That old chestnut, the common-law wife, what does it mean? Nothing unfortunately. There is a widespread misconception that if you live together for a long period of time then you acquire the same rights that married couples have when it comes to the division of property upon separation. It comes as a shock to many “common-law wives” (or common law husbands for that matter) that they have no automatic rights to a share in the family home.

An example of such case might be as follows:

Janet has lived with the father of her children John for 25 years. The children have grown up and left the family home.  The family home is a property in John’s sole name. Janet took on all the caring and home making responsibilities.  She had a part time job and her earnings from that job she spent on the children. John was the breadwinner and for the 25 years of their relationship he paid for the mortgage and other outgoings. Despite repeated requests over the years John refused to transfer the family home into joint names asserting always that the property was his as he had always paid for it. The relationship breaks down.  Janet has no automatic entitlement to a share in a family home and no entitlement to maintenance.

Compare and contrast the above scenario with a married couple in the same circumstances. In the case of a married couple the wife would be entitled to at least half of the equity in the family home even if she made no financial contributions to it and depending on her earnings, she might also be able to claim on- going maintenance for a period either until her retirement or until she was able to get back on to her financial feet.

In the above example of the cohabiting couple would it have made any difference if Janet was also working full time and contributing to the family finances but rather than paying the mortgage, she was paying the bills and the children’s expenses? Not necessarily. This is because the criteria for qualifying for a share in a property that is not in your name is very specific. The bar is set high.  Janet would have to show firstly that there was a joint intention to share the family home. She might fall at this first hurdle. In the example I have used above John made it clear that he had no intention to share the property.

Even if Janet was able to show that they both intended to share the property, she would then have to show that she suffered a loss because of the promises made to her John to share the property with her.  She would have to show she “acted to her detriment” by making contributions to the deposit on the property, mortgage contributions or paying for refurbishments to the property.  If she knocked down walls, installed kitchens or bathrooms that would also count.  However just paying the bills would not be enough.  Buying furniture and furnishings would also not be enough.

Another example of how the law on cohabitation (i.e., unmarried couples living together) can apply unexpectedly is a common scenario where a couple move into a home owned by only one of them.  Say Janet moves in with John. Janet has her own property that she decides to rent out.  The rental income pays her mortgage.  Janet and John intend to start a family and share John’s home.  They have discussions about the ownership of their home and John informs Janet that he will transfer his property into joint names.  He tells her he will get round to this and that Janet should not worry because “the house is ours.”

When Janet moves in with John, they both set up a joint account and pay the mortgage together from that joint account. Janet also pays for the new kitchen in the belief that she will have a share in John’s home.  Their relationship subsequently breaks down.  Janet would have a claim on John’s property because she made contributions to the mortgage and refurbishments on the back of John’s promise to share the property with her.  However, John would not have a claim on Janet’s property because he never made any financial contributions to it and there were no discussions between them that he should have a share in Janet’s property.

The law relating to cohabiting couples is a minefield.  What couples say and do and how they organise their finances becomes crucial if such relationship breaks down.  It is so important therefore that when couples move in together, they put an agreement in place that clearly sets out who owns what and how future assets will be shared.  These agreements are called Living Together agreements or Cohabitation agreements.  Sometimes unmarried couples opt for Trust Deeds if they just want to protect their shares in one specific property. These agreements might not sound particularly romantic, but they can save a lot of heartache and expense in the event of a relationship breakdown.

Court applications for property disputes are complex and protracted and the outcomes of such applications are often uncertain.  The best time for couples to be fair minded to each other are when their relationships are good. It goes without saying that all couples looking to live together should give careful thought to their financial arrangements and seek legal advice.


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