For Unmarried Couples: What Happens to the Family Home if we Separate?
One question we are often asked is what happens to the family home that a couple live in when they separate if they are not married. The law relating to what happens to the family home is very different for those who are not married, compared to those who are. Where a couple is not married, the law applicable to a separation is different and cohabitees do not have the same rights or claims over each other as married couples. There is call for the law to change in this area but as yet it has not done so.
If there is a dispute over the ownership of a property in these circumstances then the applicable legislation that would apply to the dispute is the Trust of Land and Appointment of Trustees Act 1925 (TOLATA).
The starting point would be to see how the property is owned as per the records at the land registry. There are two different ways which a property can be legally owned; being Joint Tenants or Tenants in Common:
- If a property is owned as Joint Tenants, this means that the parties own the entire property together in equal shares. Therefore, if one joint tenant was to die their 50% share automatically passes to the other joint tenant.
- If the property is owned as Tenants in Common, this means the parties each hold a specific share of the property (which can be 50%) but the key difference is that if one tenant in common was to die their share does not automatically pass to the other, but rather falls under the terms of their Will (or if they do not have a Will the rules of intestacy apply. Tenants in common can own the house in equal or unequal shares depending on what was agreed at the time of purchase.
In the event that the parties own the property jointly then the starting point is that there should be a 50/50 division of any net equity. This can be achieved by selling the house and dividing the net proceeds of sale equally, or by the parties agreeing what the net equity is with one of them ‘buying out’ the other.
The presumption is where the house is bought in joint names is that the parties own the property equally in law and in equity.
However, that presumption can be displaced by evidence that the parties common intention was, in fact, different either when the property was purchased or later. That common intention is to be objectively deduced from the conduct and dealings between the parties. Each case will turn on its own facts and financial contributions are relevant but there are many other factors which may enable the court to decide what share each party is entitled to.
For example, if one party argues that they are entitled to more than 50% of the equity, they will have to show that even though the legal ownership is joint that the beneficial ownership should be different. They would have to rely on Trust principles to show to the court that there is a Resulting or Constructive Trust. This can be very difficult to do and will come down to evidence. The burden is on the party who wishes to move away from a 50/50 division to show that they should benefit from a resulting or constructive trust i.e. the legal title should be departed from.
Similarly, if a property is owned in unequal shares, or if it is owned in the sole name of one party, that too is the starting point when it comes to dividing any net equity in the property, and if one party wished to argue that they were entitled to more than what their recorded ownership is, the legal burden would be on them to argue that their beneficial interest in the property should be different.
This is a very complicated area of law, but one that we at Maguire Family Law are experts in. We have assisted unmarried couples who are separating countless times, and give clear realistic advice from the outset in relation to these kinds of disputes. We can advise and create an agreement based on your individual requirements. If this is something you think you might need help with, please call us today.