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Potential Changes in Law Regarding Financial Interest

Jun 13, 2017
After a recent Court of Appeal case (Liden v Burton) it appears that the law as to a person acquiring or having a financial interest determined by the court is changing.

The reason is probably the fact that lawyers (those not in government, anyway) and in this case the judiciary, seem to be stretching the law to give unmarried couples rights where to date, unlike married couples, has not really provided for the weaker party.

In this case, Ms Liden moved into a property already owned by Mr Burton. Mr Burton indicated to Ms Liden that she should pay some money towards the rent and outgoings (romance was presumably blossoming at that time) and an agreement was reached whereby Ms Liden would contribute £500 a month. When Ms Liden found out there was a mortgage on the property and confronted Mr Burton, he told her that £200 of the £500 was being put ‘towards the house’.

After the romance had died (in court there was talk of an engagement – this was denied by Mr Burton) Mr Burton told Ms Liden that she was entitled to nothing. Lawyers, when asked to advise (those in the house) would normally state that as long as the mortgage was not paid directly by the homeowner, or if there was a general ‘rent and outgoings or monies paid towards the house’ type of arrangement, that the homeowner should not worry about the departing party gaining a financial interest in the property. 

The court from this ruling seems to reverse that ‘rule of thumb’. The court found in favour of Ms Liden and decided that Mr Burton, because of what he had said to her previously, had given her an interest in the property. Ms Liden therefore was entitled to a (significant) portion of Mr Burton’s property. 

Please note that Mr Burton can appeal to the next court (the Supreme Court) so the decision could be reversed. 

What advice are we giving to cohabitants? 

Make sure you have a cohabitation agreement drawn up. It is a contractual document and will provide certainty as to what the financial arrangements will be moving forward.

Pete Dodd

About the author

Pete Dodd

Pete joined Nockolds in 2004 as a Partner within the Family Team. Before joining the firm Pete graduated from Bristol University with a degree in ...

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