Just because you live with someone and are engaged in a romantic relationship, this does not automatically grant you rights in relation to the other’s property or assets.
Generally speaking, in such circumstances, any claims upon separation are dealt with under the Trusts of Land and Appointment of Trustees Act 1996. The law is not interested in factors around the break-up or the needs of the individuals involved. It will focus on the intention of the people when any trust of land was created and, where appropriate, each person’s actual contribution.
Intention to share
In that regard, for a person to gain an interest (or create a trust of land), there must generally be a commonly held intention to share in the property or a promise to share in the property, coupled with a financial contribution to the purchase price, or at least an improvement to the property itself.
Where people have jointly purchased a property, they will have expressed in the transfer deed their intentions regarding ownership and on what basis. If they do not, there is a presumption of a joint tenancy (an equal sharing of the whole).
The registered title is also known as the “legal” title, and more often than not, any beneficial (or equitable) interest will follow the legal title. That is to say that a person could spend significant sums on renovation, but if they are not registered as a legal owner or have not expressed their interest by a deed or declaration of trust, then they will have to establish an implied ‘trust’, based upon a commonly held intention to share, or a promise to share, if they are to have an interest in the property itself.
Alternatively, a person could relinquish a significant interest in a property for little consideration, if adding another person to the title (after purchase), or in buying a property jointly, but failing to declare any increased contribution and interest arising therefrom (by creating a tenancy in common).
Any person considering buying a property with another person or contributing to a property owned by another should seek advice, particularly where the contributions are unbalanced.
People should also be aware of the impact of an engagement to be married upon their separation.
Section 2 of the Law Reform (Miscellaneous Provisions) Act 1970 provides that when a couple terminate their agreement to marry, property in which either or both had a beneficial interest during the engagement is subject to the same rules as determine the rights of husband and wives, in equivalent circumstances (including s37 Matrimonial Proceedings and Property Act 1970). Section 37 provides that where a spouse contributes in money or money’s worth to the improvement of property in which either spouse has a beneficial interest, the contributing spouse acquires a share (or an enlarged share) in that property.
So, the non-owning person must have contributed to improving the property in money or money’s worth, and the improvements must be “substantial”. If the work was substantial in nature and has been undertaken to improve the property, then the contributing person shall be treated as having acquired, by virtue of their contribution, a share in the property (subject to any agreements made between the parties). This is not to say, however, that there is to be an equal sharing of the property, but rather a ‘just’ outcome will be sought.
Section 17 Married Women’s Property Act 1882 also applies as if the couple were married, to any dispute between, or claim by one of them in relation to property in which either or both had a beneficial interest, while the agreement to marry was in force. The engaged party can then seek declaratory relief and orders for sale under this act, but an application made under section 17, must be made within 3 years of the termination of the engagement.
Occupying minor children
Matters between separating couples are complicated further if they have minor children. The fact of occupying minor children will be an important consideration in any application to the Court under the Trusts of Land and Appointment of Trustees Act 1996, whilst Schedule 1 to the Children Act 1989 allows a party to apply for an order requiring either or both parents (of a child) to transfer to the applicant, for the benefit of the child, or to the child itself, any property to which that parent is, or the parents are, entitled (either in possession or in reversion). So, even if a parent has no legal or beneficial entitlement to a property, but they occupy it with their minor children, they may be entitled to seek an interest in it, at least for the duration of the child’s minority, or to be held on the child’s behalf, until attaining majority.
Detailed legal advice should always be sought on separation, but anyone entering into or thinking of entering a co-habiting relationship should also understand the implications of their actions and seek appropriate advice before committing.
