Unmarried couples property division – the law
Each year we receive an increasing number of queries regarding property rights for unmarried couples. There are of course a number of laws dealing with division of property owned by a married couple but that falls under matrimonial law. Here we are looking at property rights for unmarried couples, including situations in which the property is only in one of the two people’s names and/or where there is dispute as to how much of a property each has rights to.
I do not deal here with how to protect your rights when buying as an unmarried couple as this is a property law matter whereas my practice is that of civil litigation. I would however strongly advise seeking advice on this particular issue from a property law solicitor at the time of purchase.
This article rather focusses upon what happens when a couple splits up, particularly, as is most often the case, where there is an argument that one contributed more than the other.
Firstly we will look at the law, then we will explore what needs to be done.
Whilst there is no codified legal system for dividing property owned by unmarried couples, the Supreme Court considered the position in detail in the case of Jones v Kernott in 2011.
The Supreme Court held:
Where a couple own a property equally legally for example being equal owners at Land Registry the starting point is that they own equal shares, but that starting point can be deviated from if the evidence shows the parties had a different intention, particularly in situations where parties did not share financial resources.
So most often the key question becomes: looking at the way the couple conducted their affairs whilst they lived together, what appears to have been their intention in terms of who owned how much of the property?
The Court also held that parties’ intentions could change over time: they could begin behaving in a manner consistent with wishing to own jointly (even if they made unequal purchase contributions) but could later be said to have changed their approach, for instance if one party left then purchased and focussed exclusively on another property of their own.
In situations where it is not possible to work out what the common intention was, the Court will decide upon each party’s entitlement based on what is fair “having regard to the whole course of dealing between them in relation to the property”.
In circumstances where the property was only one of the couple’s names the difference is that there is no starting point of presuming to have equal shares but, similar to the above, the Court will again look at whether the evidence shows a common intention to own equally and, again, if it cannot discern what that common intention was it will determine what is fair in all the circumstances.
Resolving the issue
Contrary to popular belief, dividing the equity in either a jointly owned home, or a property in just one of the couple’s names, does not have to become an acrimonious and expensive dispute. A responsible and experienced litigation solicitor will first seek to resolve amicably via say informal negotiation or perhaps a process known as “Alternative Dispute Resolution” or ADR. ADR takes many forms and is essentially a formal negotiation process conducted by an independent third party. In these types of cases the most useful form is often mediation. An independent mediator will meet with the parties and consider all of the evidence before recommending a fair division. Their decision is not binding but, practically, the parties following fair and independent recommendations could save each tens of thousands of pounds.
The Courts are keen to champion the use of ADR and there can be heavy costs penalties for parties who do not engage in it when invited by the other. Indeed I have seen a situation in which the a Judge reacted furiously to a party who ignored requests to engage in ADR and ordered them to pay substantial legal costs.
If informal negotiations and/or ADR fail (or are perhaps rejected by an unreasonable party) then court proceedings may be the only recourse. Aston Knight Solicitors take the view this is very much a last resort but, if needed, the purpose of the claim will be to ask the Court to determine the percentage division. There are of course a number of “tricks of the trade” in terms of litigation tactics which I do not expand upon here for obvious reasons.
A point I would emphasise however is that any and all correspondence including letters, text messages, emails, WhatsApp messages etc you may have sent to the other party or their solicitors can become crucial evidence in the case regarding the “common intention” and for this reason I would strongly advise instructing a solicitor as soon as possible who will ensure all correspondence to the other party is carefully drafted and does not “come back to bite” later on.
If you would like to know more then please feel free to contact us on 0800 999 6661 or firstname.lastname@example.org for an informal, free-of-charge, initial consultation.
By James Winterbottom, Solicitor