From myth to reality: The call for reform to cohabitation laws | Part 1

Part one of this two-part article will assess the myth of “common law marriage” and the current rights available for separating couples. Look out for part two where the current law’s fitness for purpose will be put to the test, with proposed reforms also assessed.

The ‘common law marriage’ myth

One in five couples are living together in a cohabiting relationship – equivalent to 3.6 million couples in England and Wales – and for the first time ever in 2021, more children were born outside of marriage than in it.

Cohabiting couples are officially the fastest growing type of family, but the law is severely deficient in providing adequate protection to those persons who do not have the state “legitimise” their relationship by acquiring marital or civil partnership status.

The consequence of this is that a hierarchy of relationship has been created: those whom the law “deems” worthy of protection and those whom the law does not adequately protect.

In many cases, the two biggest assets of a relationship – the family home and pensions – will be dealt with completely differently. The law protecting married couples or those in a civil partnership usually translates into keeping a roof over the head of children under 18 (increasingly through an outright transfer of property) and enables pension sharing to meet retirement needs; this is not the case for cohabiting couples, and we address this further below.

The issue is compounded by the lack of awareness/appreciation of this dichotomy. The data shows that, for many people, cohabitation is not an informed decision with 46% of people in England and Wales believing in the common law marriage myth that there are automatic rights akin to marriage or a civil partnership on separation. What’s more, 55% of people in England and Wales believe there to be extensive financial remedies akin to marriage if the household has minor children.

People are not “opting out” of the protections of marriage/civil partnership, but falling – often unaware – into a gap of legislation.

It is time for Parliament to make some serious reforms to cohabitation law.

Which relationships fall outside of full legislative protection?

The following is a non-exhaustive list of those relationships that would not benefit from the financial remedies available to separating marital/civil partnership couples:

• Couples who have not recorded a marital relationship in the marriage register, and this includes those couples who have had a religious marriage but not completed the civil aspects and registered the marriage
• Couples who have been together for many years
• Families with minor children
• Engaged or formerly engaged couples
• Polyamorous relationships
• Asexual relationships that have the characteristic of an enduring family relationship
• Couples who have reunited after divorce (where a financial remedy order was executed and sealed to end the former matrimonial ties)

The only relationships that benefit from the full legislative powers to grant financial remedy on separation are those couples who are married or have entered into a civil partnership – an increasingly smaller proportion of the general population.

What rights are available for separating couples?

If a person falls into any of the above categories, and are not married/in a civil partnership, then their rights are limited to complex property issues and the narrow scope of financial remedy orders for the benefit of children.

Trusts of Land and Appointment of Trustees Act 1996 (“TOLATA”)

The legislation known as TOLATA, and the surrounding case law, is relevant to unmarried couples. Typically, a person will bring a claim under TOLATA if there is a dispute between them and their ex-partner as to who has a share in the equity of the property; or the size of their respective shares in the equity; and/ or whether the property should be sold.
The law of TOLATA cares little about fairness. The law presumes that the person(s) named on the title deeds are the only person(s) entitled to a share in the equity of the property. Although this presumption can be overcome in certain circumstances, the court focuses on what can actually be proved about the parties’ intentions, rather than focusing on fairness.

This can have a disastrous effect on the financially weaker party to a relationship. If their name does not appear on the title deeds, and there is no written declaration of trust granting them a share in the equity of the property, they may have real difficulty in establishing that they are entitled to share in the equity.

They might be able argue that they are entitled to a share in the equity under an unwritten trust known as a common intention constructive trust (“CICT”). However, this argument would only succeed if they can prove that (i) there was a common intention between them and the legal owner that the equity would be shared, and (ii) they relied on that common intention to their detriment.

Often CICT arguments fail because no common intention existed. By way of illustration: let’s say that Leslie (the financially weaker party) and Andie (the financially stronger party) were in a relationship.

At Andie’s eager request, Leslie gave up work and moved into Andie’s house.

Leslie always assumed that the equity in the property would be shared between them, though there were never any discussions between them about this.

They never married or entered a civil partnership. They had several children, whom Leslie brought up. Over the following decades, Leslie spent thousands of pounds from savings on utility bills, food bills, and family holidays. Leslie also carried out routine renovation work on a regular basis. Andie paid the mortgage payments.

After 30 years, Andie ended the relationship and told Leslie to leave the house. Although this may seem extremely unfair on Leslie, it is unlikely that the court would hold that Leslie has a share in the equity of the property, or a right to occupy the property.

If Leslie had made direct financial contributions to the purchase price or the mortgage, they would have been in a stronger position. This is because the court is much more willing to infer the existence of the necessary common intention for a CICT from direct contributions to the purchase price or mortgage than from indirect or non-financial contributions to the property/ relationship. Similarly, if Leslie and Andie had been married, the Matrimonial Causes Act would apply, and Leslie would have been in a stronger position. In marriage, the issue of who paid for what in relation to property has little relevance.

In summary: the law of TOLATA, in its present form, can create illogical and unfair outcomes. Specifically, the preference given to direct financial contributions to the purchase price/mortgage (in comparison with indirect financial contributions) ignores the fact that it may have been merely a matter of convenience between the parties that one paid the mortgage and the other paid other expenses/utilities/outgoings. Similarly, the law of TOLATA undervalues non-financial contributions.

Providing unpaid childcare, for example, can preserve or enhance the financial position of the other party (namely, by making it unnecessary for the other party to reduce their working hours or employ a babysitter). This, in turn, can ensure that the other party can afford to meet the mortgage payments.

Child Maintenance Service

If a parent has a minor child living with them, they are entitled to seek child maintenance from the “non-resident parent” whilst their child is under 16 years old or remains in full time secondary education (whichever is later).

Child maintenance is payable in every case where there is an unequal split of time as well as in those cases where there is an equal split of time (but not equal sharing of the day-to-day responsibilities).

The child maintenance service has a helpful online calculator that calculates the amount of child maintenance payable where the paying parent’s income is below £156,000 gross p.a.

If the paying parent’s income is above this level, parents can still reach an agreement on the appropriate amount of child maintenance using the child maintenance service formula as guidance.

However, if agreement is not forthcoming or a parent need wider financial remedy for the benefit of a child, then their only recourse is under Schedule 1.

Schedule 1 of the Children Act 1989

This is a rare and highly unpredictable route for financial remedy for those parents with minor children (or children still in full time education where an application has been submitted before the child’s 18^th birthday).

The court can make limited awards to:

• “Top up” child maintenance (where the paying parent’s income is above £156,000 gross p.a.).
• Provide some level of household or carer’s maintenance to help the resident parent meet their own needs for the benefit of that child.
• Make lump sum orders to meet specific capital needs for the benefit of that child (including, allowance for a car, school fees, furnishing costs).
• Seek settlement of property for the benefit of a minor child, which usually means that the property can be used by the child and resident parent to house the child for the child’s minority. However, after this point, the property will then revert back to the non-resident parent.

It is extremely rare for there to be an outright transfer of property, and the current law only supports this in cases where the child currently has a severe disability such that they would be unable to generate income in the future to meet their needs.

Schedule 1 is very limited compared to the remedies available to married couples or those in a civil partnership. For example, pensions cannot be shared, outright transfer of property is rare to the point that it never occurs in practice, and there cannot be ongoing periodical payments to a former partner that are not explicitly for the benefit of a child.

Inheritance rights

Finally, it is briefly worth highlighting that cohabitants whose partner dies intestate (i.e. without a Will in place), are not eligible to inherit from their deceased partner’s estate and are unable to bring claims against that estate. Similarly, cohabitees do not benefit from widower’s pension rights.

Article cowritten by Francesca Skakel (Solicitor in Birketts’ Family Team) and Stephanie Butler (Associate in Birketts’ Property Litigation Team)