A Cautionary Tale for Unmarried Couples
Over the years there has been a significant increase in unmarried couples . We are being constantly reminded that there is no such thing as “Common Law” Husband and Wife, and as such the legal framework used to address a dispute arising for an unmarried couple on separation is completely different to the legal framework which would be used for the same couple had they been married.
In a recent case reported in the Telegraph on 19th July 2016 Mr Farrer, a Builder, was ordered to hand over a million pound property to his former partner, and mother to the party’s three children, Ms Cahill. The property in question was a four bedroom property situated in London which was purchased in Ms Cahill’s sole name in 2007. Mr Farrer had paid the deposit of £140,000.00 at the time the property was purchased. It was Ms Cahill’s position that the property was purchased in her sole name to provide her with financial security. Mr Farrer contested this and is reported to have said that Ms Cahill….. “knew and understood him to be the sole absolute owner”. The trial Judge preferred Ms Cahill’s evidence hence his decision for the million pound property to be retained by her.
Unlike married couples, when separation occurs co-habitants do not have automatic legal claims against one another arising out of their relationship. This can often lead to one if not both parties being left in a vulnerable position especially if there have been children born out of their relationship.
There are limited legal remedies available to separating unmarried couples to determine issues relating to a property(ies) which may be the subject matter of dispute between them.
The majority of property disputes are determined by section 14 of The Trust of Land and Appointment of Trustees Act 1995. This Act enables a party to invite the court to determine how the beneficial interest of a property is held. Under this Act the court has discretion to either order or postpone the sale of a property or order a transfer of ownership from one party’s name to the other.
If a Trust exists then the court will need to consider the intention of the person(s) who created the Trust, the purpose of the property which is subject to the Trust, the interest of any secured charges registered against the property and the welfare of any minor child(ren) who may occupy the property.
If a Trust does not exist then the onus will be on the person pursuing the application to demonstrate to the court that they hold a beneficial interest in the property arising out of a Constructive, Implied or Resulting Trust. It will also be necessary for the court to consider whether there exists a common intention between the parties by something said, recorded or by drawing inferences from one or both parties conduct. It would be essential for the party pursuing the claim to make sure that where possible they have clear documentary evidence supporting their position. For this reason applications of this nature can be an extremely time consuming and costly exercise.
Costs in this type of application are also important as one party can be ordered to pay the costs of the other party if they are not successful with their application, as was the position in the featured case where Mr Farrer has been ordered to pay legal costs to the tune of £40,000.00 within one month with more bills to follow.
It has never been more important for unmarried couples to ensure that their property rights are protected irrespective of whether the property in question is intended to provide a home for the family or whether it is to be used as an investment property. For further advice about how you can protect your property interest or to discuss a cohabitee dispute please contact Associate Solicitor Kelly Pougher at kpougher@thursfields.co.uk or 0121 724 4000.
