Stephen Gold is a retired judge and author who has written popular series for This is Money on topics including how to be a successful executor, consumer rights and divorce

In part one of a new guide on cohabitation he debunked common myths, and in part two he looked at legal agreements. 

Today, he explores property rights, and who gets what if a cohabiting couple split up.

If both cohabitees are registered at the Land Registry as joint owners of the property in which they live or intend to live together, then on break up, the likelihood is that the property will have to be sold and the sale proceeds shared between them.

Shared how? It depends on the extent of the interest in the property the law regards each of them as owning.

They will either have owned as 'joint tenants' or as 'tenants in common'. These phrases are used by the law in order to confuse because, in reality, they are nothing like tenants of a rented home but owners.

Never mind. If they are joint tenants, the presumption is that each party owns 50 per cent of the property.

If they are tenants in common their interests will have been spelt out in the purchase documentation.

It could still be 50 per cent: it could be less or more, probably depending, for example, on how they contributed to the deposit on purchase and the shares in which they were intending to pay the mortgage instalments.

It will be evident from what is recorded at the Land Registry whether they are 'joint tenants' or 'tenants in common'.

On death, if they were 'joint tenants', the interest of the deceased would automatically pass to the survivor, even though the deceased's will purported to gift it to somebody else.

If they were 'tenants in common', the deceased's interest would pass to whoever it was gifted to in their will or, according to the intestacy laws if no will.

A 'joint tenancy' can be painlessly converted into a 'tenancy in common' at any time after purchase by a simple document. (There's a template in my book - see below.)

Back to life. The moral is clear. If you are off or going to be off the deeds, try and get on the deeds!

It can be done years after purchase, and it may be possible to achieve even without the concurrence of the mortgage lender if they are being awkward.

Otherwise, the same result may be achieved by the sole owner making a written declaration that they hold the property on trust for both.

Only 50-50? Things have changed

You might reckon that what was originally agreed and stated about shares in the property was conclusive.

In the event, the law does recognise that a couple's intentions about the shares in which they own the property may change over the course of time.

Take this case decided by the Supreme Court. Ms J and Mr K were already cohabiting when they had purchased a property in Essex as joint tenants in 1985 for £30,000.

In 1993, Mr K moved out. Ms J remained in the property with the couple's two children and took full responsibility for the mortgage and other outgoings.

In 1995 the couple cashed in a joint life policy and split the proceeds. Mr K used his share as the deposit on a home for himself.

By 2008 the value of the Essex property had increased to £245,000. The Supreme Court ruled that by then, the couple's intention about their interests in the property had changed from the original presumed 50-50 to 90-10 in favour of Ms J.

And in another case, in the High Court, the couple had originally intended that their home would be owned by them as 'tenants in common' in equal shares.

It was held that this intention had changed over the course of time as evidenced by the fact that one of them had abandoned the other in the property. As a result, the abandoning party lost the entirety of their interest in it.

You never can tell!

The sole name home blues

The fact that the home is registered in the name of only one of the cohabitees may not be the end of the world for the other.

If there is a cohabitation agreement, this might state the couple's intention that the other should be treated as having a share in the property.

Otherwise, what may come to the rescue of the party 'off the deeds' is the law of constructive trusts.

This is how it works. That party proves the couple both intended they should have a share – there was a verbal agreement, arrangement or understanding between them to this effect which will usually have been before purchase but it could be later on – and that they acted to their detriment in the reasonable belief that they were acquiring a share.

What sort of comment might be good enough to prove that vital intention?

'You're going through a divorce right now. I won't put your name on the deeds as this could mess up the financial case between you and your hubby.'

That should be okay. And this.

'As you're under 21, you'll have to stay off the deeds for the moment.'

False. Any lies pedalled as an excuse will be treated as the truth.

A financial contribution towards the purchase price would be a strong indicator of intention.

So might some other payments such as conveyancing or survey fees or, later on, payment towards the mortgage (under a repayment mortgage, that is, with interest payments only, sometimes being insufficient).

Bearing the cost of substantial improvements to the property will also be strong evidence of not only the couple's intention about ownership but that the payer acted to their detriment.

Undertaking manual labour in the property's improvement without paying for materials may also be enough in some cases.

Proprietary Estoppel

This has nothing to do with constipation and, I know, it does sound painful.

It was anything buy painful to Ms B. She had come out of a failed marriage with about £25,000 of which she spent £15,000 fitting out and furnishing a housing association property she rented in Manchester for herself and two daughters.

Then she met Mr T who was a single man, working as a claims manager. By nature, he was found by a judge to be shrewd, cautious and guarded.

He was against the idea of marriage but wanted to live with Ms B and the girls. They found a house together in Droitwich which he purchased in his sole name.

He paid out £140,000 towards the property which came from his previous house and took out a mortgage for the rest of the purchase price.

Mr T reassured Ms B that she would always have a home and would be secure in the Droitwich property.

On the strength of that assurance, she gave up the Manchester tenancy and moved into the Droitwich property with the girls.

She spent £4,000 to £5,000 towards setting up the new home although Mr T paid the mortgage. Around nine years later after a breakdown in the relationship, Ms B and her daughters found themselves homeless. Mr T had broken his promise.

Ms B took Mr T to court. She was unable to show that it had even been intended that Droitwich should be jointly owned and so there was no constructive trust to this effect.

Retired judge and writer Stephen Gold 

Ex-judge Stephen Gold's The Return of Breaking Law, published by Bath Publishing, is an irreverent guide to legal rights and winning in court or losing well. 

It gives more information on the topics covered in this series of articles and is full of tips and templates. 

Among the numerous other areas featured are consumer rights, financial remedies on divorce, succeeding on small claims, making a will, battling with sellers, creditors, domestic abusers, lenders and landlords - and how Stephen coped as lawyer to the Kray Twins.

But what she could do was to take advantage of the doctrine of proprietary estoppel. That involved proving that Mr B had made a promise relating to the property PLUS she had relied on it to her substantial detriment PLUS Mr B had acted unconscionably.

The Court of Appeal upheld the trial judge's ruling that proprietary estoppel applied.

In relation to Mr B's argument that he had not acted unconscionably, it regarded the repudiation of his promise as unconscionable.

That was enough. Ms B was to be compensated for the prejudice to her by Mr T's failure to honour his promise. She was entitled to an award of £28,500 which is what the £25,000 she had shelled out on Manchester and Droitwich was worth when the case was heard.

Equitable accounting

Here is another phrase known to the law which does not often crop up in conversation in Waitrose unless between two lawyers blocking an aisle while doing the weekly shop.

Equitable accounting is a means by which the court has a discretion to be fair and to balance the books, usually between cohabitees after breaking up.

Of course, it is open to the couple to be fair by an agreement between them, without court involvement.

Most commonly this accounting will come to the rescue of one party who is off the deeds, cannot prove they have an interest in the home and, also, cannot take advantage of the law on proprietary estoppel.

Despite all this, they have spent money on the property which for which the couple intended they should be reimbursed but it has not happened.

The amount involved needs to be sufficient to trouble the court: more than the cost of those non-antique china flying ducks the visitors used to laugh at (but no offence intended, some of my favourite ducks are flying).

The expense involved could have been for substantial improvements or repairs, for example: or for payment or contributions towards payment of the mortgage instalments although they could be cancelled out by the benefit to the payer of having had somewhere to live.

An argument for equitable accounting can also be raised by one party against the other party's trustee in bankruptcy where that other party has been made bankrupt and the trustee is forcing a sale.

When one party has been thrown out of a jointly owned home or otherwise had to leave because of the relationship breakdown, the court is likely to give them credit out of the sale proceeds for an 'occupation rent' or compensation to reflect the benefit to the other party of being able to continue to live there pending sale.

Ensure that the amount involved is worth the argument, though.

In one case which went to the Court of Appeal over a shared ownership property, it was ruled that the entitlement of one party to an occupational rent was completely cancelled out by the other party's payment of the mortgage and rent.

IN PART FOUR... Stephen Gold explains what happens regarding the children of cohabiting couples if they split up, and inheritance rights.