Matthew Brett talks about the Division of Property After Cohabitation in his most recent article
19th Jun 2025 | News
Division of Property After Cohabitation: A Brief Overview
It is often not appreciated how little discretion is available to the courts when cohabiting parties who have not been married are unable to agree how to unravel their finances following separation. In the absence of any children of the relationship the Family Court has no role at all in such disputes, and the parties’ only recourse is to the general laws of property which are litigated in the County Court or High Court. There is, of course, no jurisdiction to make periodical payments orders or pension sharing orders. So, what remedies are available, and how does such a claim proceed? What follows is a brief summary of the position for those unfamiliar with cohabitation cases and is not intended to cover every aspect of what is a complex and difficult landscape.
Chattels
In relation to chattels there is no power to transfer ownership from one party to another and there is no concept of jointly owned chattels. Funds in a joint bank account are held in equal shares. There is therefore little scope for litigation as to the chattels, save for disputes as to ownership and claims of monies owed under loan agreements. In a relationship of cohabitation the court will readily infer that chattels purchased by one party for the use of the other party were gifts. Otherwise, the chattels are likely to belong to the person who purchased them. A typical example might be an art collection; this will belong to the person who bought or inherited the pictures, save where there is evidence of gift (perhaps a birthday present). Another example might be jewellery; necklaces and earrings bought by one party to be worn by the other is almost certainly going to be regarded as a gift. One area of difficulty is ownership of vehicles which are often purchased with joint funds and used by both parties, but registered in the name of one of the parties. In such cases, the practical solution might be to regard the vehicle as the property of the party in whose name it is registered, but to characterise the other party’s contribution towards the purchase price as a loan. Claims in relation to chattels will almost always be relatively trivial and do not lend themselves to formal litigation in the County Court. It is not possible to tack on a chattels claim to a dispute about real property as one might in the Family Court, so the reality is that most such claims should be negotiated separately or as part of an overall mediation.
Real Property
Division of real property is another matter altogether. Cases fall into one of two main categories: sole name cases and joint name cases. In a sole name case the property is held in the name of one of the parties and the other party seeks an interest in the notional proceeds of sale of the property. In a joint names case the property is held in the joint names of the parties and the issue is as to the division of the notional proceeds of sale of the property. Both cases fall to be dealt with in the County Court or the High Court under the Trusts of Land and Appointment of Trustees Act 1996 (“TOLATA”).
Sole Name Cases
In a sole name case the claimant will be alleging that the defendant holds the property on trust for both parties in specified shares. Typically this will be a common intention constructive trust based on actual discussions between the parties and expenditure by the claimant in reliance on these discussions or assurances given by the defendant. It is important to understand that in a sole name case contributions to mortgage payments or other outgoings alone will not result in a successful claim. There must be something akin to actual discussions for such a claim to succeed (Lloyds Bank v Rosset [1991] 1AC 107 – still good law, despite criticisms in Stack v Dowden).
Joint Name Cases
The position is different in joint names cases. The starting point is to see whether there is any express declaration of trust signed by the parties contained in the TR1 transfer document or elsewhere. If so, that declaration is binding in the absence of fraud, mistake or undue influence (Goodman v Gallant [1986] Fam 106). If there is no such declaration, the court will look at the whole course of dealings between the parties and may even impute to the parties a joint intention they never actually had (Jones v Kernott [2011] UKSC 53). Having said that, it is clear that in cohabitation cases the presumption will be that the property is held by the parties under a beneficial joint tenancy (Stack v Dowden [2007] UKHL 17); that is to say in equal shares if sold during their lifetime, with all the equity going to the survivor in the event of one of them dying before sale. A joint tenancy can easily be severed by sending a simple letter, the effect of which is that the parties will be tenants in common in equal shares with no right of survivorship. The circumstances in which this presumption can be rebutted are said to be limited and unusual; an example is provided by Stack v Dowden itself, in which the parties always kept their finances entirely separate from each other and there was a very substantial imbalance in their respective contributions.
Equitable Accounting
Where there is an express declaration of trust setting out the parties’ respective shares it is still possible in limited circumstances to argue that the proceeds of sale of the property should be distributed otherwise. When a couple separates and one party leaves the cohabitational home, it may be that the party remaining in the property takes on all of the mortgage instalments for a substantial period of time. This will found an argument for “equitable accounting” whereby the paying party seeks compensation out of the proceeds of sale for mortgage payments that would previously have been made by the other party. That other party might make the counter argument that he/she is entitled to a notional “occupation rent” to compensate them for being excluded from the property because of the separation. Often the court will simply find that these claims cancel each other out, but this is not always appropriate depending on the rental value of a property and the amount of the mortgage. In joint names cases with no express declaration of trust, such matters can be dealt with differently under the “whole course of dealings” rubric.
TOLATA Claims
The principal remedies in respect of real property are provided by Section 14 of TOLATA: these are a declaration as to the parties’ respective beneficial interests and an order for sale of the property. In respect of the latter the court does have some discretion; the matters to which the court is to have regard are set out in Section 15 of the Act and include the welfare of any minor who occupies or might reasonably be expected to occupy the property as their home. In most cases where there is no child of the relationship there will be no reason for the court to exercise its discretion to refuse an immediate order for sale. Where there is a child of the relationship it is likely that one or other parent will make an application in the Family Court under Schedule 1 to the Children Act, in which case any application for an order for sale is likely to be adjourned pending determination of the Children Act application.
Claims are issued in the County Court using either Part 8 or Part 7 of the Civil Procedure Rules. In all cases where there are likely to be significant issues of fact, Part 7 procedure must be used, which requires proper pleadings and disclosure before proceeding to trial. In other cases, the simplified Part8 procedure can be used so that the case proceeds straight to witness statements and can be dealt with relatively quickly at a hearing before a District Judge. Regardless of the complexity of the case, parties must exchange pre-action protocol letters before any claim is issued. As with all civil litigation the parties must actively consider all forms of alternative dispute resolution, particularly mediation, failing which there may be adverse costs consequences for any party unreasonably refusing to engage.
Conclusion
In summary, there is no requirement of fairness or any other discretionary factor in determining how to divide the assets of a separated couple who were never married to each other, with the slight exception that different considerations can arise where there is a child of the relationship. Even in that circumstance, the courts have no power to permanently deprive a party of his or her property rights in favour of the other party. In this sense, cohabitation remains a very different proposition to marriage, notwithstanding that it is now the choice of an ever-increasing proportion of families.
Matthew Brett
2025
