Sharing Homes -A long-awaited paper - [2002 ] PDF

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Family Law/2002/November/Articles/Sharing Homes –A long-awaited paper – [2002] Fam Law 834Family Law[2002] Fam Law 834November 2002Sharing Homes –A long-awaited paperREBECCA PROBERT, University of WarwickThe Law Commission's consultation paper on home-sharers had been eagerly awaited for almost a de...

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Family Law/2002/November/Articles/Sharing Homes –A long-awaited paper – [2002] Fam Law 834

Family Law [2002] Fam Law 834 November 2002

Sharing Homes –A long-awaited paper

REBECCA PROBERT, University of Warwick The Law Commission's consultation paper on home-sharers had been eagerly awaited for almost a decade. Judges, faced with disputes over the ownership of the family home, had given the project their blessing (see, for example, Drake v Whipp [1996] 1 FLR 826), and practitioners and academics alike expressed their support for reform. After such anticipation, Sharing Homes: A Discussion Paper (Law Commission, 2002) is, to say the least, something of a disappointment.

Not a Consultation Paper The first point that should be made about the discussion paper is that this is not a consultation paper: there are no specific proposals for reform and responses are not invited (para 1.32). If the Law Commission had decided that the current law was satisfactory and recommended that there should be no changes, it would be easier to understand the reluctance to solicit responses. But the Commission acknowledges that the current law is unsatisfactory and needs to be reformed. It simply could not find an appropriate solution within property law. It considered whether a contribution-based approach would provide a sound basis for reform, but ultimately decided that:

'the infinitely variable circumstances affecting those who share homes have rendered it impossible to propose the scheme as a viable and practicable reform of the law.' (para 1.27)

On the other hand, it did not dare to venture into family law, indicating that it considers the issues 'more appropriate for political debate and decision, rather than for a law-reform body' (Conclusions, at para 9). It is hard to escape the suspicion that the Law Commission is eager to be rid of this project.

Not a Paper on Cohabitants The second point is that this is not a paper on the legal status of cohabitants. The Law Commission is quick to point out – in the second paragraph of the executive summary – that it 'has not been examining the issue of the rights and obligations of unmarried couples' (at para 2). It has proved remarkably reluctant to do so. It first considered whether it should carry out a review of the legal position of cohabitants in the late 1970s (Fourteenth Annual Report 1978–1979 Law Com No 97 (HMSO, 1980), at para 2.32). A preliminary survey

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on the law relating to the enforceability of cohabiting contracts was subsequently undertaken by Chris Barton, Cohabitation Contracts (Gower, 1985), but no further action was taken. In 1992, it again suggested that the law relating to cohabitation outside marriage should be examined. It noted that the legal rights of cohabitants had been considered in different contexts but 'the time may now be ripe for a more systematic consideration of the subject as a whole' (Twenty-seventh Annual Report 1992, Law Com No 210 (HMSO, 1993), at para 2.40). However, instead of a review of the rights of cohabiting couples, in 1993 work began on the property rights of 'home-sharers'. There were a number of good reasons for focusing on the property rights of cohabiting couples. This was an area that had been extensively criticised on account of its theoretical incoherence and its harshness to the cohabitant whose contributions did not meet those required by the law. Furthermore, no reform could be expected by the courts, which had emphasised that the matter was one for Parliament (see, for example, Burns v Burns [1984] 2 WLR 582). On a practical level, with the departure of Brenda Hoggett from the Commission in 1993, there was no longer a specialist family lawyer among the Law Commissioners. It was the Property and Trust Law team, under the aegis of Charles Harpum (succeeded by Stuart Bridge in July 2001), which decided to carry out the project.

Not a Family Law Project As noted above, the project was, from its inception, the responsibility of the Property Law Team, with the assistance of such family lawyers as remained within the Commission. The property law roots of the paper go deeper than this. Central to property law – or at least to its self-image – is the idea that status does not matter. Of course, judges have tended to blur the distinctions between family law and property law by taking the relationship of the parties into account in assessing their intentions and contributions. But property lawyers see cases such as Midland Bank v Cooke and Another [1995] 2 FLR 915 as the unfortunate consequence of letting family law concerns into the realm of property law. Within the discussion paper, this aspect of a property law approach manifests itself in the fact that little reference is made to the wealth of material on the characteristics of those who share homes. Since property law is applicable to everyone, the potential impact of the law on different permutations of home-sharing has to be considered. Yet how many households are made up of friends or of relations outside the nuclear unit of parents and children? How many non-dependent children reside with one or more parents? And where such home-sharing arrangements do occur, what would be a typical pattern of contributions? Similarly, where cohabitants share a home, how likely is it that one of them will be working part time to care for children? This is not to argue that reforms should focus merely on the typical situation, merely that it would be useful to have an idea of the social background in order to ascertain the extent to which the law fits – or fails to fit – the lives of the people involved. Otherwise, it is difficult to assess the extent of the problem.

Not Sufficient to Focus on Property Law The only solution examined in depth is the possibility of a statutory contribution-based regime. Under this approach, financial contributions – whether direct or indirect – and domestic work would yield a proportionate share in the property under a statutory trust, unless there was evidence 'that the contributor intended to gift or lend the property or services in question' (at para 3.25). This option is ultimately rejected. One gets the impression that the Law Commission has been looking at this project for so long that all it can see are the objections to the possible options. The tone is defeatist and the perceived objections are seen as insuperable rather than spurs to look at the project in a different way. As the Commission notes, it is difficult to justify the exclusion of those providing services to a person with whom they do not share a home. This difficulty does not lead the Commission to question whether its concept of 'home-sharers' is an appropriate one. Either there is something special about sharing a home – in which case there is a justification for excluding those that do not live in the same household – or there is not, in which case a different basis for reform should be sought. If the aim is to reward certain types of contributions to the family home, would it not be simpler to allow claims from anyone who has made a recognised contribution?

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It might be objected that this would expose the legal owner to the risk of claims from all sides. Restitution lawyers, for example, seem haunted by the shadowy figure who makes improvements to the house without the legal owner's knowledge. Yet surreptitious window-cleaners and their ilk could be excluded by the criteria that the relationship could not be a purely commercial one. The pool of potential claimants could be limited further by insisting that the contribution must have been substantial. The legal owner could hardly fail to be aware of such contributions and, thus limited, the risk of multiple claims falls away (for all but a lucky few with a multitude of generous friends and relatives). The same arguments could be used to counter the Law Commission's objection that a trust would be inappropriate where the contribution made was small. If the contribution was so small that it was outweighed by the countervailing benefits, then the claim should not be allowed in the first place. If the contribution is sufficient to found a claim, then the fact that it yields only a small interest in the property would not be problematic, as the legal owner would easily be able to buy out the other. The alternative would be to make a monetary award where the contribution is small. A third problem identified by the Commission is that the scheme does not take the intentions of the parties into account, and that this is 'ultimately impossible to justify' (at para 3.76). But the scheme examined does not prevent the parties from making their own arrangements: formal agreements would still be binding. Of course, one of the problems is that many home-sharers do not make formal agreements, but it seems odd to criticise the current system for its emphasis on a (sometimes fictitious) common intention, yet then argue that the new system would be unfair because it excluded evidence of such intentions. And once again, the objection is not sufficiently grave to undermine the entire scheme. It would be possible to graft intention on to the proposed scheme, so that a certain contribution would yield a certain result unless the intentions of the parties dictate a different approach. This would, of course, make the system more complicated, but it is only too apparent that a simple formula will not work. A second option would be to see the contribution-based regime as a supplement, rather than an alternative, to the existing law. Indeed, it would be odd if homesharers were to be debarred from relying on proprietary estoppel or constructive trusts when these options would still be available to others. The Commission illustrates how its scheme might operate with two worked examples, one involving an adult son living at home for 10 years, the other a woman moving in with the father of her child. Some of the figures seem wholly unrealistic: would a couple in their sixties with an adult son living at home really spend over £1,300 per month on general household expenses? And is not the notional sum of £10,000 pa for the value of the accommodation provided – over £800 per month – a little excessive for a room in one's parents' house? It should be contrasted with the value of the accommodation provided to the cohabitant, which is put at £2,500 pa. Moreover, the Commission seems reluctant to credit the legal owner with even this reduced sum, noting that it seems 'wholly unreasonable that G should account for the accommodation cost where the legal owner is her cohabitant and the father of her child' (para 3.72). Perhaps so, but if he is deemed to be providing accommodation out of love and affection, should not the same argument apply to her domestic work – here credited with a generous £15,000 pa? The male cohabitant, who is deemed to be paying £5,000 pa in mortgage repayments, is clearly getting a very good deal on his £100,000 loan: the true cost would probably be around 50% higher than this. These criticisms may seem pedantic, but there is a wider concern here than the realism of the figures. The one thing that does shine through these examples, and the various modifications that are suggested, is that the key concern is with cohabitants, despite all the Commission's protestations. Attempts are made to reduce the share of the adult son and the Commission expresses the feeling that it would be unfair for his claim to erode the accrued rights of his parents. On the other hand, every attempt is made to give credit to the female cohabitant's contributions. In the case of cohabitants, calculations are based on the income that they spend on their 'joint lives' – presumably including holidays and meals out – assessed as 75% of their income. By contrast, in the case of the parents and son, only contributions to 'general household expenditure' are taken into account. If the scheme is meant to be status-neutral, such differences are impermissible. Similarly, if the focus of attention is the family home, it seems a little odd to take all contributions into account, even those who have no connection with the home. Ultimately, it seems that the scheme is rejected not because it gives the cohabitant too little but because it gives the adult son too much. Under the approach outlined it is not possible to give the son less, or the

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cohabitant more, without explicitly taking their status into account – something that cannot be achieved within the confines of property law.

Conclusion The big question is: what happens next? Is the Government likely to address the issue? And if so, how? It is clear that the one-size-fits-all approach is unworkable, but this should not preclude the search for reforms that mean justice for all. The Law Society has put forward its own proposals relating to cohabitants and two Bills dealing with the registration of same-sex relationships have been before Parliament this year. Perhaps a combination of reforms would achieve a satisfactory result – an opt-in scheme for those who wanted a status, protection of those within certain other relationships, and reform of property law for the benefit of those outside such relationships. But perhaps that is a little too much to hope for....