Couples who live together in committed relationships (cohabitants) often believe they have some form of legal status or protection. That belief is wholly wrong.
Despite what the general public still believe, there is no legal relationship in England and Wales of common law husband or wife. The same is true where same-sex couples are concerned.
The stark reality is that cohabitants who have not entered into a legally-recognised relationship – either marriage or Civil Partnerships – may have very few rights. It makes no difference that they may have lived together for many years. They still will not be entitled to the same protections that spouses or Civil Partners enjoy.
Joint tenancy is a mechanism for two (or more) people to share an interest in the same property. The owners are called joint tenants. Each joint tenant shares equal ownership of the property – one joint tenant cannot have a larger ownership than another. A key concept in joint tenancies is the right of survivorship. This means that if any one of the joint tenants dies, the remainder of the property transfers automatically to the survivor/s. The transfer happens because of how the property is owned. It happens even if the joint tenant provides for something different to happen with his or her property in a Will.
Tenancy in common is a mechanism for two (or more) people to share an interest in the same property. The owners are called tenants in common. Tenancies in common differ from joint tenancies in two key ways:
Legal ownership refers to how the legal title to property is held. It may refer to land or other property for which an ownership document is generated (for example, a car, shares, a bank account). The person (or people) named on the ownership document are the legal owners.
Beneficial ownership refers to who is entitled to the ultimate use and benefit of property. Often, the legal and beneficial owners of property will be the same people. However, our legal system recognises that they need not always be. Property might be owned by one person but somebody else altogether may be entitled to use it, enjoy it and benefit from it. A good example of beneficial ownership is a trust arrangement: the trustee is the legal owner of the trust property, but it for the benefit of a beneficiary. The trustee (the legal owner) has a duty to use the property in a way that furthers the beneficiarys (the beneficial owner) interests.
A declaration of trust is the name given to a document that sets out who is the beneficial owner of a property. If there is more than one beneficial owner, the declaration of trust will say whether the co-owners are tenants in common or joint tenants. If tenants in common, it will say what shares they each own. A declaration of trust should be in writing. There may be other formalities that must be observed, depending on the type of property owned.
Resulting and constructive trusts are legal concepts for deciding the beneficial owners of property where there is no declaration of trust. The rules on how and when a resulting or constructive trust arises are quite outdated and frequently poorly understood.
Intestacy occurs where a person dies without leaving a valid Will describing what should happen to their property. The person is said to have died intestate. There are rules that say how property should be divided when a person dies intestate.
As can be seen from the terminology above, the concepts that apply to co-ownership of property may become complicated. This is not a problem for those who are married or in Civil Partnerships: courts dealing with the financial fallout from the breakdown of a marriage or Civil Partnership are not limited to simply ascertaining the legal and beneficial ownership of property. A court in those situations can actively adjust ownership to ensure a fair outcome.
This power of adjustment is not available in disputes between cohabitants. Cohabitants must instead look to the concepts identified to see whether they have a claim in relation to property.
Often, cohabitants most valuable asset will be the family home and other land they have bought together.
Where the land is in England and Wales, the first enquiry should be legal ownership. Is the property owned in joint names? If yes, is it owned as tenants in common or as joint tenants?
Beyond legal ownership, is there any declaration of trust? For properties bought after 1 April 1998, the transfer document (Form TR1) requires co-owners to describe the arrangement for beneficial ownership. This is a type of declaration of trust. If ownership is not dealt with on the Form TR1, there may be a separate document dealing with beneficial ownership. This may have been completed at the time the land was bought, or at some later date.
If there is a declaration of trust, then beneficial ownership is easy to establish. Unless there is something that might invalidate the declaration (such as fraud, duress or mistake), that is the start and end of the enquiry. The cohabitants will own the property in accordance with the declaration. A court will not allow cohabitants to go behind the beneficial ownership described in the declaration of trust.
If there is no declaration of trust, a dispute about land ownership between cohabitants will be resolved as follows:
but it was not possible to ascertain precisely enough their common intention about beneficial ownership, the court could decide what share was fair. The court would impose a resulting or constructive trust accordingly. In deciding, the court would have regard to the whole course of dealing between them in relation to the property.
Where land is owned outside of England and Wales, the situation becomes more complicated. The general rule is that, where there is a dispute about land, it should be settled in the country where the land is owned. But this in itself gives rise to problems. For example, many Continental legal systems do not recognise the concept of beneficial ownership. For them, there is only legal ownership. Some countries do not permit two people jointly to own property, and so it might be legally owned by one cohabitant only for this reason. Declarations of trust, if they exist at all, may be far less common in relation to land owned overseas.
Whether a cohabitant has any claim in relation to land bought abroad will depend on the legal system in the country where the land is owned. If a court in that country decided a cohabitant had no claim in relation to the land, an English court would not be entitled to review that decision, no matter how unfair it seemed. Nor could an English Judge give a cohabitant a greater share of property in this country by way of compensation.
The English courts role in these cases is to establish beneficial ownership. Once established, the Judge is not entitled to alter the ownership. This remains the case even if fairness requires an adjustment. For example, if one cohabitant had assets that significantly exceeded their needs, whilst the other had only limited assets, a court here still could not tinker with how the land was owned to achieve a fairer outcome.
If one cohabitant owns land absolutely – both legally and beneficially – then the other cohabitant has no claim to it at all.
Common examples are bank and building society accounts, shares, vehicles, and endowment policies. Principles of joint tenancy and tenancy-in-common also apply to property other than land.
Declarations of trust are possible in relation to property other than land, but are uncommon.
The principles that apply to establish who beneficially owns land also apply to help resolve who beneficially owns other property. So:
It will rarely be cost-effective to bring court proceedings to resolve questions of ownership to property other than land. In most cases, the expense of the proceedings will quickly outstrip the value of the property.
Where the property is outside of England and Wales, the issues described above in relation to disputes about land apply. The rules might be slightly more relaxed, depending on the type of property, so as to enable a court in this country to resolve a dispute about ownership.
As above, if one party owns property absolutely – both legally and beneficially – then the other has no claim to it at all.
Where cohabitants have joint debts, they are jointly and severally liable for them. This means that the person or organisation owed the money – the creditor – is entitled to go after either or both of them for repayment. The creditor can choose who it thinks it will be easier to get the money back from. It is then a question for the cohabitants to resolve between themselves whether one owes the other money for a joint debt repaid to a creditor.
Debts in the name of one cohabitant only will remain their responsibility after the end of the relationship.
Cohabitants have no right to be maintained by each other. It makes no difference that they might have lived together for many years. So, a cohabitant who separates will have no claim against his or her former partner to help meet living costs. There is no power to order maintenance to ensure a fair outcome, or to ensure a cohabitant is not left in dire need.
This compares starkly to the claims for maintenance that couples who have married or entered into a Civil Partnerships have, if their relationship ends.
What is said above about maintenance applies only to claims between cohabitants. Where there are children, maintenance claims for the childrens benefit will usually be possible. A cohabitant might benefit indirectly from such financial support. For example, there are some situations where the court will order one parent to provide a home for a child until the child is independent. This could provide the parent with whom the child lives – a former cohabitant – a place to live until the child is an adult. However, the former cohabitant will not own the property and would be required to leave it when the child no longer needs it as a home.
One area where cohabitants enjoy some limited protection is in the event of the death of a partner. The rules about intestacy do not allow for a cohabitant to receive his or her partners property. However, they can make a claim for financial provision against the estate of a cohabitant who has died without making appropriate provision for his or her family and dependents.
Likewise in relation to fatal accidents: the Fatal Accidents Act 1976 entitles a cohabitant who has lived in the same household as the deceased for at least two years before the date of death to bring a claim.
In both cases, the cohabitation must be ongoing at the date of death. A former cohabitant would not be entitled to make a claim (unless he or she could show there was ongoing financial support being provided by the deceased).
As described above, special rules apply where cohabitants are joint tenants of land or property. On the death of one joint tenant, the survivor will automatically receive their share of the property. This happens even if the deceased is intestate or leaves a Will that claims to leave the jointly-owned asset to somebody else. This is because of the right of survivorship applies to take property owned as joint tenants out of the deceaseds estate.
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Cohabitation is an area in the law regularly viewed by many in the profession as being of out of step with the growing number of cohabitees in the UK and the need for a statutory framework for the disposal of such cases. There are frequent calls for reform but until changes are made, the courts… Read more »