The Government has now made it clear that they do not intend to pass any legislation in respect of the division of a house owned jointly between co-owners. Therefore co-owners still have to rely on a constructive trust.

If you are buying with either a partner or other third parties, how does this affect you? This article refers to the position between an unmarried couple, as this is the most common form of cohabitation.

Before buying a house

An unmarried couple should decide in advance how they are to own the property and set out these intentions in a written Declaration of Trust which your Solicitor can draw up at the same time as completing your purchase. The Declaration can set out how much you both contribute to the purchase and will pay towards mortgage and bills etc. It can also set out what will happen if you separate in terms of selling the house and what share of the proceeds you are entitled to. The Declaration of Trust will remain binding even if you separate or your circumstances change.

On Separation

If you own the property as joint tenants, the tenancy should be severed and you should obtain legal advice in this respect. If a Declaration of Trust was not entered in to at the time of the purchase and agreement between the parties can not be reached then the Courts will assume that you hold the property as joint tenants with equal shares unless evidence is produced which proves to the contrary. This can be an expensive and time consuming process. Even if one of you contributed more towards the purchase and the bills this will not be enough to prove that you did not intend to hold the property jointly in equal shares.

Your behaviour in respect of the property once you have separated will also affect a decision made by the court. Just because one person has stopped living at the property and is not paying towards the bills or mortgage does not necessarily mean that the Courts will decide that the property is not held jointly in equal shares. Likewise, if the parties make arrangements for the co-owner who has vacated the property to buy another property this could be sufficient to prove that the parties agree that they are not to hold the property jointly.

If you are considering purchasing a property with a partner or with friends or other family members, then you should seriously consider entering into a Declaration of Trust at the time the property is purchased as this will save you time and money in the long run. The Solicitor who is carrying out the conveyancing for you can draw this up.

If you have separated and need advice about the division of the property then you will need advice from a Family Solicitor. Talbot Walker LLP can provide both services for you.