Cohabitee rights

19th December 2023

Cohabiting Couples – Do they have rights to property on separation?

By Isla Boulongne, Director

19/12/2023
 
There are over two million more couples now who are cohabiting but not married than 25 years ago.
 
We regularly advise clients on the law covering couples who have cohabited but are separating, and it is often a surprise (and a shock!) to those clients to be told that don't have the rights that they believed that they did.
 
Commonly clients believe that they have the same rights in respect of property as those that are married. Sometimes clients may have been with one another for 25-30 years or more, but have never married or they are in a marriage that isn't recognised as a valid marriage in this country (i.e married islamically only), and this means that they are left with far less rights than those who have undergone a marriage ceremony on separation. It can be a devastating blow to many people who believed that they would share in assets in their partners name if they separated, but unfortunately the reality of the law is very different.
 
Where a property is not in joint names, under the current law, it is not possible to claim a share in an ex-cohabitee’s property because it is needed because they have children or otherwise or because that seems to be fair. The law is much more restrictive than that.    If one party does not own the property they live in but they have contributed financially to the purchase price or the improvements to the property, they may be able to establish a beneficial interest and may be able to obtain a declaration of their interest but it is by no means straightforward, especially if there is a dispute. There is also no guarantee of an equal split in these circumstances.
 
There may have to be an in depth investigation into their financial circumstances and what the parties intentions where when the property was purchased and there may also need to be an investigation into what they said to one another in the relationship about the property and what they allowed the other cohabitant to believe they would get out of it and how one party acted upon that belief.
 
If a non owning party can prove that they have a beneficial interest in a property through one of these methods, they may be able to get some money back. If they cannot, they will not and they may need to move out of their home and they could walk away with nothing from a relationship they might have heavily invested in both financially and emotionally. It can be that brutal.
 
Also, other assets of the relationship such as any savings and investments (unless they are in joint names) or indeed, pensions will not be able to be divided under the current law and this often leaves people who choose to cohabit in a very vulnerable position. You might have invested significantly in your partners business or shared a lump sum from an inheritance or paid of part of the mortgage but if these sums have not been expressly protected, you may not be able to get that money back when you separate.
 
Sometimes people do seek to protect their interest by way of entering into a trust deed, or declaration of trust when they purchase a property. However, many people forget to update it as they progress through their relationship and as they contribute more towards the property, improvements and such like. Again, this will also leave them in a very vulnerable position.
 
There is a proposed change in the law by way of the Cohabitation Rights Bill, 2023.  This proposed change in the law will allow couples with or without children who have lived together for two or more years to apply by right for a financial settlement. This financial settlement will be able to take the form of a cash lump sum, a transfer of property  or the ability to insist on the sale of the cohabitees property to receive a share of the proceeds. Many of these rights replicate the rights shared by marital couples. This type of bill has been presented to Parliament before and unfortunately has never progressed to a change in the law. It is not known if this bill will be successful and even if it does, it will take some time to progress through Parliament and be enacted.
 
The organisation ‘Resolution’ have recently campaigned for awareness of this issue and have urged the Government to recognise the changing face of families by introducing a legal framework of rights and responsibilities for cohabiting couples. They recognise that couples who live together have very little legal protection when they separate, and this can lead people to become very vulnerable. According to research undertaken by the family law group ‘Resolution’, 35% of cohabitees said they would be left homeless and one and three feared significant financial hardship in the event of a break up.
 
Proper advice needs to be obtained at the outset when a property is being purchased as a cohabiting couple from the conveyancing solicitors. It is often necessary for them to receive independent legal advice to ensure that both their rights are being protected. A cohabitation agreement can help to cement your rights provided both parties get independent legal advice but often clients will come to see us when the relationship has already broken down and by then there is often a lengthy, time consuming and stressful experience ahead of them in attempting to negotiate or even litigate the issues if these cannot be agreed.
 
The best way to protect yourself as a cohabitee is to get legal advice from the outset when purchasing a property or as soon as possible thereafter. To ensure you are or you become a legal owner of the property at the earliest opportunity. Finally, to try and cement your understanding of how the assets will be divided in the event of a separation into a legal document and to prepare a will and update both documents regularly.