Buying a home with your partner can be the first step to a blissful life of love and harmony. It can also be the cause of trouble and strife – and not the marital kind. If you co-habit with someone who is not your spouse, what happens to the property if you separate?
The Trustees of Land and Appointment of Trustees Act 1996 tells us how the Court will deal with this scenario.
You will need to consider how the property is owned. Are you joint tenants (you both co-own the whole of the property and if one of you dies, the property automatically passes to the other joint owner. This is common for married couples) or are you tenants in common (where each of you owns a defined share of the property, and each of you can leave your share under a will to someone other than the other co-owner).
The most common solution to this scenario is for one owner to “buy out” the other owners share. If neither party is in a position to do this, the property may need to be sold, either by the consent of both parties or be forced by an order of the court. If an owning party is excluded from the property, they may be entitled to claim occupational rent, i.e. a rental amount from the party in occupation of the property to compensate for the fact that they are not living there.
What if one party is not an owner but was promised a share in the property? This could be a constructive trust, and the court may find that there is a trust in favour of the non-owning party and they therefore have a share.
What if one party does not own the property, but they contributed financially to the purchase price for example? The court may find that there is a resulting trust, giving the non-owning party a share.
A Solicitor can help you navigate the complexities of separating property interests. Call our property dispute experts if you need support.