What might happen to your home if your relationship ends? asks Beth Woodward, a family lawyer at Neves Solicitors. Are your expectations realistic?
A lot depends on if you are married, or cohabitating. If a couple are married, the law has a wide discretion to take into account the parties ’respective contributions both in money, in moneys worth, or as homemaker. It also takes into account both parties’ reasonable needs, and prioritises the needs of minor children.
If expectations are agreed in advance and set out in a pre-nuptial agreement, this is a factor the court will take into account when considering how assets should be divided.
Interest
The law for cohabitants is much less flexible. Contributions and expectations are usually only relevant if reflected in the legal title to the home. If the documents of title do not reflect what one persons sees as the true picture, that person has to show that beneath the legal title there is a trust apportioning ownership differently (that their “beneficial interest” is different from their legal interest).
A cohabitant may need to show that even though the property is in the name of the other, they have an interest. They may also need to show that if the property is in joint names, that it is not held in equal proportions.
The recent case of Stack v Dowden [2007] confirms that it is not an easy matter to establish a beneficial interest. To successfully claim a beneficial interest, the cohabitant will have to show either a contribution to the purchase price or a common intention at the time of purchase that they should have a beneficial interest. Subsequent conduct showing they acted in reliance on that agreement can be used as evidence of such an agreement.
If there was no express agreement, the intention of the parties will be inferred from conduct, but that conduct must be referable to the acquisition and substantial. Housekeeping and looking after a family will often not be taken to show common intention.
Where there is a child, the main carer may be able to retain the home, or use of the greater share of the proceeds until the child grows up, by applying for an order under The Children Act 1989.
Everyone wants to think their relationship will last forever but the reality is many do not. It is never easy to have this conversation but far more difficult if you do not and the relationship breaks down.
Understand
Couples need to discuss what their expectations are when they buy their first house together, or move into a home owned by one of them, or get married so that they come to a common understanding of their goals, understand the extent to which their contributions count towards their interest in the home, and have similar expectations of what should happen if they separate. These common intentions should then be reflected legally.
This could be in a cohabitation agreement, or a pre-nuptial agreement. It involves ensuring that the legal title to the home accurately reflects each person’s interest in it, and that there is a Will in place specifying what should happen to each person’s share in the property on death.
This will allow a couple to enter into their new life together with a full understanding of each other’s goals and expectations about their lives together, and could avoid a huge amount of bitterness and regret.
Beth Woodward deals with all areas of family law including cohabitation and pre-nuptial agreements. She is a collaborative lawyer.
