When is a Village Green not a Village Green? In this blog post, Ian Riley, Director at Fishers Solicitors and Head of the Commercial Property Department discusses a recent case that tested new legislation concerning the registration of land as a Village...
Living in Sin - A cautionary tale
- AuthorAndrew Robinson
You meet a new girlfriend (or boyfriend), you fall in love and so you move in together, right? After all, it’s the 21st Century and it’s the obvious thing to do.
However, it’s early days, you’ve got your own pad already, or the funds to buy one, and it’s only fair that you keep what’s already yours. So what do you do?
For most people, the answer is simple, they either continue owning their home in their sole name or they buy the new property in their sole name. They are then totally protected right? Wrong.
The recent case of Southwell –v- Blackburn has emphasised again the dangers in making the assumption that if you are the sole legal owner, you are solely entitled to the value in the property. In fact, the answer to the question of who is entitled to a share in the property may be very different to who is named “on the deeds”.
There are a number of ways in which a person can try and establish an interest in property and such ways do not have to rely on evidence of an agreement in writing. Often, a person who has been occupying the property will assert that there was a verbal agreement that they should have an interest and that they have then relied upon that. Sometimes, the assertion will simply be that the court should decide that there was such an agreement because of the way that the couple behaved towards one another.
Financial compensation even if no agreement to share
However, the Southwell case is a reminder that the court doesn’t even need to find that there was an agreement that ownership of the property be shared in order to provide financial compensation to the non-owner. That was a case concerning a couple who lived together for a number of years before separating. Mr Southwell purchased their home using significant equity from a sale of his previous property and funding the balance by way of mortgage. He was the sole legal owner. It was relatively common ground that Ms Blackburn had made very little financial contribution to the purchase price and ongoing costs of the home and the judge rejected her claim that there was any agreement that she have an interest in the property. Nevertheless, the judge ordered Mr Southwell to pay Ms Blackburn a significant sum of money which effectively represented a slice of the equity. In summary, he did so because:-
a) Mr Southwell had given Ms Blackburn verbal assurances that he would provide her with a home; and
b) Ms Blackburn had uprooted herself and her children from secure rental accommodation (in a property that she had spent a lot of money on) based on that assurance.
It is worth noting that the judge made these findings notwithstanding the fact that the couple’s cohabitation meant that Ms Blackburn was provided with rent free accommodation for a period of years and that Mr Southwell’s financial assistance allowed her to complete a degree course during their relationship.
So what conclusions can we draw from this?
It is absolutely clear that if a person lives with a partner for any length of time, they are vulnerable to claims being made in respect of their shared property in the event of separation. This is the case regardless of whose name is on the deeds. Equally, it is clear that in the event of such claims, the court will engage in a difficult exercise of trying to ascertain what discussions have taken place between the parties (often years earlier) and what their intentions were.
The best way of insulating oneself against such claims is to have a written document setting out exactly what a couple’s intentions are as to ownership of the property. In short, in all cases where it is intended that a couple live together in a property owned by one of them they should be entering into a Cohabitation Agreement (or Living Together Agreement).