Where couples are in long term relationships where they are not married, if that relationship breaks down, the parties rights against each other are not covered by family law rules.
One of the main implications of this can relate to the property which the couple live in, but where that property is legally registered in only 1 of their names.
Under English property law, the legally registered owner at the Land Registry is not necessarily the sole owner or the only one who has beneficial entitlement to the property. The legal owner may be holding the beneficial entitlement on trust for him or herself or for others. The beneficial entitlement is the net equity (i.e. the net proceeds of sale) if the property were to be sold.
In the absence of a documented declaration of trust setting out beneficial entitlements, in a long term relationship where there is a property owned by only 1 of the couple, the other party faces a difficult task to prove, in any dispute, that he or she has a beneficial entitlement to part of the property.
There are 2 main ways of trying to establish a trust in these circumstances, which are :-
Resulting trust
A resulting trust may be found to exist by a court in any legal proceedings where the person claiming to have an interest in the property can show direct financial contributions made to the property.
Constructive trust
A constructive trust is the most difficult form of trust to be able to establish. In order to succeed, the person claiming to have an interest needs to show some form of contribution which, whilst not direct, amounts to a financial contribution. For example, there may be an argument that the party improved the property over the years.
Practical implications
If you are in a long term relationship and not married but live in a property with your partner, you are well advised to establish your interest in that property clearly. Ideally, you would want to be joint legal and beneficial owner.
If you don’t protect yourself and aren’t the legal owner, proving there is a resulting or constructive trust is risky and expensive. Before you are able to pursue such a claim, the legal owner could, theoretically seek to pull out the equity in the property by remortgaging for example and spend the money released. Consequently, you are much better advised to have things documented and protected legally.
We can help with advising you on the best way to fairly record interests and assets in a long term unmarried couple. If you already face a dispute where you have split up after a long term relationship, we can also advise you of your options and best tactics.
