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Living Together? Is your position protected?

A previous article of mine considered the case of Kernott and Jones. That case concerned two parties who had separated but who had previously lived together with their children as cohabitees and who owned a home together jointly.

At the time they separated they both acknowledged that they had an equal entitlement to the value of the home. Ms Jones remained in the home with the children and Mr Kernott left and eventually purchased another house for himself. Mr Kernott made no particular financial contribution to the jointly owned home after he left. Ms Jones paid the mortgage, the usual outgoings, all insurances and maintained the property at her own expense.

The question for the court was should their entitlement after several years living apart remain equal or should Ms Jones “investment” in the home mean that she should now be entitled to a greater share of the value of the home.

When I wrote the last article the Court of Appeal had ruled on Mr Kernott’s appeal that there was no evidence of a common intention between the couple to vary the shares each had held in the property at the time of separation. The court therefore ruled that their shares should remain at 50/50 – that all seemed fair and straightforward.

However, Ms Jones appealed to the Supreme Court who last week over ruled the Court of Appeal by stating that the original judgement right from the outset and allowed Ms Jones appeal and awarded her 90% interest in the home, leaving Mr Kernott with only 10%. Is this fair? Each case is different with unique circumstances and there seems there is now no one clear principle for cohabitees.

What should cohabitees living together and owning property take from this decision?

1. Cohabitees who purchase property should have a trust deed drawn up establishing their rights and ownership to a property (particularly if contributing different amounts of deposit or title is held in one name only) to avoid later dispute.
2. Cohabitees should take legal advice from a family lawyer at the outset of living together and should establish not only what should happen if they separate, or one party should die, but also what should happen financially during, and after, their time together.
3. There is no concept of “common law spouse” or automatic entitlement after a period of cohabitation. Rights for cohabitants are very limited indeed. If you want to be entitled to something of financial value, get advice and have it formally documented.
4. If a parent of a cohabitee has provided, or is providing, a deposit, then that third party should also take legal advice to properly protect their interest.
5. If you separate as cohabitees you should take early legal advice to establish your position vis a vis any property and take such action to protect your interests.

The law for cohabitants upon the breakdown of their relationship has been in disarray for as long as we family lawyers can remember. The case of Kernott and Jones does nothing to make the position any clearer.

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