How is a jointly owned property spilt if a cohabiting couple separate?
A recent landmark case after a Supreme Court ruling now gives cohabitees more rights to negotiate their share of a jointly owned property if a relationship breaks down.
Previously when a cohabiting couple separate it has generally been assumed, in the absence of a deed of trust, that the courts, when deciding how the jointly owned property is to be split, will not take account of needs or financial commitments made by either party. This would generally result in a 50:50 spilt between the couple.
Don’t rely on a 50:50 split However, in this recent case, where no formal agreement concerning the share of the property had been made, the Supreme Court did in fact take into account the reality of who paid to purchase and maintain the property. This left one of the partners with only a 10% share of the proceeds when he was expecting at least 25%. As a result this change has given cohabitees more rights to negotiate their share of jointly-owned property should the relationship break down.
Whilst this is a welcome change in addressing the injustices inherent in the current law, it does so at the cost of certainty as there are no guarantees as to the final share either party will recieve. Therefore, it is likely to lead to more litigation as separating co-owners fight for a fair share of their property.
What can I do to protect my share? It is therefore vitally important that cohabiting couples take steps to protect themselves should a separation occur in the future. Going to Court to sort out claims on how a property is split between cohabiting couples is a very expensive, stressful and often drawn out affair. With legal fees often running into thousands there are no guarantees of fair treatment. A simpler, cheaper and generally fairer approach is to and setup a deed of trust detailing how the property will be split in the event of a possible, future break up. A proper declaration of trust drafted by a solicitor should cost no more than a few hundred pounds and will save thousands on court fees should a separation occur in the future.
At Newnham & Jordan Solcitors we are able to assist and advise you in this complex area of law and prepare a suitable & legally binding Decalaration of Trust for cohabiting couples. Call us now on 0845 680 7871
