Co-habitees: a stitch in time saves nine (and a lot of money)
The recent case of a Mr Turner and Ms Bouchiba has been widely reported in the press: Ms Bouchiba was awarded a 50% share in a property legally owned by Mr Turner. The case has brought the legal rights of cohabitees upon separation under the spotlight and, hopefully, helped to put another nail in the coffin of the mythical ‘common law spouse.’
The rise of cohabitation
There is currently no legal definition of what amounts to cohabitation. It could be described as a living arrangement whereby a couple who is not married or in a civil partnership live together in the same home. Cohabiting couples are the fastest growing family type in the UK with 3.3 million families documented in 2016, more than double the 1.5 million reported in 1996 (Office for National Statistics, 2016). Research by “Resolution” found that 47% of the public aged 18-34 think cohabiting couples have the same legal rights as their married counterparts; a staggering proportion who are gravely mistaken.
The law gives cohabiting couples fewer rights upon separation (and death) than married couples or those in civil partnerships. There is no automatic right or remedy created by just having a relationship with someone, regardless of the length of cohabitation. If that relationship breaks down therefore, the law does not provide for any clear cut remedy to allow the financially weaker party to make financial claims against the other.
Many people in cohabiting relationships do not appreciate how they could be financially exposed if their relationship breaks down. A financially weaker party has no right in law to seek maintenance for him or herself, and no scope to share in the other party’s pension irrespective the wealth of the other party. This is in stark contrast to the legal rights of married couples on divorce.
With the lack of explicit statutory provision for the division of property upon separation, most cohabitation disputes over property will be dealt with under the Trusts of Land and Appointment of Trustees Act 1996 (“TOLATA”). This involves establishing an interest in a property owned by the other party and is dependent upon the production of compelling evidence.
Applications under TOLATA call for a detailed understanding of the parties’ intentions and promises. They care little for the concept of fairness, unlike the Matrimonial Causes Act 1973 governing the provisions for married couples. As guidance therefore for couples purchasing property while cohabiting, if a property is intended to be owned jointly then it should be registered in joint names. If a property is to be owned jointly but in unequal shares then this should be recorded clearly and ideally by a declaration of trust.
Case by case
While it may not be impossible to establish a beneficial interest in a property owned by the other party later on, such disputes can be complex, expensive and require risky litigation. The starting point in these proceedings will be the gathering of clear and compelling evidence of express agreements, direct financial contributions or reliance by one party upon a promise made by the other. Each case will be determined on its own merits and the historic conduct of parties is crucial evidence, especially where there is no conclusive documentary evidence to prove ownership. A TOLATA case looks backwards at what has gone on before as opposed to looking at the parties’ needs now.
Cohabitation agreements are another tool to address a whole range of rights and responsibilities in relation to a property both during and after a period of cohabitation. A cohabitation agreement can help avoid the costs of litigating respective interests in the property after separation. While there is some debate about the enforceability of a cohabitation agreement, it is a commonly held view that such agreements are enforceable and governed by the general principles of entering into a contract.
There is clearly a need for reform in this area of law. Resolution’s Manifesto for Family Law proposes that “cohabitants meeting eligibility criteria indicating a committed relationship wold have the right to apply for certain financial orders if they separate. This right would be automatic unless the couple chooses to opt out”. This suggestion reflects the recommendations of the Law Commission report (Cohabitation: The Financial Consequences of Relationship Breakdown, Law Com No 307). A Cohabitation Rights Bill has been introduced in the House of Lords and is now at the Committee stage. If it is passed, it will enable a former cohabitant to apply for financial remedies where certain criteria are satisfied. Whether or not this will actually become law remains to be seen but in the meantime cohabitees would be well advised to abide by the adage that a stitch in time saves nine, rather than the belief that all is fair in love and war!
Victoria Sterritt is Associate at law firm Seddons