Know your cohabitation rights! 5 definitive factors in disputes

Friends or family, married or not, the financial stakes can be significant when dealing with property matters; they can cause a lot of stress and possibly undue hardship on parties that are living together. This area is extremely complex and legal advice should be sought, but it is also important for anyone involved in a cohabitation dispute to establish a basic understanding of cohabitation rights.

Cohabitation and disputes – the basics

When two or more people own property either as Joint Tenants or Tenants in Common, they are known as co-owners; if you also live together in the property, you are known as cohabitees.

Cohabitation can give rise to various types of property disputes. For example:

  1. You separate or fall out and one owner/cohabitee wants to sell and the other does not;
  2. A dispute arises as to how the equity from sale of the property should be divided; or
  3. Whether or not a cohabitee has a legal claim or beneficial interest, even though they are not a legal owner of the property.

If you are considering cohabiting with your partner, a family member or friend, it is often advisable to have a Cohabitation Agreement prepared. This is a legal contract between you setting out the terms of ownership and occupation and can also determine what happens on sale, or separation so there can then be no argument or dispute.

Where there is no such agreement or declaration as to ownership, we are often called upon to assist co-owners or cohabitees to try and resolve the ensuing dispute. In a number of cases, the matter does have to be referred to the Court for the final decision to be made.

Cohabitation rights – what are your options?

If there is a dispute between co-owners of a property, you have a number of options:

  1. Try and resolve the matter directly by agreement;
  2. Instruct solicitors and try to resolve the matter by exchanging letters;
  3. Mediation; or
  4. As a last resort, an application can be made to the Court for a judicial decision as regards the dispute.

In the last case, you can apply to the Court under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 (‘TLATA’) for one of the following orders:

  • For the property to be sold;
  • For the sale to be postponed, or
  • How the equity in the property should be divided between the co-owners or beneficiaries.
Know your cohabitation rights! 5 definitive factors in disputes 1

What will the Court consider?

When considering cohabitation rights, the Court must take into account the factors listed under section 15 of TLATA, which are as follows;

1: The intentions of the person or persons who created the trust

The court will first look at the initial intentions of the co-owners, for example, how you intended to hold the property when you first purchased it – did you intend to hold the property as Tenants in Common and, if so, in what shares i.e. 50/50 or otherwise dependant on how much you each paid?

The court will presume that any written declaration between you was your intention. To rebut that presumption will be a heavy burden.

2: The purposes for which the property subject to the trust is held

If the property was purchased with the purpose of providing a home for you or your partner, the Court will question the need for an order for sale if the property is still needed as a home.

If the property is no longer required as a home, you and your partner have alternative accommodation, and one party cannot buy the other’s share of the property, the Court will be willing to grant an order for sale.

3: The welfare of any minor who may occupy the property

The court is very unlikely to grant an order for sale of a property if it is (or may be) needed as a home for a child. The welfare of any child is a very important factor for the Court when considering cohabitation rights. The Courts may postpone an order for sale until any child living at the property has reached the age of 18, save where the home is considered to be beyond the child’s reasonable needs.

4: Whether promises were made causing one party to act to their detriment

Even where the property is not co-owned, cohabitation rights include the ability to make a legal claim for beneficial ownership. If one party made promises or assurances which caused them to act to their financial or other detriment, they may have a strong basis for a legal claim.

5: Secured creditor of any beneficiary

A creditor may have secured a charge over the beneficial interest (economic benefit) of the property. Under TLATA a secured creditor of a beneficial interest should not be considered any more important than the other factors the Court must consider. However, the Courts may still grant the creditor an order for sale to allow them to recover the money owed to them despite the interests of any other co-owner or beneficiary.

Next Steps

If you want to apply to the Court for an order, you will need to provide evidence to support your application. This can include the following;

  • Current valuation of the Property;
  • Transfer Deed showing how the property was to be held when it was first purchased;
  • Any Trust Deeds showing how the beneficial interest is held;
  • Any notice of Severance;
  • Bank Statements showing regular contributions to the Mortgage Repayments (please note contributions to household bills would not be sufficient);
  • Evidence of assurances or promises made as regard ownership; or
  • Witness Statements to support your application. For example, why it should or should not be sold.

Please note this is not an exhaustive list, and is only an example of the evidence that may be required. The evidence needed to support your application depends on your own personal circumstances.

Contact the experts in cohabitation rights

Our Family Law Team at Astle Paterson have dealt with a number of cohabitation disputes. Call us now to instruct one of our experienced and specialist lawyers to represent you, advise, guide and support you as regards any such dispute.

We have been able to resolve such disputes by agreement, and also by successfully obtaining Orders from the Court in such cases. Call us now on 01283 531366 and book a fixed fee initial interview with one of the team.

Or enquire now using the form below:

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