Moving in Together? Do You Understand the Legal Ins and Outs?

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Couples who move in together commonly believe that their shares in the property will reflect their respective financial contributions to the purchase price or mortgage. As a High Court ruling recently reviewed by Stuart Barton made plain, however, such assumptions are often mistaken in that they take no account of the critical distinction between moral and legal obligations.

A man moved into his partner’s council-owned property. She was the property’s sole tenant and subsequently took out a mortgage so that she could exercise her right to buy it. Both the mortgage and legal title to the property were in her name alone. After the man sold his own home and received an insurance payout, he used more than £40,000 of his own money to pay off the mortgage.

He moved out after the relationship broke down and later launched proceedings. He contended that she held on express or constructive trust (for his benefit) a proportion of the property that reflected the extent of his financial contribution. His claim was, however, rejected by a judge, who found that the money was a gift and that any promise of repayment was no more than a moral obligation.

Ruling on the man’s challenge to that outcome, the Court found that the judge had erred in declining, on procedural grounds, to consider his alternative case that the money was advanced as a loan. However, given the judge’s unassailable finding that it was a gift, that failure made no difference to the result of the case. To the extent that there had been a procedural irregularity, the man had suffered no injustice.

There was no evidence of any agreement or arrangement between the couple that the man would be entitled to a share in the property in return for paying off the mortgage. There was no record or written document to that effect and, whether or not the woman felt morally obliged to repay his contribution, there was no fault in the judge’s conclusion that there was no common intention to confer on him a legal right to such a share.

 

We asked Senior Associate Solicitor Stuart Barton for his expert insight –

This case highlights that for cohabiting couples, the current law in England and Wales is simply not fit for purpose. The Court continues to rely upon antiquated and complex principles of equity in determining the outcome of such cases, simply because it has no other choice. These principles are ultimately subject to the interpretation of the Court in circumstances when the judge is seeking to determine what was intended by the couple in question. In this case, the judge seemed able to reach a fairly definitive conclusion that the man’s contribution was a gift alone but there are many other cases when reaching a conclusion upon intention is arguable either way. Litigation for couples in these cases is little more than an advanced form of gambling as the outcome simply cannot be predicted with any real certainty.

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