Financial Claims Between Unmarried Couples

The courts have wide powers to intervene in the finances of married couples or civil partners, but for unmarried couples they have fewer powers.  This can lead to perceived unfairness.

The number of cohabiting families is increasing sharply (to 2.3 million in 2007 according to the  Office of National Statistics), whilst the number of married couples is falling.  We at bbl family law are seeing an increasing number of clients who are not married or civil partners, and creativity is  required to find the right solution.

We set out below some of the legal options for  couples who do not marry.

Cohabitation agreements

At the start of a relationship (or even during the course of a relationship) we at bbl family law  advise clients to sign a cohabitation agreement.  This governs who owns what and can save a huge amount of heartache, stress and expense in the event the relationship ends.  It is important that if a couple buy a house together, the transfer document should spell out the share of the house owned by each person.

Ownership of Property

Even if a house is in one person’s name, the other partner may have an interest (and be entitled to a share of the value of the property) – this is known as a “beneficial interest.”  For example, if the non-owner paid for an extension to be built (and they both agreed he or she should acquire an share) then he or she has a beneficial interest.  This interest can be defined or dealt with by the court, if necessary.

Similar issues may arise if the property is held in joint names – this doesn’t automatically mean they are each entitled to 50%.  The House of Lords have ruled the courts should look beyond financial contributions, including factors such as how the parties conducted their finances, and the purpose the property was acquired for.

Ownership of other assets

The above principles can be applied to other properties, as well as the family home, and even other types of asset such as possessions, cars, or a business.

Claims by parents on behalf of their children

In general, a parent whose child or children does not live with them is potentially liable to pay child maintenance.  In addition, parents (whether married or not) can make wider financial claims on behalf of the child.  The claims are made pursuant to schedule 1 of the Children Act 1989 and are often known as “schedule 1” claims.  This can be a good way of achieving some financial security.

The court’s powers include ordering one parent to pay the other a lump sum of cash, transferring ownership of a property and payment of “top up” maintenance.  There are restrictions on the courts powers – for example, the transfer of a property is for use as a child’s home, so the property reverts to the transferor when the child reaches adulthood.  However, recently the courts have shown willingness to be generous when assessing the value of these claims, particularly by referring to the standard of living enjoyed during their relationship.
Broken engagements

If you were engaged but never married, the court may have the power to declare who owns what assets.  These powers are fairly limited but at bbl family law we recognise the importance of exploring all your options, to give you the best possible outcome.

Occupation of the home

Even if you do not own the home you share with your partner, you may have a right to remain living there.

These rights are limited and a good knowledge of the law is essential to ensure you are protected.  The rights include a “contractual licence” or your partner my be “estopped” from asking you to leave, or the court could make an “occupation order”.  Alternatively if your interest arises under a trust, it could be an implied term of the trust that you have the right to occupy the house.