- Solicitors For Business
- Solicitors For You
- About Us
- News & Events
Unmarried property disputes – don’t be surprised16th December 2019 Family Law
There has been considerable press interest in the result of a dispute between Kim Springall and Gary Paice, an ordinary couple living in the Croydon area. The pair spent 32 years together and had three children and were unable to agree on what to do with the family home when they separated in 2016.
What we know
A transcript of the court’s judgment has not been published so we are only able to piece together what has happened from media reports. The parties lived in a house, worth a reported £1.5m, that had been purchased in Ms Springall’s name with the aid of a mortgage. It is understood that they had previously invested in property development projects together. Ms Springall and Mr Paice differed on the reasons why the property had been bought this way. On the available evidence, the judge preferred Mr Paice’s account and awarded him a 50% share of the property and ordered Ms Springall to make a substantial contribution towards his costs.
Why might this have happened?
The judge will have taken an overview of all the parties’ behaviour in relation to the house, and – potentially – their wider financial circumstances, to arrive at a view as to their intentions. Even though the house and mortgage were in Ms Springall’s sole name, Mr Paice made a very large contribution to the purchase price. Taken together with details of their financial behaviour generally, the judge clearly decided that the paperwork did not reflect the reality. Rather than the house belonging to Ms Springall 100%, he found that the equity should be divided 50/50.
Does this set some kind of precedent for other cases where a property is in the sole name of one member of a cohabiting couple?
In a word, no. Mr Paice was awarded 50%, not because the judge felt that it was the “right” or “fair” thing to do. The 50% award comes from an analysis of how the parties’ intentions can be ascertained by looking at the available objective evidence (e.g. bank statements or emails/texts discussing the matter) and listening to them each give oral evidence about what they thought they were doing during the period of ownership.
When a married couple gets divorced, sharing the capital assets 50/50 is a relatively common outcome though there are many reasons why this may not be appropriate in any given case. However, if a couple are not married, cannot agree how to divide their family home and if there is no paperwork specifying how it should be split, the judge is left with the unenviable task of piecing together their respective intentions to reach the correct answer.
What guidance is there on unmarried property disputes?
There is a huge body of previous decisions to guide the courts. Here are some of the key points:
- If the parties have stated in writing how they wish to share the equity, this will almost always win the day. This “express declaration of trust” could be via a cohabitation agreement or deed of trust. However, it could be as simple as the parties signing up to own a house jointly without stating percentage shares. In that case, the equity will virtually always be divided 50/50, regardless of who paid what
- If a house is owned in joint names and there is no declaration in writing, either because the house was purchased using an older-style transfer form or because only the seller signed it, the parties may be able to argue for something different to 50/50, depending on all the circumstances and the evidence available
- If a house is legally owned in one party’s sole name – like the Springall and Paice case – one of the parties may be able to convince a court that it is not right for the legal owner to walk away with 100% of the equity. To do this requires strong evidence that the parties intended something other than what the “deeds” say
Many cohabitation disputes are open and shut. If you have bought a house jointly and ticked the necessary boxes on the standard form transfer, you will be treated as owning the house 50/50 unless the transfer or a subsequent declaration of trust says otherwise. If a house is owned in one party’s sole name, there will need to be very strong evidence to undermine their claim to 100% of the equity, such as a contribution towards the purchase price or mortgage repayments.
However, if there is an opportunity for argument, the process of assembling the relevant evidence, often going back many years, is time consuming and expensive. Cohabitation cases will turn on a strict application of property law, rather than concepts of needs and sharing which are so crucial in the divorce context. The results can be harsh and, for some, unexpected.
If you are buying a property with another person or you are planning to share a home owned legally by only one of you, it is time for some clear thinking. What do you want to happen when and if the property is sold or you separate? Take legal advice on whether the documentation reflects this intention. It could save huge amounts of cost and uncertainty later.
Don’t assume that if you put unequal amounts into a purchase this will be reflected on sale. The only route to certainty is by entering into a cohabitation agreement and/or declaration of trust, depending on the circumstances. Anecdotally, take up of cohabitation agreements is low. People are perhaps afraid of addressing square on the prospect of separation for fear of tempting fate. Cost is also a factor.
No one can ever truly know what’s inside someone else’s head. This is what makes property disputes between unmarried couples so difficult; in the absence of documentation, such disputes often hinge upon what each party was thinking at key moments. Piecing together the evidence to make a decision about that can be a long and painful process.
Make an appointment at one of our offices
1 Byrom St,
Tel: 0345 872 6666
36- 37 King Street,
Tel: 0203 675 7600
100 Old Hall St,
Tel:0345 872 6666