In the recent case of Jones v. Kernott the Court of Appeal has highlighted the importance for all unmarried couples contemplating the purchase of a property together of having a document drawn up that records not only the respective shares of the couple at the time of purchase but what should happen in the event of their subsequent separation. Unmarried couples do not have the same rights on separation as married couples no matter how long they have lived together and even if they have children together. They are left to property and trust law.
The issue to be decided by the court was whether the fact that one party continued to live in the property and assume sole financial responsibility for its continuing acquisition and maintenance after separation enabled the court to declare that at the date of the court hearing the couple’s shares in the property were held other than equally.
The Facts
Ms Jones and Mr Kernott began cohabiting in 1983 or 1984. They bought a property in joint names on an interest – only mortgage backed by an endowment policy. Ms Jones contributed £6,000 to the purchase price. They had two children. Mr Kernott gave Ms Jones £100 per week and she paid all the outgoings. Mr Kernott was primarily responsible for building an extension to the property which it was accepted increased the value of the property. The couple separated towards the end of 1993. Ms Jones remained in the property and assumed responsibility for payment of the outgoings on the property and for maintenance of the children. In 1996, Mr Kernott purchased another property by cashing in a joint policy by agreement with Ms Jones the proceeds of which were split equally. In 2006, more than 12 years after separation, Mr Kernott sought payment of his half share in the property.
The Decision
Previously the House of Lords in the case of Stack v. Dowden had determined that the starting point where a property is conveyed into the joint names of cohabitees, is joint beneficial ownership i.e equal shares and that the onus is upon the person seeking to show that the beneficial interest is different to from the legal ownership. A conveyance into joint names indicates both legal and beneficial joint tenancy, unless and until the contrary is proved. The burden of proof is a heavy one.
The Court of Appeal in Jones v. Kernott came to the conclusion that the passage of time was insufficient to displace the couple’s equal interests at the time of separation even though Mr Kernott had acquired alternative accommodation and Ms Jones had paid all the outgoings. This seems a very harsh decision from the perspective of Ms Jones. It illustrates the importance for unmarried couples seeking to purchase a property together of seeking proper legal advice prior to the purchase
For further information please contact the family team at Myers Lister Price on 0161 926 9969.
