February 15, 2017

Woman ordered to pay £50,000 to ex-boyfriend: What cohabiting couples can learn from cases like this

Order for Possession

A former cohabiting couple ended a long-running claim with an expensive day in Court. Mr Powell and Ms Thomas, during the course of their relationship, sought to acquire and renovate a property in Wandsworth, London worth an eventual £450,000.

Unfortunately for Mr Powell the property was acquired in the sole name of Ms Thomas, on the basis that he would contribute his own funds by way of building materials, labour and expenses to bring the then uninhabitable flat up to a liveable condition. An alleged contract was put in place by Ms Thomas's mother, which entitled Mr Powell to a third of the share in the profits of the property.  After completion of the renovation works, the relationship ended and Ms Thomas sought to renege on the contract.

The Court awarded in favour of Mr Powell with him obtaining a judgement in a sum reported as £50,000 together with costs. With costs following the result i.e. Ms Thomas being the loser and having to pay Mr Powell’s costs, it is suggested that the overall bill to Ms Thomas is close to £200,000.

While disputes such as these rarely progress all the way to a full trial, this case illustrates how not to deal with cohabiting arrangements. The sum itself may have been worth fighting for, but the costs soon outweighed the amount at stake. What could have been a clean separation turned into a high stakes legal battle.

When entering into a cohabitation arrangement you  should always consider the following:

1. A declaration of trust from the outset indicating the property shares owned by each party and the arrangements upon sale.

2. A cohabitation agreement setting out not only the shares in the property but also any jointly owned possessions such as furniture, electricals and other expensive items.

3. Each party should always obtain independent legal advice from the outset.  Whilst this may sound unromantic; documents in plain English setting out the parties’ intentions can avoid the extreme consequences reported above.

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