If you are not married and you are separating from your partner, you need to know your legal position. Splitting equity after separation is not automatic. Cohabitees have far fewer rights than married couples, but you may still have a claim over a shared property, even if your name is not on the title deeds.
This page looks at the rights of unmarried couples on separation as well as how the courts deal with splitting assets during divorce.
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Living together – your rights as a cohabitee
The idea of a ‘common law marriage’ is a myth. After splitting up, couples who have lived together have no automatic right to claim financial support from each other on separation (although not being married does not affect the obligation to maintain your children).
If, as a couple, you share ownership of a property, then how you own it is important. In short, if you have been living together, there are 3 different ways in which you may have owned your property:
· Joint ownership as joint tenants;
· Joint ownership as tenants in common; or
· Sole ownership
Joint ownership as joint tenants
If you and your partner own a property together as joint tenants, and after separation you will be entitled to split the equity and receive half of the net proceeds of sale.
Ownership as joint tenants means that you both hold the whole property together. Neither of you owns a specified share of the property. If one of you were to die, the other would automatically own the property. It would not pass under the terms of a Will.
Joint ownership as tenants in common
If you own a property as tenants in common, you own a specified share. This could be equal 50% shares, but if you and your partner put in different sums to buy the property, you may own unequal shares, for example, 25%:75%. If you sell the property, this is how the proceeds are shared.
Click here to read more about the pros and cons of joint tenancy vs tenants in common
If your ex owns the property in their sole name, then it may be harder for you to get your share of any equity in the property if you split up. However, if you contributed towards the original purchase price or you paid other money towards the property, you may be able to make a successful claim for a share in the equity of your home. This can be the case, even if your name is not be on the title deeds.
The Trusts of Land and Appointment of Trustees Act 1996, known as TOLATA, protects those with a with what is known as a “beneficial interest” in property. Having a beneficial interest in property means that you might own a financial share or have the right to live in that property, even if you’re not a technical owner and registered as the property owner. A beneficial interest means you are entitled to a financial share of the property or a percentage of the sale proceeds.
So, after separation, you could be entitled to a beneficial interest in the property, even if there’s nothing in writing to say so.
You may have a valid claim for a share of the proceeds for example if you have paid money for the deposit, helped to pay the mortgage or paid for substantial work or alterations the property, such as an extension. If you did not intend this money to be a gift, then depending on the particular circumstances, we may be able to prove that as a result you have a beneficial interest in the property.
What does equity mean?
In short, it’s the amount of money you would receive after selling your property (or any other asset) and any associated debts (such as your mortgage) are paid off.
Property rights of married couples
The situation for married couples is very different. If you are married, your spouse cannot force you to leave your shared home without a court order, even if your name is not on the title deeds.
Marriage is considered to be a financial commitment for life, and on divorce, assets are available to be shared between the couple.
But that doesn’t automatically mean that everything you own is simply split 50-50 when you get divorced. Every case is different.
The courts will look at a range of issues, including the needs of both parties the length of the marriage and decide how to split everything. This includes property, savings, investments, pensions, valuable possessions and debts. Even if one of you owned a property before your marriage, the court will normally include this when dividing your family assets.
The starting point for the court is to share the assets equally between you, but the court will adjust the shares if one party is in a weaker financial position, for example, if they have given up work to raise a family. And, for example, with very short marriages, courts often lean more towards putting both parties back in the situation they were in before the marriage rather than looking at a simple 50-50 split.
When splitting assets, if one party wants to keep the shared home, for example, the other party could receive more of the other assets, such as pension provision or shares, by way of compensation.
It is crucial to put a financial consent order in place if you divorce. This will deal with the division of all of your assets. Without this, there is a risk that your former spouse could make a successful financial claim against you many years into the future.
Click here to find out in more detail about the financial aspects of divorce
Property rights when an unmarried couple have children
The situation may be different for unmarried couples if they have children. As mentioned earlier, even after separation, both parents remain financially liable for their children, and the courts will prioritise the needs of children in any decision they make.
If you separate, you will need to make arrangements for your children, including deciding where they will live.
If your children will be living with you and you will have their day-to-day care, the courts may rule that your former partner must provide a home for them. This can be the case even if the property is in your ex’s sole name.
The court can require that you and your children be allowed to live in the property until your children are grown up. Once your children reach the age specified by the court, for example, 18, then the property could be sold by your ex. Unless you make a TOLATA claim, they will keep the equity – the sale proceeds.
Splitting Equity After Separation – Making a TOLATA claim
If you have contributed towards a shared property, but your name is not on the title deeds, we recommend you take early legal advice from an experienced solicitor who regularly deals with these kind of property cases. Give us a call – we are happy to give you some free initial phone advice about your particular position, with no strings attached. And if it looks like you’re able to make a claim, we can work with you to secure that share of the equity you are entitled to.
After separation, it’s a good idea to find out where you stand as soon as possible. And if necessary, our team can take steps to protect you and ensure that your ex cannot sell the property and hide the sale proceeds beyond reach.
Wherever possible, we try to resolve cases that the need for a court application. This is a faster and more cost-effective solution. Negotiation and mediation are usually the 1st approaches we use. Mediation often works particularly in this kind of case – where a trained mediator would work with you both to try and find an outcome that is acceptable to you both.
Where necessary, we will put together a robust court case on your behalf. This may encourage your ex to settle the case. If it does not, we will ensure you have the preparation and support you need for the hearing.
What happens if my partner owned our home in their sole name but has now died?
Depending on your particular circumstances, you may be able to make an inheritance claim for financial support or for the property itself if it is been your home. Our dispute resolution team regular handle inheritance claims for clients nationwide.
Click here to read more about making a UK Inheritance Claim