The myth of the common-law wife or husband
Society has changed dramatically in many ways, none more so than in respect of personal relationships. According to the office of National Statistics, cohabitees are the fastest growing family unit in the UK. About 80% of couples cohabit before marrying. There are twice as many people cohabiting now than in 1996 - and the number of people getting married each year has fallen from around 404,000 in the early 1970’s to around 260,00 in 2012. More than 50% of children are now born outside of marriage For many, living together is a lifestyle choice, for a variety of different reasons. The costs of a wedding may be off putting, or one person may be ‘once bitten twice shy’ because of an earlier failed marriage. But because more people are choosing to live together rather than marry, the way in which everything is sorted out on the breakdown of a relationship is coming under scrutiny. Neither the law nor public knowledge has kept pace with the social changes.
Nearly half of 18-34 year olds believe that cohabitees have the same rights as married couples on the breakdown of their relationship. This is wrong. More than half of the population is unaware that that the ‘common law’ wife or husband is a myth - one person does not acquire rights to a property just because they have lived there for six months, or two years as is commonly thought. It is clear from the statistics too that relationships where unmarried couples live together are also less stable than those where the couples say “I do”.
When a marriage breaks down the family court has very wide powers to ensure that there is a fair financial outcome. Married couples have four main claims that can be made against the other party in the event of a divorce, including a claim for maintenance (help with day to day living costs) and for a share of pensions. Neither of these options is available for couples that live together. This is bad news if the relationship is long. Often the mother will have sacrificed her career to care for the children, and will not be able to earn as well twenty years later when the children have flown the nest. The family court has to take into account a variety of factors when working out what is fair, and a judge has plenty of flexibility if asked to sort out the finances. Also, the court can take into account the contributions each has made to the marriage - and at the end of a long marriage the judge will treat the contribution, say, of a full time mother in the same way as the financial contributions of the breadwinner father.
The position for unmarried couples is completely different, and therefore is often quite unfair. What happens then if an unmarried couple split up? If the house is in the name of one person, can the other make a claim over it? The short answer is no. However, if the non-owner can show that there was an agreement that they should have a share and/or paid the mortgage, repairs or renovations it may be possible to claim a share. But it is only in limited cases that this can be done successfully. Also, if the house is owned jointly, normally the house will be split 50/50. This may be unfair if one of the owners has put more money into the house than the other.
There is some light at the end of the tunnel when an unmarried couple have children, as the children’s needs can be looked at when the relationship comes to an end. Sometimes this can mean that the house is transferred to the parent with care of the children while the children are under 18 years old, so that they have a secure roof over their heads whilst still at school. The best bet if an unmarried couple are buying a house together is to make sure that there is a clear statement, a 'Declaration of Trust', at the time the house is bought. This vital document will set out the shares that each has in the house. If the relationship comes to an end then it is very likely that the house proceeds will be split in the same way.
Although the law is very different for unmarried couples there doesn’t seem to be any great enthusiasm to change it. It is difficult to see how change could take place without undermining marriage - and that would be a political hot potato. So in the meantime it is important that unmarried couples that own a property understand what is likely to happen if their relationship goes wrong. Make sure you get detailed legal advice before exchanging contracts to buy a house together.
Jane Anderson can be contacted by email at email@example.com and by phone on 01603 724662.