Fiona Wilson and Charlotte Coyle review the current law relating to cohabitants and recent proposed reforms to protect the rights of cohabiting partners.
Cohabiting couples are the fastest growing household structure in the UK and yet they are one of least legally protected. Data published by the Office of National Statistics showed that in 2021 there were 19.3 million families in this category in the UK, which represents a 6.5% increase over the last decade.
The number of families that include a couple in a legally registered partnership has increased by 3.7% in the past decade to 12.7 million. However, while those in a legally registered partnership remain the most common household structure in the UK, cohabiting couples are the fastest growing with an increase of 22.9% over the same period to 3.6 million, meaning that one in five of us are in a cohabiting couple.
Over the past decade, the number of families and households in the UK has continued to rise in line with population growth, however the way people are living is changing, with more and more people choosing to live together either before or without getting married.
This rise in household and familial structures is most likely due to the change in societal perceptions and the financial advantages of couples pooling resources and purchasing property together and we are likely to see a further increase in these cohabiting structures once the statistics are released later this year.
Current legal position
Unfortunately, despite the steady rise in cohabiting couples, the law does not currently acknowledge the rights of a cohabiting couple and unlike in other EU countries, there is no such a thing as a ‘common law marriage’ in England and Wales.
Married couples who separate seek to settle their finances and deal with the treatment of the family home by reference to the factors set out in section 25 of the Matrimonial Causes Act 1973. While there is no standard formula for calculating appropriate financial provision on divorce, the court has a duty to consider all the circumstances of the case and then calculate and distribute the parties' available resources in order to achieve a fair outcome.
For unmarried couples the law is less objective and discretionary and more subjective and declaratory. If a settlement cannot be reached between the cohabiting couple, either through negotiation or alternative dispute resolution, the route to any resolution will likely be an acrimonious and costly one via the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996).
Under TOLATA 1996, the court’s powers are generally quite narrow and it can only make an order for a sale of a property and to declare the parties beneficial shares in the property, looking back at what has been said and done by a couple during their relationship and cohabitation together rather than what is fair at the time of separation.
As the law currently stands, a cohabiting couple who have decided to separate will not only have to deal with the emotional fall-out from the failed relationship but also the financial one should they wish to assert their claim or beneficial interest in the property they were living in together during cohabitation.
Steps on separation
If an unmarried and cohabiting couple separate, neither of them will automatically acquire a legal interest in assets, including property, held by the other regardless of how long they have lived together.
Every cohabiting couple’s living situation is different and therefore the starting position would be to look at who legally owns the property and how outgoings such as the mortgage and bills were paid. If for example, one partner owns the property and the couple separate, the starting position would be that the partner who owned the property would keep it and the other would not be entitled to anything from the property.
The decision in Stack v Dowden [2007] 2 All ER 929, [2007] 1 FLR 1858 showed that where there is no express declaration of trust, beneficial interests can be created by way of a constructive or resulting trust.
Paying rent or helping towards utility bills is unlikely to be enough to affect the position, but if for example a cohabitant paid off part of the capital debt of the mortgage or paid for the property to be refurbished thereby increasing its value, a direct financial contribution to the property could give rise to a resulting trust.
Where promises were made as to an entitlement to a share of the property, and a cohabitant relied on the promise to their financial detriment, an express constructive trust may arise. Per Lloyds Bank v Rosset [1990] 1 All ER 1111, there must be evidence of express discussions, however imperfectly remembered or how imprecise their terms may have been, to the effect that the claimant was to have a beneficial interest. The court will usually give effect to what has been expressly agreed.
Proposed reforms
Currently the law does not properly reflect the society in which we live, nor does it provide adequate protection for those who separate from a partner to whom they are not married. This situation is far from uncommon especially given the rise in the number of cohabiting couples in the UK and the anticipated rise in the future.
In July 2007, the Law Commission published which considered the financial consequences of ending cohabiting relationships. The Commission recommended that a new statutory scheme of ‘financial relief on separation’ should be introduced. This would be based on the ‘qualifying contributions’ each partner made to the relationship, giving rise to certain enduring consequences at the point of separation. To be eligible, cohabitating couples would need to have had a child together or to have lived together for a minimum period and couples would be able to opt out of the scheme through a written agreement. However, in March 2008, the Labour Government announced it would be taking no action to implement the Law Commission’s recommendations until research on the cost and effectiveness of a similar scheme in Scotland could be studied.
Just over a decade later in April 2018, the government said it would be considering how to proceed in relation to the proposals ’in the context of any further reforms to the family justice system’.
Resolution has also been campaigning for reform of the law relating to cohabitation for many years.
More recently, on 4 August 2022, the Women and Equalities Committee published its report on , which called for reforms to the current law that leave cohabitants without proper protection, but the recommendations have now been rejected by the government in its .
Reforming the law for couples who live together is long overdue and the urgency of change cannot be underestimated.
Fiona Wilson is a partner and Charlotte Coyle is a director at .
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