Family

Cohabitation Breakdown

There are important differences between the financial division of assets and property following a marriage breakdown and the breakdown of a cohabitation relationship. 

Firstly, neither party has any right to claim maintenance from the other; however maintenance can nevertheless be claimed for children of the relationship. 

When looking at the division of property, the way the property is held is important. If property is held as joint tenants, the parties would be entitled to an equal division of the proceeds upon the sale of the home and either party can apply to the court for an order of sale. If the property was jointly purchased as tenants in common, only a declaration of trust will be decisive otherwise it will be assumed that the property is owned in equal shares.  

If the property is in the sole legal ownership of one party, the presumption is that the legal owner also owns the beneficial interest too, unless this can be rebutted by establishing a claim in equity, either by a resulting or constructive trust or proprietary estoppel. If the claim is successful and a trust is established, the non-legal owner will be entitled to a share in the property equal to his beneficial interest as determined by the court in accordance with land law principles.  

Resulting Trusts

This can be established by a direct contribution to the purchase price by the partner who is not the legal owner, unless given by way of gift or loan.  

Constructive Trusts

• There must be a common intention to share ownership and the non legal owner must have acted in reliance on this to their detriment;
• This common intention can be established through express agreement;
• The court will generally find a trust from discussions in the course of which the legal owner gives an excuse why legal ownership is not to be shared;
• If there is no evidence of an express agreement, a common intention to share the property can be inferred from the parties’ conduct, such as payment of mortgage instalments and financial contributions to improvements to the property can be used to infer the common intention to share the property;
• Contributions by labour may also count;
• Generally contributions to household expenses other than the mortgage are much less likely to establish a trust.