Trust of Land Claims

Many people believe that unmarried couples who live together eventually gain rights similar to married couples. This “common law marriage” myth can lead to misunderstandings and difficulties if the relationship ends.

In reality, unmarried couples do not automatically possess the same legal protections as married couples. This is regardless of relationship length, cohabitation, property ownership, and whether they have children together.

The Courts have limited power to intervene in disputes between unmarried couples, and claims are largely limited to financial provision for children. The most effective way for unmarried couples to safeguard their interests is through a cohabitation agreement and/or a declaration of trust.

Without these agreements, issues can arise upon separation, especially regarding property ownership, occupation, and child arrangements.

It is important to understand the financial implications for unmarried couples regarding property and the remedies available under Trusts of Land and Appointment of Trustees Act 1996 (known as TOLATA).

When disputes arise over property ownership between separated cohabiting couples, the starting point is determining the legal ownership, usually found in documents registered at HM Land Registry or in a declaration of trust.

Two ways to legally own property

There are two ways in which a property can be legally owned:

• Jointly Owned
  As joint tenants, both parties own the property equally, and upon one partner’s death, their share automatically passes to the surviving owner.
  As tenants in common, each party owns a specific share, e.g. 80%/20% or 50%/50%, which can be passed on through a will or via intestacy rules upon death.
• Sole Ownership
  One party is the sole owner registered at HM Land Registry.

When cohabiting couples separate, problems can arise when, for example:

• One partner solely owns the property, but the other has lived there for years and contributed financially.
• Both parties have an interest, but one claims their legal interest does not reflect their greater contribution and seeks a larger share.

A cohabitee can establish a financial interest in a property they do not legally own by proving a “beneficial interest” under trust law.

Beneficial ownership usually mirrors legal ownership, unless proven otherwise. A declaration of trust (“express trust”) can be decisive in determining shares. If it states sole ownership, it is presumed the legal owner also has sole beneficial ownership and proving otherwise is difficult.

Seeking specialist family law advice is crucial, especially before moving in together or upon separation, to understand your rights and make informed decisions.

No, in the first instance, we encourage couples to explore alternative dispute resolution methods like mediation. Our specialist family law solicitors can also help you understand your options and assess the merits of any potential claim or defence.

If there is no express trust and you cannot reach an agreement, the only option is to apply to the court under TOLATA (Trust of Land and Appointment of Trustees Act 1996). To establish a beneficial interest in the property, you will need to prove one of the following:

• Resulting trust
  You contributed to the property’s purchase, and there was a clear understanding that you would have a financial interest proportional to your contribution. This is more common in investment properties.
• Constructive Trust
  There was a mutual agreement, at the time of purchase or later, that you had a beneficial interest, and you acted to your detriment based on that understanding. This is common when one partner owns the property but the other has contributed to it financially or through renovations.
• Proprietary Estoppel
  One partner relied on a promise made by the other and acted to their detriment, suffering a loss. The loss must be significant enough that it would be unjust for the court not to enforce the premise.

Without an express trust, strong evidence is needed to prove a beneficial interest. Each case will turn on its own individual facts, and it is vital that you get independent family law advice from a solicitor to better understand your position and for advice to be given before you proceed.

In a TOLATA claim, the court considers various factors to determine beneficial interests, including:

• Financial contributions such as direct payments towards the property’s purchase, mortgage, or improvements.
• Non-financial contributions include raising children, or contributing to the property’s upkeep.
• Intentions meaning the parties’ expressed or implied intentions regarding property ownership, based on discussions, agreements or conduct.
• The course of dealings, i.e. how the parties treated the property during the relationship, such as who paid bills, made repairs or acted as the primary decision-maker.
• Detrimental reliance, i.e. whether one party acted to their detriment based on the other’s promises or assurances regarding the property.