Unmarried couples and protection of your clients’ property interests

In a recent case in the High Court the judge was at pains to emphasise the different law that applies when considering property dispute cases arising on the breakdown of a relationship, dependent on whether the couple in dispute were married or unmarried.

The case in question concerned the purchase of a Devon farmhouse in 2007. The farmhouse was occupied by an unmarried couple, Jacqueline Dobson and Matthew Griffey, although purchased with the aid of a mortgage in the sole name of Mr Griffey. Following renovation and improvements to the farmhouse, the relationship broke down in 2011 and the farm was subsequently sold in 2017. Ms Dobson then alleged that, although the property was in her former partner’s sole name this was for mortgage purposes only and that at the time of its purchase the couple had agreed to split any profits on sale equally.

The court’s decision

Matthews J pointed out in his judgment that in the case of an unmarried couple the court’s function in such disputes is limited. It has no power to reallocate assets between the couple to, for example, meet financial need. Property law alone, which does not include any element of judicial discretion, would determine the outcome.

As the property in question was in the sole name of Mr Griffey, Ms Dobson (as the non-owner who was claiming an interest in the land), must show evidence of a trust imposed by law which would mean that Mr Griffey would then have held the property as legal owner upon trust for the two of them.

The court concluded that there was no evidence of any agreement as to the property’s ownership, or an agreement that the sale proceeds should be divided between the couple, and thus Ms Dobson’s claim for a share of the sale proceeds failed.

Protecting your client’s property interests

These types of cases are relatively common. As the judge pointed out, if the couple were married it would not matter who had legal ownership of the matrimonial home, its ownership could be split between the couple as the court in its discretion decided, taking into account all relevant factors including their relative needs. No such system of financial adjustment applies in the case of unmarried couples.

If your unmarried client is intending to purchase a property with their partner it is essential that any agreement as to beneficial ownership of a property is documented by way of a written declaration of trust. This should be explicit about all aspects of the property ownership including what happens if one of the couple wishes to sell, and how capital and income property outgoings are to be split.

One of the arguments advanced by Ms Dobson was that Mr Griffey had said he would leave the property to her on his death. Given that unmarried partners have no automatic right at present to benefit from their partner’s estate, it is also essential that thought is given to each partner making a Will so the position is protected should one of them die. Ultimately, drawing up the requisite legal documents is a much less stressful and expensive route for your clients than a High Court dispute over ownership.