Finances and Cohabitation – TOLATA – Schedule One Application – Finances for unmarried couples
The courts have two separate processes for dealing with married couples who divorce and for cohabiting partners who separate. Both have evolved over many years and a rough estimate of where you stand is possible by considering the full financial picture.
The major difference between married couples and cohabiting partners when they separate and consider how to divide their finances, is that in many way married couples have better protection to prevent them ending up without a claim.
As with most cases that go to court, although there are set principles in place which a Judge will follow, there are a variety of factors which will allow the Judge to deviate from the norm and consider alternative approaches. Therefore this article can only look at the theory and general approach. For a more detailed assessment, book a consultation with Simon Walland.
At separation the main asset is generally the house. It has in all likelihood risen in price and the mortgage is worth more than when you started, leaving a sum of money which may belong to one or both of you, and the share each gets may vary.
The court will consider as a starting point, who does the house belong to. It may be in joint names (indicating an equal share unless there is documentation to indicate otherwise), such as an unequal deposit, or loans for home improvements in one name only. The variation in shares tends to become complex where the house is in one name. If so, who paid the mortgage and who paid for home improvements. Effectively, by who paid towards the direct costs of the property (for example, not paying utilities or food, but towards redecoration, the extension or the mortgage). In essence, the more you pay if your name is not on the property, the bigger share of the property you buy.
For example, if John buys a flat in his name for £150K his parents lend him £50K as a deposit (all incorporated into a loan agreement) and he then pays the mortgage for 5 years, meets Wendy and they live together and Wendy pays the mortgage for the next 5 years, and the flat is now worth £250K. The Equity to be considered is the sale price of £250K less the deposit to Johns parents, and then clearing the mortgage. The equity in this case could be perhaps £150K because the original mortgage has reduced. Because both partners paid the mortgage for 5 years each, they would be likely to share that equity half each. The variations on who paid what and values will obviously vary from your own case, but it is a general principle. If John has always paid the mortgage and Wendy has paid for the food shopping, she will get nothing as she did not contribute to the direct costs of buying the property. (This approach is known as TOLATA, which refers to the Act that guides it)
Having children turns the whole thing on its head and a totally different scenario would follow. (This is where an application under Schedule One of the Children Act would be the right approach)
The only way to get an idea of what is possible is to book a call with Simon Walland.
Simon Walland has been dealing with Family Court cases for 19 years and will be able to point you in the right direction via a telephone consultation, or to assist in preparing your paperwork for each hearing.
Self-representation is not impossible with the right guidance, and Simon Walland will provide that so that you can approach your hearings with confidence and knowledge of what is likely to happen and what you need to do to help things go in the direction that you want them to.