Cohabitation / The Unmarried Family
When two people live together, there is no body of legislation in place to protect them as there is with married couples. The basic rule is that property can only be dealt with on the basis of pure property law principles. The parties will need to answer the question, “Who owns this?” rather than “To whom should this go?”
Where property is held in joint names, the law assumes that it is held equally, i.e., 50:50, unless there is evidence of an agreement either verbally or in writing that the shares are in some different proportion. When the position is set out in writing the position is normally clear cut. However, where there is no written agreement and where one of the parties claims a substantial and significant contribution to the purchase, upkeep or improvement of the property then the Court can make a determination that the shares are held other than equally. This very much depends on the strength and reliability of evidence.
Beneficial ownership – Establishing a Trust
If the property is held in one name, then there is an assumption that that party owns all of the beneficial interest in the property. In this situation, the other party will have to establish a claim in equity. There are various methods by which a party can establish a trust (and therefore proof of a share) in the beneficial ownership of a property. If the action is successful and a trust is established, then the non-legal owner will be entitled to a share in the property equal to his/her beneficial interest as determined by the Court in accordance with land law principles.
An express trust instrument or declaration of trust, will establish a clear beneficial interest in the property. The declaration of trust can be included in the purchase deed relating to the property but it is preferable if it is created as a separate trust deed.
A resulting trust in the property will be established if there is evidence of an agreement to share the property beneficially plus evidence that the non-owning party acted to their detriment in reliance on the agreement.
A constructive trust is established when no evidence of an agreement is present but a common intention to share the property beneficially is inferred by the conduct of the parties. An example of this would be where one party has made direct contributions towards the purchase price or the mortgage repayments.
If a party believes they have a beneficial interest in the property, they should register their interest either by means of a pending land action (in unregistered land) or a unilateral notice (in registered land).