Family law in change
Family formation has historically been tied to a church wedding, but this has been opened up more and more and today the concept of family is completely open. It is up to each one to decide who they call their family. Law is trying to keep up with this development.
Cohabitation relationships have existed for a long time and the jurisprudence surrounding these has been expanded more and more. The first law from 1973 gave only the most needy cohabitant the right to take over a tenancy or condominium for a fee. The Cohabitation Act from 2003 contains more provisions, but the main questions are still what is cohabitation property and how the cohabitation property is to be distributed when the cohabitation relationship ends.
Sambo’s right to compensation for work and investments
However, there are more issues that come to the fore when a cohabitation relationship ends. One is if a cohabitant can receive compensation for work on and investments in the other cohabitant’s private property. This must be considered a very common problem. It must be common for two people to become cohabitants by one moving into the other’s home and for the cohabitant who has moved in to help with work on and investments in the home. However, this issue is not regulated by the Cohabitation Act and the legal solution can instead be found in various property law rules and principles.
There are many different property law rules and principles that can be updated when it comes to work and investments. The goal for the cohabitant who has done the work or investment is that it should establish a right to compensation. This can be done, for example, by declaring the underlying agreement invalid or by saying that the other cohabitant has made an unauthorized profit.
Invalidity may, for example, be the result of an application of the general clause in section 36 of the Contracts Act, but also of an application of the doctrine of preconditions. In this context, the doctrine of preconditions can in short be said to mean that a legal act, for example an investment in a home, becomes invalid if a continued cohabiting relationship was an essential precondition for the legal act and the other cohabitant should have realized this.
The principle of unauthorized gain
The principle of unauthorized profit does not have as strong a position in Swedish law as in the rest of Europe, and the Supreme Court has in a court case from 1975 found that domestic work in a cohabiting relationship cannot justify claims for compensation for unauthorized profit. However, it is not excluded that other work and other investments may justify compensation claims.
On 6 February 2019, the Supreme Court issued a ruling concerning this. The circumstances were such that in 2010 a man had moved to a woman’s property and in the autumn of 2012 and the spring of 2013 made large investments in the property. He had paid invoices for an extension, a shed and the installation of a stove for a total of just under SEK 256,000. In the summer of 2013, the cohabitation relationship had ended and the man wanted compensation for his investments. The man relied on two grounds, firstly that the investment was a loan and partly that the woman had made an unauthorized profit.
With regard to the question of whether the investment was a loan or a gift, the Supreme Court states that a general view is that the person who claims that he or she has made a payment must prove this and that the person who claims that the payment constituted a gift must prove this. With this approach, the man would prove that he made the investments and the woman would prove that they constituted a gift.
However, the Supreme Court states that this approach does not fit well into a cohabiting relationship. In view of the economic community in which the cohabitant lives, the burden of proof should be entirely on the person claiming to have a claim. In this context, the Supreme Court states that the situation is not always so clear that it is a question of a loan or a gift. The close personal and financial community influences the motives. It can be assumed that it is common for a cohabitant who makes a financial contribution not to have a regular gift intention directed specifically at the other cohabitant, but rather to make the contribution in order to benefit from the investment himself and together with the cohabitant by using what the investment refers to. If the contributing partner benefits from the investment, the investment in these cases does not give a right of recovery.
With regard to the issue of unauthorized gain, the Supreme Court finds that if the contributing cohabitant does not benefit or only receives limited benefit from the investment due to the termination of the cohabitation relationship, it could be argued that the receiving cohabitant makes an unauthorized profit if he or she does not have to replace the contributing partner for the value transferred.
Property law principles should not govern
The Supreme Court finds that there are both reasons for and reasons against such an approach and overall the court finds that the reasons against are stronger. The court attaches special importance to the fact that the starting point for the cohabitation laws has been to regulate only the most necessary things and to let cohabitants otherwise regulate their transactions themselves through agreements, wills and insurance policies. According to the Supreme Court, there must be a restraint against attaching new legal consequences to the termination of the cohabitation relationship. The Supreme Court also states that such a right to compensation could create unforeseen legal and financial consequences of the termination of the cohabitation relationship, which could lead to lock-in effects. Thus, according to the Supreme Court, cohabitants must instead protect themselves by documenting work and investments and requesting agreements.
This means that cohabitants must be vigilant and not be blinded by love. It is important to be aware of the rules of cohabitation and to be aware of their legal acts and their significance. Many times it is appropriate to sign an agreement to clarify for both parties what applies, for example, when it comes to work on and investments in one partner’s property.