Property rights for cohabiting couples

Today judgment was given in the case of Jones -v- McKernott which concerned an ordinary unmarried couple with an ordinary asset: a jointly owned property in Essex worth £245,000. The couple met in 1981 and had two children together. In 1985 they purchased a house in their joint names. In 1993 the couple split and Mr Kernott moved out leaving Ms Jones property with both children. He paid very little for the children, and nothing towards the property outgoings or its improvement. In 1996 Mr Kernott bought his own house. In 2006 Mr Kernott decided to claim a beneficial share in the property.

It was agreed by the parties that at the date of separation in 1993, the beneficial interests in the property mirrored the joint legal ownership: 50:50. The court had to decide whether the couples’ intentions changed when they split. Both the county court and the High Court said that, looking at the whole course of conduct of the parties, their intentions must have changed and consequently Mr Kernott no longer intended to own half the property.

Although the Court of Appeal disagreed, today the Supreme Court ruled unanimously that the court will impute an intention to the parties if the circumstances dictate that is fair. The split of 90:10 in favour of Ms Jones originally imposed by the county court was “a fair one”.

A presumption of joint beneficial ownership will arise where parties are purchasing a property in joint names. It appears that presumption may now be rebutted if on analyzing the respective contributions to the property over long periods of cohabitation, there is evidence that it was not, or ceased to be, the common intention of the parties to hold the property jointly.

Although today’s decision took steps to address the ingrained inequalities in cohabitation law, it is feared it may have done so at the cost of certainty and could therefore lead to more protracted legal disputes between cohabiting couples. The case highlights the importance of non-married couples putting pen to paper to record their intentions as to how their jointly owned property is held which can be done in a simple deed of trust.

For more information contact the family department at Stevens & Bolton on 01483 302264 or by email to mail@stevens-bolton.com

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