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Fri 11 Nov 2011

Key decision on unmarried couples property rights

Key decision on unmarried couples property rights

It is believed that there are over 2 million cohabiting couples in England and Wales, many of whom still believe in the myth of the common law marriage. It is completely wrong for unmarried couples to assume that they have the same kind of protection as if they were married.

The Supreme Court heard a case which may have a dramatic impact on the property rights of unmarried couples who separate. The case involves Patricia Jones who is challenging the Court of Appeal Decision which gave her ex partner, Leonard Kernott, an equal share of a home they owned. This was a bungalow located in Essex purchased by the couple in joint names but, after separating, Ms Jones paid the mortgage for 13 years. The couple started their relationship in 1980 and 5 years later Ms Jones put down capital for the bungalow, the couple never married but had 2 children. For 8 years they shared the mortgage until Mr Kernott left and purchased another property.  Ms Jones, through her lawyers, argued that as she stayed in the bungalow for a further 13 years paying off the mortgage and covering outgoings as well as endowment policy premiums, she should receive a much greater share than Mr Kernott. She had not even received any child maintenance following the separation.

The couple’s dispute had come to a head in 2006 when Mr Kernott demanded his share of the property. First, a Court ruled that he was entitled to 10% to Ms Jones’ 90%. The Court of Appeal however said that despite their unequal contributions, he was entitled to half because the property was jointly owned.

If the couple had been married, a Divorce Court would have been able to override their property interest to do what was fair and look at contributions. Unmarried couples are in a different position and therefore the Court was restricted to applying strict legal principles. Joint ownership meant the property was shared equally.

The Supreme Court ruled on 9th November 2011 that the County Court decision was right, that Mr Kernott was entitled to 10% share of the property and Ms Jones the remaining 90%.  The Court laid down that as a starting point where a family home is purchased in joint names the parties own the property equally.  That presumption can be challenged if evidence is given that the parties' common intention was different.  That may arise either when the property was purchased or later when the parties formed the common intention that their shares would change.  The Court can look at the parties' conduct and dealings to determine what their common intention is.  Each case turns on its facts.  Financial contributions are relevant but many other factors will be taken into account by a Court to decide what shares are intended or fair.

In view of this decision, it is essential that unmarried couples protect their interests by deciding when they make a purchase how much of the home each owns in a Declaration of Trust.  That would reduce the chance of a dispute arising.  Unmarried couples should also obtain legal advice before they purchase a property together and it may be advisable to also have a Cohabitation Agreement in place to govern the relations between the parties.

For further assistance please contact Keith Maynard:

t: 020 7644 7278

f: 020 7625 7309



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