Wentworth Cecil Gurney,
If cohabitants have validly declared their respective interests in the property, then that will determine what interest each cohabitant has. However, if they have not validly declared their respective interests, then a dispute can arise regarding what interest each cohabitant has.
English law recognises that a cohabitant can have an interest in property if there was a shared intention (whether express or inferred from the circumstances and whether formed before or after the purchase) that they were to own a share in the property (or even the whole property) and the cohabitant reasonably relied on that shared intention to their detriment.
If the property is held in the name of only one cohabitant, the court will start with the presumption that the other cohabitant did not own any interest. However, this presumption can be overcome by evidence that there was a shared intention that that cohabitant would own an interest and that intention was reasonably relied on to that cohabitant’s detriment.
The reverse presumption applies if the property was held in the name of both cohabitants: the court will presume that each party owned an equal interest. However, this presumption can also be overcome by evidence demonstrating that the shared intention was something other than a 50/50 split and that that intention was reasonably relied on to the cohabitant’s detriment.
If a party can establish that there was an express or inferred shared intention that they were to have an interest in the property but cannot establish a shared intention regarding the extent of the interest they were supposed to own, then the court will look at all of the circumstances to determine what a fair share would be taking into account the parties’ course of dealing in respect of the property.
The same principles discussed here can apply to assets purchased other than by cohabiting couples and to assets other than property. However, in a purely commercial context, a different set of principles usually apply. Which principles will apply will depend on the parties’ shared intention. The principle of proprietary estoppel can also assist cohabitants who wish to establish an interest in their home or former home. Likewise, if the cohabitants were engaged and they have terminated that engagement, they may be able to rely on the Law Reform (Miscellaneous Provisions) Act 1970. The principles discussed here are not usually relevant in the case of former spouses as the court has wide powers to make financial orders in that situation.
Shortlands Law Firm offer expert advice and assistance to cohabitants who wish to establish an interest in their home or former home or who have to defend such a claim. Please contact us on +44 (0)207 629 9905 or email email@example.com if you would like more advice about this complex area of law.
The contents of the above article is a broad overview, and should not be relied upon without obtaining specialist advice that is specific to your circumstances. Shortlands Law Firm accept no liability resulting from your reliance on this article.