Dispelling the Myth

Dispelling the myth of “common law spouse”

It is a common misconception that English law recognises the “common law spouse”. There is no grey area: you are only a spouse if you are married, no matter how long you have lived together. At the end of a relationship, unlike married couples, cohabitants are unable to benefit from the flexible and discretionary provisions of family law. The court can only decide any dispute on the contributions and intentions of the parties.

So what does this mean in practice?

Spouses have entitlements in respect of property regardless of whether their name appear on the title deeds. A cohabitant whose name does not appear on the title deeds to the property has no such automatic rights in the event of a dispute.

In order for a cohabitant to protect his or her interest it is essential for interests in property to be properly documented and registered. Many people fail to take the proper action when they are buying a property, perhaps believing it to be "unromantic” amidst the excitement of buying a property together. The importance of making intentions clear at the outset cannot be overstated.

There are two different types of interest: legal and beneficial.

If both cohabitants have a legal interest in the property, they will usually be either “joint tenants” or “tenants in common”. If they are joint tenants, if either cohabitant dies, their share in the home will automatically pass to the survivor. This will occur even if the deceased has a will which attempts to leave that person’s share of the property to someone else. Where a tenancy in common exists each party is free to deal with their share (which may not necessarily be equal), and if either cohabitant dies their share will pass in accordance with their will, or, if no will exists, in accordance with intestacy rules. It is possible to convert a joint tenancy into a tenancy in common by a procedure known as severance. This simply requires one party to notify the other in writing of their wishes as far as the home is concerned, and can be done against the wishes of the other cohabitant.

If the property is held in one cohabitant’s name that person holds the whole of the legal interest and is the “legal owner”. It makes no difference that the cohabitants have lived as man and wife. In order to share in the value of the property, the other cohabitant must establish a beneficial interest in the property and therefore that the legal owner holds the property subject to that beneficial interest.

If when the house is purchased the interests of both parties are clearly stated in a deed of trust it may prevent a great deal of heartache, and legal fees, in the event of a breakdown of the relationship. If there is no deed of trust then the non-legal owner must establish an interest by showing a “resulting trust” a “constructive trust” or “proprietary estoppel”.

Even if one of the cohabitants already owns the property when cohabitation begins, a deed or declaration of trust should still be drawn up to regulate the terms of the cohabitant’s ownership of the property.

Usually only direct financial contributions to the purchase of a property, whether by contribution to the initial purchase price or to the mortgage, will be sufficient to prove a resulting trust. Paying for the utilities, furnishings or decorative improvements will usually be insufficient. The extent of the beneficial interest will depend on the level of the contribution. If a cohabitant can show that there was a common intention to share the ownership of the property and that he or she acted to their detriment in relying on that intention then it may be possible to prove a constructive trust. If the cohabitant who owns the property has promised the other that they have an interest in the property, and in reliance on the promise the other has acted to his or her detriment, this may be enough to establish a beneficial interest in the property.

Proving an interest in any of these ways is likely to involve court proceedings that would be avoided if proper advice had been taken at the outset.

Just as cohabitants have no automatic claims to property they have no right to receive maintenance payments for themselves from a partner after a relationship breakdown, no matter how long the relationship has been. There may be entitlement to receive payments on behalf of a child of the relationship.

Even after death cohabitants are not treated in the same way as a married person. If there is no will there is no automatic benefit under the intestacy rules as there is for a spouse, and although cohabitants may make claims under the Inheritance (Provision for Family and Dependants) Act 1975 which may assist to retain a jointly held property the claim is only likely to be resolved after legal intervention.

A cohabitation agreement would provide evidence of cohabitant’s intentions in relation to their property. It must be in writing: it may not be enforceable, but it is the best method currently available to provide for what happens if a relationship breaks down. It should be used together with a deed or declaration of trust referred to above.

For advice on any of the above please do not hesitate to contact our Family Team at Parrott & Coales Solicitors on 01296 318500