In the past few decades, and especially in recent years, there has been a significant increase in non-marital cohabitation in the United Kingdom, while the number of married couples has declined.
The latest statistics from the Office for National Statistics (ONS) show that nearly 18% of all UK households are cohabiting stepfamilies, that is around 3.5 million people.
However, unfortunately, the reality is that, although many believe otherwise, cohabiters do not have the same legal rights as spouses or civil partners, particularly in relation to property claims.
The myth of “common law marriage” still prevails, but it has no legal basis.
What are the legal rights of separated unmarried couples?
When parties marry and get divorced, the spouses are protected under the law even when the property is owned by one party and not the other.
Cohabitants do not have the same protection, and disputes can arise over property ownership and beneficial interests when cohabitants separate. This is often the case when the property is owned by only one party.
Cohabiting couples are subject to limited legal remedies compared to married couples or civil partners.
They are not afforded the same protection by the courts when a dispute arises and often what is stated in the Land Registry documents prevails.
For example, even if you have contributed a larger deposit towards the property than your partner, if the Land Registry documents state that the property is jointly owned, the position will be that any equity in the property must be split equally between you. The opposite can be said in rare cases, but it is difficult, time-consuming and expensive.
What happens if separating spouses are in a dispute over their property?
When a dispute arises in relation to property outside the marriage, cohabitants will need to make arguments about their beneficial interests in the property such as contributions made and reliance on those that are detrimental to them.
The Trusts of Land and Appointment of Trustees Act (TOLATA) 1996 provides the basic legal framework for resolving ownership disputes between cohabitants and other parties with interests in land held under a trust.
Resolving these disputes requires an application to court where the judge will consider the intentions of the person creating the trust, the purposes for which the trust land is held, the welfare of any minor who occupies or is reasonably expected to occupy any trust land as their home, and the interests of any secured creditor of any beneficiary. The court can issue a sale order or postpone the sale of the property.
The costs and time involved in TOLATA proceedings can be significant, and it is important to consider whether alternative dispute resolution methods are appropriate for your case.
However, when an agreement cannot be reached, TOLATA provides basic protection to those with legitimate interests in property owned under the trust.
What protections can cohabiting couples put in place to prevent conflicts?
Prevention is better than cure in the case of cohabitation. To avoid any doubt or potential lawsuits if a cohabitation relationship breaks down, when purchasing a property with a partner, couples should have a declaration of trust.
This is a document that can be sent to the Land Registry and is legally registered by this body. It provides clarity as to which partner owns which share of the property and mitigates conflicts by clearly defining the beneficial interests of each cohabitant in the property.
Using the previous example of unequal deposit contributions, if one party contributes 60% of the deposit and the other contributes 40%, the Declaration of Trust could provide for the equity in the property to be split 60/40 in the event of a sale of the property. Or it could state that both people receive your deposit first and then any additional shares are split equally between you.
How to get a declaration of trust
A declaration of trust is a practical and effective tool to mitigate uncertainty and reduce the risk of conflicts between cohabitants. By explicitly defining each party’s beneficial interests, it provides clarity and ensures that their intentions are legally enforceable.
It is the duty of a solicitor who is instructed on the sale and purchase of real estate (known as a conveyancer) to advise their clients on the importance of a declaration of trust and to ensure that their clients’ intentions are properly documented.
Cohabitants should be encouraged to enter into a declaration of trust when purchasing property to avoid disputes and financial uncertainty. A declaration of trust is a crucial tool to mitigate uncertainty and ensure that the intentions of cohabitants regarding ownership of real estate are legally enforceable.
These documents have a significant impact and although they may seem unromantic, they are essential for self-preservation in the event of a relationship breakdown.
What else can cohabiting couples do to avoid arguments?
Another option, which can be used in addition to a declaration of trust, is a cohabitation agreement. Although cohabitation agreements may not be automatically enforceable, unlike declarations of trust, they can help mitigate financial risks in cohabiting relationships.
Cohabitation agreements are customized documents drawn up by a family lawyer to reflect the individual and shared financial and business responsibilities of both partners.
It is often viewed as similar to a prenuptial agreement. Both people will need to provide a full financial disclosure, i.e. telling the other person what money and assets they own.
Cohabitation agreements can contain broader points than a declaration of trust because they are not limited to property arrangements only. This means they can explicitly state who pays what within the household, how money will be structured, and the financial responsibilities for any children the couple has.
For cohabitants purchasing property, the Declaration of Trust will be the most important document as it is registered by the Land Registry.
However, a cohabitation agreement can supplement the agreements in the declaration and can be used as a formal agreement in the event of a dispute if the spouses separate.
Why is it important to get legal advice?
Seeking advice from a family solicitor and conveyancer in the early stages of purchasing a property means that couples have the right information from the start.
Understanding that unmarried couples do not have the same property rights as married people is key, and this can only come through access to education.
While legal protections are not currently automatic, there are actions couples can take to prevent uncertainty and avoid litigation in the future.
Sophie Croft is a Senior Fellow at Stowe Family Law
