New Case Law Affecting Cohabitants Property Rights
The long awaited Judgment in the case of Jones -v- Kernott was handed down yesterday (9th November 2011) by the Supreme Court. The law concerns cohabitants’ property rights and could have far a reaching effect with regard to couples intending to cohabit.
The case of Jones -v- Kernott concerned a couples’ entitlement to a property which they purchased in 1985. The couple separated in 1993 with Miss Jones continuing to live with the couples’ two children at the property. Miss Jones continued to pay the mortgage.
The Court of Appeal had previously stated that since the Deeds indicated the couple owned the property on a 50/50 basis then that is exactly how the property should be held and divided. However, the Supreme Court has now overturned the Court of Appeal decision and have held that Mr Kernott should only have a 10% share of the property.
The Supreme Court came to its decision on the basis that 10% was seen as a “fair” share of the property for Mr Kernott in all the circumstances of the case.
To date, the law relating to the division of property has always been very different depending on whether a couple marry or whether they simply choose to cohabit. If a couple marry and then subsequently divorce the Court has an absolute discretion under the Matrimonial Causes Act 1973 (as amended) as to how to divide up the property and indeed all the assets of the marriage and the parties. The Court in the course of the divorce, divides the assets of the marriage on the basis of what is considered reasonable in all the circumstances of the case with the welfare of any minor children of the family being paramount.
By contrast, the general rule to date with cohabiting couples has been that any property held in the sole name of either party remains with that party and any jointly owned property is split 50/50. A cohabitee to date has always had an “uphill struggle” to prove that he or she should have a greater share of the property where the Deeds say the property is held jointly and has been left to argue his/her case under the very complicated law relating to trusts. A cohabitant seeking to claim a greater percentage of a jointly owned property usually has to prove the existence of some kind of constructive, implied or resulting trust to be successful. To date, it has not been open to a cohabitant to simply suggest that splitting the property 50/50 would be “unfair”. The case of Jones -v- Kernott however suggests that it might be possible now to argue that the property of cohabiting couples should be divided on the basis of what is fair in much the same way as the property of married couples is divided under the Matrimonial Causes Act in the course of divorce.
Experts in family law however do feel that in the absence of very clear legislation from Parliament and notwithstanding the decision in Jones -v- Kernott, it is still important that couples record their intentions formally and in writing and review those arrangements in the light of any subsequent changes in their circumstances to avoid costly and expensive litigation should they choose to separate in the future.
If you require any further information regarding this or any other area of family law then please contact our family team:-
Anita Toal, telephone 01775 722261 or email firstname.lastname@example.org