Cohabitant Entitled to 25 per cent Share

Yet another case has come to court which illustrates the wisdom of cohabiting couples making a ‘living together agreement’ or formalising their respective rights over the property in which they live.

It involved a couple who formed their relationship in 1975 and started living together in a property bought by the male partner in 1982. When he died in 2009, the mortgage was not yet paid off and the mortgage company sought possession of the property.

Although she had made no substantial financial contribution, his partner claimed she had a 50 per cent beneficial interest in the property. The court concluded that this was excessive. There is no presumption in law in such circumstances that the beneficial ownership of the property will be in equal shares. The court concluded that her interest was 25 per cent.

The mortgage company appealed the decision, but the original judgment was confirmed by the Court of Appeal.

It is not widely enough appreciated that there is no automatic right to a share in the ownership of a property simply by virtue of living in it for an extended period with the legal owner, even if household bills or mortgage payments are shared.

The court is not the best place to resolve such issues. If you are considering living with someone else in a property of which they are the legal owner, we can advise you how to protect your position should the relationship end for whatever reason.