In my last blog on this subject, I explained that, in law, there is no legal status of “common law” wife or husband and that, contrary to popular belief, there has not been any such status since at least 1753. I know from my discussions and lectures on the subject that there are still many people who think that if they have lived with someone as if they are married they acquire rights to property or pensions on separation or on the death of their partner. This is largely, however, not true. “Co-habitees” (the legal term for couples living together without going through a legal marriage) have very few rights indeed by reason of their relationship.
Many people believe that by not getting married, they do not have the same difficulties as regards property that they would have if they were married. In some ways this is true, as the law cannot interfere with the parties’ existing legal rights. However, if those legal rights have not been properly considered right at the beginning, even unmarried couples can end up spending a fortune on sorting out what each of them owns if they split up, or if one of them dies without leaving a will.
If a couple buy a house together they very rarely sit down and talk about shares in the property or the legal way they want to own it. Although they will usually have a solicitor or a conveyancer to help them purchase or transfer a property, it is often the case that they are never asked to discuss whether they intend to buy the property as equal partners or whether one of them should have a bigger share than the other because they are putting in more money. Even if they are asked, sometimes there is no proper explanation of the consequences of their decisions. If it is a case of one moving into the other’s existing property there is often even less discussion.
The decision of the court on an argument about property will depend very much on the facts of the case. There are some general principles, illustrated by the examples below. However, circumstances are as varied as people themselves, and even what seems to be a small change in the facts can make an enormous difference to the outcome.
JAMES & MONICA
James and Monica meet and fall in love. They don’t want to get married. They both own their own flats, but decide that they want to buy a bigger place together. They both sell their properties. James gets £40,000 from his property after paying off his existing mortgage and Monica gets £15,000 from hers. They each use the whole of their money for the deposit and costs of their new house and get a joint mortgage. They are asked if they want to be “joint tenants”. They are told that this means that if one dies, the other one automatically gets the whole house. They are also told that if they separate then they will each get half of the value of the house after the mortgage and costs are paid. They are happy with this, sign the transfer document which states that they are buying as joint tenants, and start living together. Three years later, they break up because Monica has an affair with James’ best friend. James is pretty upset about this and wants to get some extra money from the house because he put more in at the beginning.
Can he get a larger share?
No. He agreed to be a “joint tenant” and he has signed the deed. In doing that he has given up any right to ask for a bigger share because he put more money in. He has not been misled and there was no mistake at the time he agreed to it. He cannot change his mind just because he doesn’t like what Monica has subsequently done.
What happens if Monica dies before the house is sold?
Because James and Monica bought the property as “joint tenants”, when Monica dies the whole property belongs to James. It would be different if Monica had done something called “severing the joint tenancy”. If she had done this (by, for example, writing a letter to him telling him) then her half of the house would not come to James automatically. If she had done that, and made a will, then her half would go to whoever she had chosen (even if it is the new boyfriend).
BEVERLEY & JOHN
Beverley and John have lived together for 20 years. They have never had a joint account. They have four children. Ten years ago they bought their house. Beverley comes from a wealthy family and she provided £100,000 towards the purchase. The property is bought in joint names with a joint mortgage for £400,000 which Beverley pays from her salary as a doctor. John works as a free-lance writer. He pays for holidays and looks after the children. They are not asked how they want to own the property and they do not sign any documents which say what share each of them has. They do not discuss it. Last year John decided that he did not want to live with Beverley any more and he left the house. He doesn’t pay anything towards the children. He wants half the property.
Can he get half the property?
Where a co-habiting couple who are both “on the deeds” do not make any agreements about the ownership, the starting point is that the property is shared half-and-half, so there is a possibility that John can get half. If Beverley can show that there was an agreement or an unspoken agreement that the property would be shared unequally, the court will agree with her and John will get less.
What share would John get?
That would depend a great deal on what the court decided had been agreed. It is likely that he would get a share based on half the mortgage because, although he did not actually pay it, he was legally liable for it. So Beverley would get ⅗ less half the mortgage and John would get ⅖ less half the mortgage.
ALFRED & FLORENCE
Alfred and Florence meet in 1955. Florence is already married, but separated. Alfred and Florence move in together and Florence changes her surname to Alfred’s. They have three children. They are an old-fashioned couple. Florence never works, but cares for the children and does all the housework. Alfred does quite well working for the local authority and in 1967 he decides to buy a house. He gets a mortgage on his income and buys a pleasant four-bedroomed house in his sole name. Florence loves the house and spends a lot of time making it look lovely. When her father dies and leaves her £2,000 Florence spends the money on the first overseas holiday for her and Alfred and on a new bed, mattress and sheets. In 1986 Florence’s husband divorces her, but she and Alfred do not get married. Everyone, including their children, think that they already married and they are rather ashamed to confess that they are not.
In 2011, at the age of 75, Alfred falls for a 35 year old Russian interpreter he meets on the train. He tells Florence to leave the house and refuses to give her anything except the bed she purchased.
What is Florence entitled to?
Absolutely nothing. She has not contributed to the purchase of the house and, even if Alfred told her at the time that it was as much hers as it was his, this does not give her any rights as she has not “acted to her detriment” in relying on the promise. She had just carried on doing what she was already doing – looking after the children and the house.
What about if Alfred had died instead of making off with a Russian floozy?
If Alfred had left a will, leaving the house to Florence, there is no problem. If he had not made a will then, because they were not married, everything will go to their children. However, even if the children did not want to share with their mother, Florence would be able to go to Court as a co-habitee and ask for the court to make provision for her.
JESSICA & CARL
Jessica has just got divorced. She has three children and with her divorce settlement she has bought a house for her and the children. She has a mortgage which she is paying from her job as a supermarket manager. She meets Carl, who is fifteen years younger than she is. Carl is a builder. They decide that Carl will move into Jessica’s house. Carl does not have much money and does not pay anything towards the mortgage but he does do some repair work on the roof of the house and he installs three radiators. After eight months Jessica realises that Carl is just taking advantage of her and she asks him to leave. Carl says that because he has done some work on the house he is entitled to a share.
Is Carl entitled to a share?
Unless Jessica specifically told him that if he did the work he would have a share, then Carl is not entitled to anything. Spending time and money on a property does not automatically give rise to any right to a share.
TOM & SIMON
Tom owns his own property. He meets Simon at a “Star Wars” convention, and they fall in love. They think about having a civil partnership ceremony, but do not get around to arranging anything. Simon’s mother dies and leaves him £200,000. Tom’s property, which is worth around £300,000, is a bit of a mess and he and Simon also decide that they want to extend the property to create a huge kitchen to entertain their friends and a large room to display their “Star Wars” collections. Tom tells Simon that if he pays for it then he will give Simon half the house. The cost of the work is £100,000. The work commences and is nearly completed when Tom tells Simon that he has changed his mind, does not want to have a civil partnership and wants him to move out of the house. He refuses to agree that Simon has a share in the property and says that the £75,000 which Simon has already paid was a gift.
What are Simon’s rights?
If Simon can persuade a court that he spent the money because he and Tom had an agreement that he would have half the house, the Court will award him half. Even though the work is not finished, Simon has acted to his detriment in reliance on the promise. Simon would probably have to pay for the work to be finished as that was the agreement. Things might get very complicated indeed if Tom has a mortgage – particularly if it is a large one. Does Simon have half the house after the payment of the mortgage, or before?
What if Tom had died, but had still intended to give Simon half the house?
If the person who is administering Tom’s estate after his death does not accept Simon’s claim, Simon could go to the court for a declaration that he was entitled to half the house in just the same way as if Tom was still alive.
MIRIAM & CHARLES
Miriam and Charles are very sensible people. They decide to buy a property together. They talk it over and ask their solicitor to draw up a trust deed. They agree that they will own half the property each as “tenants in common” and that they will each pay half of the mortgage. If they separate they agree that the property will be sold. They move in and live very happily for ten years. Then Charles develops Multiple Sclerosis. The local authority helps to fund alterations to the property so that Charles can live on the ground floor. Miriam looks after Charles for about five years and takes over paying all of the mortgage, but meets someone else and eventually leaves Charles. She decides that she wants her half of the property and goes to court to enforce the trust deed. If the house is sold, the local authority will reclaim some of the money. Miriam says that this should all come from Charles’ share of the property. Charles cannot afford to rehouse himself as he cannot get a mortgage.
Will the Court order the property to be sold?
The Trust Deed is very clear that the property must be sold when the parties separate. However, the Court can defer a sale and it is quite possible that if Charles can pay the existing mortgage, then the sale might be deferred because of Charles’ difficulties. If Miriam cannot rehouse herself, or is in serious financial difficulties, then an order for sale is likely to be made. It is unlikely that the money owed to the local authority will come only out of Charles’ share as both of them agreed to allow the alterations to be made.
What if Miriam does not leave Charles, but dies before him?
The property is held on a tenancy in common. This means that if Miriam dies, Charles does not automatically have the whole property. Miriam’s half will be dealt with under her will. If she has not provided for him, then he can make an application to the Court for a share of her estate as he was dependant on her and had been living with her for more than two years.
In the next part of this topic, I will deal with some of the ways in which you can try to avoid arguments about property.