There are many ways to protect your interest in property owned solely or jointly with a former partner or spouse.
It is beneficial to do so from the outset, before any dispute arises. If you are not married, it is advisable to enter into a Declaration of Trust with your partner or a Cohabitation Agreement.
Either document has the effect of outlining the share you own in the property. Upon separation, the provisions in the document give effect. This prevents problems arising after separation. It sets out what will happen to the money on breakdown of the relationship.
A Declaration of Trust or Cohabitation Agreement records:
- How the property was bought.
- The share or percentage owned by each person.
- Who is to receive rental income (if any).
- Who pays the mortgage or outgoings.
- The process should one of the owners want to sell and how any future proceeds of sale are to be divided.
Joint tenants or tenants in common
Ownership of a property can be held as joint tenants or tenants in common.
For joint tenants, the owners each jointly own the whole of the property. This means that if one owner dies, the property automatically transfers to the surviving owner. This is regardless of what the will states.
For tenants in common, this means that the property is held jointly but this can be reflected in percentage shares. For example, shares of 50:50 or unequal shares.
On the death of one owner, the property does not automatically pass to the other owner. Their share passes to the beneficiary under their will.
Particularly in the case of ownership of property as tenants in common, it is recommended that this is reflected in a Declaration of Trust or Cohabitation Agreement. This ensures provision is made for what will happen to the share each party owns.
Married couples or civil partners
For married couples or civil partners, there may be occasions when, for one reason or another, the marital home is vested in the sole name of the other spouse.
By virtue of the marriage, you will have an automatic right to continue to live in the home, even if you are not named on the title of the property.
However, as the property would be in the sole name of your spouse, they could take steps to dissipate the assets in the property. They may seek to sell or re-mortgage the property.
You can take steps to avoid this occurring by applying to the Land Registry for a Matrimonial Homes Rights Notice.
Matrimonial Homes Rights Notice
You can register a notice to protect your interest in the property, pending the outcome of any financial settlement.
This means that other organisations, such as banks or mortgage companies, will know that you have home rights. This means your spouse cannot sell or mortgage the property without you knowing about it.
If you do not register your home rights this could result in you having to leave the property or could restrict your claims for finances on divorce.
Decree Absolute or Final Order
You must be aware that upon the making of a Decree Absolute or Final Order, which has the effect of dissolving your marriage, your former spouse can apply to the Land Registry. By doing this they can discharge the Homes Rights Notice. Your right to occupy the property comes to an end upon the making of Decree Absolute.
Protect your claims further
You can also further protect your claims against the property by registering a Unilateral Notice. However, this is only possible in circumstances in which there is a Financial Remedy application before the court.
A copy of that application is submitted to the Land Registry, who will register a Unilateral Notice against the title of the property as a pending land action.
Your spouse will not be in a position to apply to discharge that notice upon the making of Decree Absolute and the Unilateral Notice will remain against the Title until you apply for it to be removed, once financial matters have been resolved.
Article by Lyndsey Kiley, Chartered Legal Executive.