In the case of Re R (Deceased)  EWHC 936, a claim was brought under the Inheritance (Provision for Family and Dependants) 1975 Act (“the Act”) for reasonable financial provision...
Cohabitation and TLATA
There are many different types of family units which reflect our diverse society. For instance, you may choose not to marry and set up a home with a partner as cohabitees in a heterosexual or same sex relationship. Equally, family members may choose, for whatever reason, to live together. A further potential issue is the challenge of getting on the property ladder and parents will often step into the breach to help with the deposit to purchase a home for their offspring.
Cohabiting couples do not have the same rights as married couples or those in a civil partnership and the concept of ‘common law’ marriage is a myth.
If you are cohabiting with a partner, it is important to take steps to secure your financial position at an early stage, as living together does not necessarily give you any legal status.
You can buy a property as joint tenants or tenants in common. In the former option, the basic legal principle is that you own the property equally. This is an important consideration as any division of the proceeds of sale will have to follow the title deeds and is therefore split 50:50, even if one party contributed more money to the purchase of the property at the beginning or subsequently. There are only limited exceptions where the presumption of a 50:50 split will not apply.
Generally, if you purchase a property as tenants in common, you hold the property in unequal shares because of an unequal contribution to the purchase. You would have a Declaration of Trust drafted at the time of purchase setting out your respective shares in the property.
In many cases, however, the family home is bought in a sole name only which could be for any number of reasons. Although only one name is on the mortgage, the non-owning party may have paid towards the purchase or the plan is for them both to pay the mortgage. In that situation, if the parties separate then the non-party has to show that they have acquired a beneficial interest in the property. This can be evidenced by discussions at the time of purchase, financial contributions, the purpose of the purchase (e.g. to provide joint family home). You will need to establish whether there was any intention at the outset that the property was to be shared.
This area of law can be a minefield and the sad reality is that relationships break down. To help avoid litigation if you decide to separate further down the line, it’s important to give careful consideration to how you buy your property. If parents are making a contribution, will it be protected in some way by way of Trust Deed or Agreement? If the shares are unequal, you should consider a Declaration of Trust setting out exactly what percentage shares each of you are to have in the property.
Alternatively, a cohabitation agreement can be drawn up. This is a contract between you and your partner regarding arrangements such as property, bank accounts and debts if the relationship breaks down. A cohabitation agreement should be carefully drafted and you should seek independent advice to ensure it is legally binding. It may seem unromantic and not something to consider when you are happy in a relationship but, with planning and pragmatism, the expense and stress of going to Court can be avoided.
Ending a cohabitation
In relation to property, the implications of the different forms of joint occupancy agreement, joint tenancy and tenants in common can have an impact on inheritance. If you and your partner separate, one of you may force a sale, although this can be complicated where there are children involved.
If a cohabitation ends and you cannot reach agreement on issues involving your property, finances and children, a Court application will be needed to resolve the situation. These are known as TLATA claims.
The Trust of Land and Appointment of Trustees Act 1996 (TLATA) makes provision for disputes that might arise when an unmarried couple who own a property together decide to separate.
It gives the Courts powers to deal with the following claims:
- Forcing the sale of the property or land
- Recovering financial interest in the property by parents or grandparents
- Determining the shared owned by each party
Under TLATA, applications can be made to resolve a dispute concerning what should happen to a property. Where there is a dispute as to beneficial ownership, the court can deal with this. The Courts’ powers are limited as to disposal of the property. It can order a sale but it cannot order a transfer of property. The court must take into account any minor children of the family who are living in the property. This is a complex area of law and applications brought under this umbrella must be considered very carefully and expert legal advice obtained.
Mediation can be an effective alternative solution to court proceedings and parties will be encouraged to look at other forms of dispute resolution. We strongly recommend seeking legal advice if you are in dispute with your partner.