Cohabitation Disputes | Court Wingman

Cohabitation Property Disputes

We specialise in disputes over property and the most common queries we have relate to co-habitation property disputes. These are commonplace. Many couples choose to marry, only to discover that the same law does not apply as for married couples and so the question of whether a party owns a share of the house arises. (You may own a share, even if not on the title deeds – see videos below.)

The law that covers this area is not matrimonial law and the court is not the family court. The law is based on precedent cases such as Stack v Dowden and Jones v Kernott and the matter will be heard in the county court, as with any general litigation. You should not therefore assume that, just because a law firm is a family specialist, that they know how to deal with these types of disputes.

The solicitors at Courtwingman have a great deal of experience of these cases. Courtwingman can advise you generally about how to deal with these claims, help draft letters of claim, advise on merits and advise on critical issues such as whether to bring the claim by the Part 8 or Part 7 procedure. If it looks as if the matter may end up going to court it is nearly always better to use a law firm to conduct the litigation rather than trying to run it yourself, because these types of cases are complex. Check whether the law firm you wish to use will do it “no win no fee”. Not all cases can be run this way, but a serious litigation law firm should at least have this option up their sleeve – and not rule them out for firm policy reasons, as these types of retainers are an important weapon in the litigation arsenal.

Below are some videos that will help you gain a general understanding of this unique area of law.

If the videos do not answer your question than email hello@courtwingman.com. Supply any key documents that can be shared and reviewed during the call. A lot of people just want some initial, hands-on and “no strings attached” legal advice and our solicitors at Courtwingman can give you that.

There are certain misconceptions about English law in relation to co-habitation disputes. It is not like marriage and divorce where different law applies and nor should you treat it in the same way as you might if you were business partners buying a property together …

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This case, which is hypothetical but very typical, is one of those instances in which the court probably would depart from the rule of joint ownership or 50% equal shares. The reason being that it is not just that the financial contribution is significant (as you will know from other videos this is not necessarily a good enough reason to depart from a 50% split) but that the relationship ended and so the common intention may have changed …

I also look at what steps the client should take as it is, of course, one thing being in the right but quite another actually enforcing rights. Essentially this is to take legal advice on the specific aspect of the case, then open up correspondence with the ex-partner in amicable fashion and then only if that goes nowhere to instruct a lawyer.

It is obviously very important to exhaust attempts at pre-action settlement as this will protect you against costs if you then have to issue. Once the lawyer is instructed they should probably make what is called a "part 36" offer before commencing proceedings, which should be realistic.

I also look at what the court might order. After all, the other party may wish to hang on to the property and wait for it to increase in value (or there may be emotional reasons). But a court would order a sale or allow one party time to re-finance. It would not be happy with the ownership being in the air like this after the couple has split up.

I then look at the key issue of whether and what is the cost of a lawyer and legal proceedings. Essentially it boils down to whether or not you think your ex-partner is going to be reasonable and co-operative. If you do then a normal hourly-rate may be best. If not, it may be better to try and find a No Win No Fee lawyer who will take 15%-25% on your share of the equity in return for working largely for free. He will also bear the lion's share of disbursements which can be very expensive (an issue fee alone in this case could be £5,000). He will also take out insurance to protect you against having to pay the other side's legal bill if you lose.

This can look daunting initially, but it can be powerful if the ex-partner wants to make life difficult. This is because they cannot sit back and do nothing, because if they do they could end up seeing their share of the equity being eaten up in your lawyer's legal fees and that lawyer is highly motivated to win a victory. (Fees to trial could be around £25,000 or more.)

I refer to figures in the video and produces tables below to illustrate how the split in this example may work, taking a property bought for £100,000 in 2006, a relationship that ends in 2008 and a value of £220,000 in 2015.

The courts are in fact used to making percentage orders and this particular example has a striking precedent in one of the landmark cases, Jones v Kernott SC 2011 in which one partner had already moved out of the property years earlier.

The split was approximately 15% to him, 85% to her. A realistic and very reasonable offer in this case would be 33%. So, to conclude our example, if the property was worth £150,000 in 2008 he receives approximately £30,000 (the mortgage of £90,000 is redeemed leaving £60,000 equity). It is now worth £220,000 so if it is sold in 2015 she receives £100,000. £30,000 is approximately 25% - so the courts may like this rounded approach and this figure does in fact "feel" fair. 25% is the likely outcome therefore at trial. So in the above example she could end up with losing 15%-25% of her share to the lawyer. If we assume he accepts an offer of 33% of the current equity in the property then:

He gets £43,333 She gets £73,666 (£86,666 - 15% legal fees) A conservative valuation of £150,000 has been used and a conservative offer of 33%. So she could get more and you may hope that the lawyer would be able to negotiate an extra £10,000 possibly, representing the refund of the deposit. Costs of going to trial could be anywhere around £25,000 or more. Costs to get the case issued could easily be £10,000 in a claim of this value.

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An overview of when a cohabitation dispute involves child maintenance and the entirely different complexion that puts on the case.

I include a summary of how the Child Maintenance Service (CMS) and the Child Benefit office overlap with the courts …

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There are a lot of costs involved in taking an ex-partner to court over and above the lawyers’ actual hourly rate. I have had a couple of successes very recently in the area of co-habitation property disputes such that I am able to give good general guidance on this issue …

There are a lot of costs involved in taking an ex-partner to court over and above the lawyers' actual hourly rate. I have had a couple of successes very recently in the area of co-habitation property disputes such that I am able to give good general guidance on this issue.

One of the cases was a £100k + figure claim by a lady who instructed me to fight for a share of the property she bought with her ex-partner many years ago. I have also had a recent enquiry in a similar case which raised the same issue - a ex who may be wealthier and can play the "my lawyers are bigger than your lawyers" game and intimidate a ex-partner into settling for a derisory amount.

I deal with other areas of no win no fee in other blogs, but for this one I want to deal with the problems of disbursements; the costs of actually getting your ex-partner (and it could be a business partner, not just a romantic relationship) and the difficulties that the current legislation enacted in 2015 has put in the way and how to overcome them.

The biggest change in March 2015 was to court fees, which have gone up astronomically, to simply bring your claim. Of course a defendant can sit and wait to see if you are "man" enough to actually put your hand in your pocket. The ex-partner may already be fearful, let alone having to simply write a huge cheque to issue proceedings.

Here are some example fee bands before and after: £300,000 Before: £1,720 Now: £10,000 £250,000 Before: £1,515 Now: £10,000 £200,000 Before: £1,315 Now: 5% of the claim value £150,000 Before: £1,115 Now:5% of the claim value

Massive changes. Where on earth are you expected to find the money? The problem is you may already have been using a conventional solicitor and paying them money, but when it comes to issue, where are you? Suddenly they are asking you for £10,000 JUST to get the ball rolling! And then there is the further issue of ATE Insurance and other disbursements. What are the costs of those? They too could be £10,000, and even though you only pay the premium if you win (out of your winnings) you may be required to pay up-front £1,000 or £2,000 deposit, probably non-refundable even if you lose.

You will also have issues along the way: additional court fees / expert report / counsel's fees for interlocutory hearings / applications etc. etc. These could be £1,000 or £10,000. At least they can be claimed from the other side if you win and can also be covered by the above insurance if you lose.

And thirdly, there is the issue of the "success fee". This is the uplift on their hourly rate they are allowed to impose, but the law has changed so that, along with ATE insurance premiums, you cannot claim the success fee from the other side if you win. This is in fact the 25% "contingency part".

So the problem is that the solicitor may have told you that it is no win no fee, but is it really? Fortunately in these types of cases there is a way, but it does need a solicitor who is geared up for this type of work and who can cashflow the litigation and has the nerve not to settle under pressure.

He also has to be prepared to assist you with funding the above, which he is allowed to do. Not all solicitors - in fact not many at all - want to do this because of the risks of losing and getting nothing AND even losing out by having part-funded disbursements. You need to find those that do. Who will, quite fairly in my view, ask you to put up a % of the property to pay them for the risk.

28 May 2016

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Just recently we successfully completed settlement on a co-habitation property dispute in which we represented a Polish lady against her ex-partner, who was not prepared to give her a proper share …

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I cover the legal landscape and how cohabitation is quite different from marriage, before going on to talk about specifics in relation to what the legal “test” is for these cases. (Including issues around title deeds and declarations of trust.) …

40 minute podcast.

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