With UK marriage rate dropping in recent years, an increasing number of young couples choose to cohabit rather than “tie the knot”. With finances stretched due to increases in the cost of living, and salaries not matching that increase, many couples are choosing to live together and, importantly, pool their resources to get a much needed foot on the property ladder. This also means a commitments to shared finances and mortgages.
The myth that there is a such a concept as a “common law” husband or wife still looms large. No such concept exists. No matter whether a couple have lived together for a year, five years, or fifty years, on separation an unmarried couple will find they do not have the same legal rights and safeguards as those held by a married couple. When parties are not married there is no legal obligation to support their partner financially, irrespective of any financial “dependency” that may have developed in the relationship. This is particularly important when unmarried couples are pooling their income to meet monthly mortgage repayments or deposits for the home they share.
An unmarried partner who is not named as a legal owner of the family home does not have any automatic rights to the property, no matter how long they have lived in that home. To establish an interest a non-owning partner will need to rely on the law relating to trusts and equity.
Where they do jointly own the property then how any dispute over the ownership of the property will be largely determined by the Trusts of Land and Appointment of Trustees Act 1996 (“TOLATA”). The court can order a sale of the property, if one party wishes to realise their interest in the property, but the court cannot alter each owner’s share of the sale proceeds to address a financially disadvantaged party’s “need” for a larger share of the proceeds to rehouse.
Conveyancing solicitors can assist their clients in asking them to consider the key decisions that need to be made when an unmarried couple are committing to purchasing a property together. They should not to be afraid to question their client’s awareness of the distinction between what living together and being married truly entails when it comes to property ownership and dispute on separation.
Conveyancing solicitors should be conscious of the need to enquire and record what advice, if any, the purchasing couple have received about how they will own the property. Understandably, this may go beyond the usual discussion about how the legal title is to be held. However, more often than not, a family solicitor advising an unmarried party in a property dispute should take steps to secure the conveyancing file so they can consider carefully what advice may, or more importantly may not, have been given to either of the owners at the time of purchase and registration.
Where the property is being purchased in one party’s sole name, the conveyancer may well need to consider with the couple whether they wish to enter into a “living together” agreement or a specific declaration of trust. These provide invaluable tools for recording the parties’ respective interests in the property. They can also allow the purchasers to record exactly what they will be contributing towards the purchase price or the monthly mortgage repayments; it can also regulate the way in which the parties will contribute to repairs and maintenance – and importantly how such expenditure may be accounted for and reimbursed on any sale. Arguably, the most significant advantage is that a “living together” agreement or declaration of trust can record the specific mechanism for the sale of the property in the event of a relationship breakdown.
Successive governments have wrestled with the increasing desire among legal professionals and lobby groups for the law to be reviewed and reformed to offer more protection to unmarried couples who live together in property owned by them both or just one party. One recommendation has been to offer unmarried couples the opportunity to “opt-in/opt-out” of creating a legal relationship of potential claims for financial support. It may well be that the natural point for parties to consider such a choice would be at the time of purchasing any property, with a requirement that the parties (or the conveyancing solicitor) confirm that they have been given an opportunity to take legal advice.
The latest recommendations to the government stressed the need for there to be a concerted campaign to raise public awareness over the difference between the rights of married couples and those that choose not to marry. Any program of public information and education will need to involve those legal professionals with whom members of the general public will come into contact the most. Conveyancing solicitors are arguably some of the best placed legal practitioners to deliver such a message. Whether that comes in the form of procedural requirements and reforms or working closely with a firm’s family law practitioners, conveyancing solicitors have a prime opportunity to assist their client’s in avoiding future disputes.