The vast majority of people fully understand the importance of taking legal advice before embarking on a commercial transaction but when it comes to their private lives, this vital advice appears to be absent or abandoned, particularly in relation to new relationships. In situations where a house shared by a couple but owned by the more advantaged party both parties should consider the potential consequences if the relationship does not work out. When personal relationships are new it seems that many individuals fail to consider that the new love of their life would ever be less than honest in the aftermath of a break-up.
Gay Lawyers (the LGBT division of Giambrone) is often approached by clients whose relationship has soured and they find themselves at a disadvantage as they simply took the word of their estranged partner that they would be treated fairly in the event of a split. Daniel Theron, a partner, commented “it seems that when a relationship is in the early stages and going well the parties trust one another and the party of lesser financial standing may feel awkward about asking for a degree of financial security to be incorporated in a legal document, believing that such a request may seem cynical and mercenary,” Daniel further comments “many people have regretted not taking legal advice and protecting their position when a relationship eventually does not work out. Regrettably, there can be devastating consequences.”
When an unmarried couple start out together such practical considerations as to the division of assets in the event of a breakdown of the relationship are rarely thought out. The less financially secure partner may feel uncomfortable and unwilling to be perceived as mercenary; alternatively, the better off partner may not want to be seen as not trusting his or her new love. Whilst the relationship is successful this omission may be able to be managed but if things go wrong the consequences can dramatically impact on one of the partners.
Gay Lawyers was instructed by our client, Mr A, who had been in a 35-year long relationship with Mr B. The couple had known each other for over 50 years but had never married. Mr. B owned the property they lived in having bought it shortly before the start of the relationship. Despite the fact that the property was owned by Mr. B, Mr. A and Mr. B shared the costs of the mortgage and the day-to-day running costs equally. Mr. B commissioned a Dead of Trust setting out what should happen if Mr A vacated the property and/or should the property be sold, clarifying how the proceeds of sale should be divided. The Deed of Trust stated that in the event of Mr B’s property being sold the proceeds would be divided on a 50/50 basis between Mr A and Mr B less £20,000 deposit that Mr B had initially paid on the purchase of the property. The couple made mirror wills leaving their entire estates to each other. However, Mr A was not named on the Title Deed of the property as Mr B was advised against this. Mr A believed that he was protected by the Deed of Trust and that his relationship and his interest in the property was sound he, therefore, did not take independent legal advice, trusting to the honesty of his partner and the protection of the Deed of Trust which had been commissioned by his partner alone.
All was well until their relationship unravelled and Mr B informed Mr A that he was putting the house up for sale and then subsequently gave Mr A notice to quit. Mr A vacated the property less than a month after having been given notice. It was always understood by Mr A that should the property be sold, the couple would buy a property together and the agreed amount of £20,000 would be returned to Mr B, with the remainder of the proceeds to be placed in a joint bank account. In light of their long relationship, Mr A expected that a fair arrangement would be arrived at and Mr A believed that he could rely on the numerous discussions that had taken place between the couple,(sometimes in front of witnesses), as well as the Deed of Trust, as to how the proceeds of the sale would be distributed. The Deed of Trust was silent on what should happen should the parties wish to amend the Deed of Trust. Mr A considered that he and Mr B had entered into a binding agreement that the proceeds of a sale would be distributed 50/50 (less £20,000 paid out by Mr B as a deposit when buying the house).
Following the acrimonious breakdown of the relationship, Mr A discovered that he had been mistaken to rely on Mr B’s assurances on discovering that Mr B was not prepared to honour their verbal agreement and insisted that the Deed of Trust only should apply. Furthermore, Mr B denied that Mr A had made any contributions to the mortgage or the household expenses stating that Mr A had not paid one penny towards these costs. Mr A found himself in a difficult predicament as he had bought another property and also applied for an expensive bridging loan whilst waiting to receive his share of the sale; he would have taken neither step had he been aware that his former partner intended to renounce their verbal agreement.
The Deed of Trust made provision for two methods of calculation for the division of the proceeds of the sale of the property. The first provided for a 50/50 distribution of the proceeds of sale, less £20,000, whilst the second provided for a 50/50 distribution less half of the difference of the value at the date of the Deed (£50,000) and the value at the date of Mr A leaving the property. The first option did not require Mr A to contribute equally towards the mortgage payments and day-to-day expenses, whilst the second option did require equal contributions by Mr A. The Deed also provided for two methods of payment of the proceeds of sale, the first being an immediate lump sum payment and the second being payments by instalments spread over an eight-year period.
Daniel Theron, who led the case, highlighted two potential legal arguments to counter Mr B’s contention. One being that the Mr A relied on the assurances provided by Mr B as to how the Deed would be interpreted and Mr B cannot now retract his statements and the other being that both parties had agreed that the Deed defined any dispute over interpretation and Mr B was bound by that agreement. A further area of contention was how the proceeds would be paid to Mr A and whether Mr B should be able to retain the proceeds of the sale and the benefit of any interest accrued whilst he made payments in instalments over a period of eight years, which was Mr B’s preferred option.
Daniel commented “our client almost certainly felt that he could rely on the long relationship, the Deed of Trust and the periodic discussions with Mr B regarding the division of the proceeds of a sale of the property and that they were sufficient to ensure that his position was sound. Unfortunately, the unexpected duplicity of his partner placed him in a very tenuous position.” Daniel set about piecing together the evidence where he faced procuring thirty years of bank statements and building a schedule of evidence and a strong legal argument to support our client’s contentions. Daniel then demonstrated that Mr B’s contentions were either misinterpreted or not founded. Our client was able to receive his just entitlement.
Gay Lawyers family team has enjoyed considerable success when assisting our clients in similar contentious situations and has considerable experience in drafting bespoke agreements to protect both parties from exploitation. Trusting a person’s word, however much you believe they are sincere, may result in disaster. A legal agreement of such importance between two parties should be a bespoke document drafted for the unique circumstances of each relationship and have sufficient foresight to off-set changes in the relationship. Independent legal advice must always be sought regardless of any awkwardness; failing to do so can so easily result in catastrophe. Gay Lawyers extensive mediation expertise can also assist in obtaining a just solution to an individual caught in a similar situation to that outlined above. If your relationship has ended and you have not been treated fairly our expert empathetic lawyers may be able to assist.