Crunch decisions for cohabitees

Release date: 12/7/2010

The recent case of Kernott v Jones has highlighted the need for cohabitees to clarify their intentions at the outset of their relationship and particularly when jointly buying property.

The judge referred to the case as "a cautionary tale", which all unmarried couples contemplating buying a home should consider.

In this case, the cohabitees bought a house in joint names as joint tenants, which meant that they held the property on trust for each other in equal shares. But when the relationship ended, the man moved out and bought another property in his sole name, for which he was solely responsible. The woman continued to live in the jointly-owned property with their children and was solely responsible for it.

Following a 12-year separation, the man severed the joint tenancy so that they no longer held the property on trust for each other, but still had equal shares, before claiming his half share of the property.

When the matter initially came before the court, the judge altered the shares in the property to 90 per cent to the woman and ten per cent to the man, on the basis of what was "fair and just", taking into account their respective financial contributions and in particular the fact that following separation the woman had paid the mortgage and received virtually no financial contribution for their children's maintenance and support.

But on appeal, the court followed the principles laid down in the decision of an earlier case Stack v Dowden, more rigidly. The court found that there was no evidence to change the presumption of equal shares and therefore the man was entitled to his half share of the property.

The case again highlights the importance of cohabitees entering into an express agreement as to their shares in the property they own or jointly purchase - rather than finding themselves in court fighting a convoluted dispute many years later. It also emphasises the importance of entering into a Living Together or Cohabitation Agreement at the beginning of a relationship to clarify how assets are held and be divided if the relationship ends.

If you would like information on living together/cohabitation agreements, please contact Sonia Bachu on sonia.bachu@harveyingram.com or call 0116 257 6148.