How a Valentines engagement may affect your property rights
13 February 2023
We wouldn’t be being true to ourselves as lawyers if we didn’t contemplate worst case scenarios and risks. We make no apologies for it.
While, thankfully, most engaged couples make it down the aisle, this isn’t true for everybody.
So what happens if the relationship doesn’t survive until the big day?
As if a broken engagement wasn’t hard enough to deal with, there might also be property law consequences to contend with arising from the breakdown of the relationship.
How does an engagement change rights in property?
Unmarried couples (including engaged couples) do not enjoy the same legal rights as married couples. Please read more about this in our previous article: Cohabiting couples, property and the ‘common law marriage myth’.
Broadly speaking, when it comes to property ownership and claims to the equity in a property, engaged couples do not enjoy the same protections under the law as married couples. There are, however, some enhanced protections for those who are engaged, depending on the circumstances. In our experience, these additional protections are often overlooked.
In particular, section 2(1) of the Law Reform (Miscellaneous Provisions) Act 1970 and section 37 of the Matrimonial Proceedings And Property Act 1970 entitle an engaged (or formerly engaged) person to claim a beneficial interest in property owned by their fiancé / fiancée (or former fiancé / fiancée).
However, this is only in certain circumstances.
In order for the legislation to bite, the non-owning party must have made contributions to improve the property in money or money’s worth (so whether you paid for a contractor or undertook the works yourself).
The improvements must, however, be of a “substantial nature”. The extent to which the works constituted “improvements” to the property which were of a “substantial nature” is likely to be fertile grounds for dispute. This is very fact specific, and your expenditure (evidenced by bank statements, invoices/receipts), accurate records of your time spent if you undertook the labour yourself, and expert valuation evidence on any increase in value brought about by the works will all be relevant considerations.
If works of a “substantial nature” have been undertaken which have “improved” the property, then (subject to any contrary agreement – see below) the contributing party shall be treated as having acquired, by virtue of their contribution, a share (or an enlarged share) in the property.
Any claim must be brought within three years of the termination of the engagement.
As aforementioned, irrespective of the above, if the couple agreed that the non-owning party would not receive a share in the property in return for their contributions, then that agreement will be binding. An agreement in this sense doesn’t have to be a formal, written contract. Rather, an oral agreement will suffice. In fact, the Court is even permitted to look at the parties’ conduct generally to work out what the parties’ impliedly intended. There is accordingly further scope here for dispute over what may or may not have been discussed or intended.
The same legal rights explained above are conferred upon couples who have an agreement to become civil partners pursuant to sections 65 and 74 of the Civil Partnership Act 2004.
What about the engagement ring?
Pursuant to section 3(2) of the Law of Property (Miscellaneous Provisions) Act 1970, an engagement ring is presumed to be an absolute gift, which means that the receiver of the ring would be entitled to keep it, regardless of who ends the engagement or the reasons for the breakdown of the relationship.
However, this will not be the case where it can be demonstrated that the ring was not intended to be an absolute gift (i.e. if it was given on a condition that it be returned if the engagement was terminated).
Another example where there may be a rebuttal of the presumption of an absolute gift may be where the engagement ring was a family heirloom passed down through generations.
We hope that you will never have cause to refer to the legal principles outlined in this article.
While an engagement is plainly an exciting step for any couple, it is clear that the act of getting engaged also has important legal implications in the event that the engagement subsequently ends and the parties later find themselves in dispute.
For further assistance following a breakdown of an unmarried relationship or for advice on property disputes generally, please contact Laura Tanguay on [email protected] or 01473 299188 or Lucy Grunwell on [email protected] or 01473 921761.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at February 2023.