficult.
What happens where there is no legal agreement in place?
Where a legally binding agreement is not already in place, the presumption is that the non-owning party has no rights over the property. i.e. the owning party is entitled to 100% of the property and can require the non-owning party to move out of the property (the position may be different if you have children together).
This presumption may be displaced if the non-owning party can establish one of the following:-
- Contribution to purchase price. They (the non-owning party) contributed in money or monies worth to the purchase of the property. There was a common intention to hold the beneficial interest in the property in proportion to the contributions. This is known as a ‘resulting trust’.
- Common intention. There was a ‘common intention’ that they (the non-owning party) would have a beneficial interest in the property and they have acted to their detriment on this. Acting to your detriment may be things like making a contribution towards the mortgage. Or perhaps paying for improvements to the property. This is known as a ‘constructive trust’.
- Promise. The property owner led the non-owner, either by their words or conduct, to believe they have a beneficial interest in the property. As a consequence they have acted to their detriment. It would then be unreasonable for the property owner to insist that they have total beneficial ownership of the property. This is known as ‘proprietary estoppel’.
If the non-owning party can establish any of the above, they may have a claim to a share of the proceeds of sale of the property.
Property owned in joint names
Again, the first point to check is whether there is already a legally binding agreement in place. Again, the terms of such an agreement is usually determinative to the matter (but not always and this can be reviewed in limited circumstances).
If there is no written agreement in place, then where a family home is purchased in joint names (either as a joint tenancy or as a tenancy in common where the parties interests are not declared) the property is presumed to be owned equally, i.e. 50/50. Again this presumption can be rebutted if it can be established that the common intention was different. Either at the time of the purchase or the common intention changed at a later date. Or that either a resulting trust or proprietary estoppel applies (see above).
In addition, the Courts can vary the division of the proceeds of sale. This could take account of monies spent by one party on improvements they made to the property (if this increases the value of the property). Or monies spent on reducing the mortgage or suchlike. This is called ‘equitable accounting’. In some circumstances, the Court can also order the person who remains in the property and enjoying the use of it to pay some compensation (‘an occupational rent’) to the person who has moved out.
What happens if an agreement cannot be reached
The hope is that the parties will be able to agree between them what is to happen to the family home. However sometimes this is not possible. In these circumstances, consideration should be given to attending mediation and/or seeking assistance from specialist family solicitors who can help resolve matters. Ultimately, if matters cannot be agreed then an application can be made to the Court under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA).
The Court has power under TOLATA (amongst other things) to determine each party’s share in the property and whether the property should be sold. When considering this the Court will look at:-
- The intention of the parties.
- The purposes for which the property is held.
- The welfare of any children who occupy (or might occupy) the property.
- The interests of any secured creditors or beneficiaries.
If you have children together then there may be some additional rights available. For example that the property is retained for a party to occupy it with a child, until the child reaches 18. Or maybe finishes full time education or training whereupon the property will then be sold.
If you wish to speak to one of our specialist family lawyers regarding your rights on separation please contact our family law team to arrange an appointment. This is a complex area of law and it is important that early advice is obtained from an experienced family law specialist.
Hart Reade Solicitors are a full-service law firm with offices in Eastbourne, Hailsham, Polegate and Meads. We hold both Lexcel and Conveyancing Quality Accreditation from the Law Society of England and Wales, as well as being an ALEP member. To make an appointment with one of our commercial property Solicitors, please phone our office on 01323 727 321.
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