November 11, 2011

How cohabitees can spot property perils

For the million-plus unmarried couples living together in England and Wales, this week has seen a landmark decision that could affect them all.

Somewhat controversially, the Supreme Court upheld the decision of County Court and overturned the Court of Appeal in the Kernott and Jones cohabitation case. This has left an absent father with just ten per cent of the value of the home he left 18 years ago, rather than the 50 per cent interest which the Court of Appeal declared he held.

No longer will unmarried couples be able to shelter behind the strict legal dictate of conveyancing documents when they purchase a home together. Following the decision of the Supreme Court, a court may now infer a change arising out of a couple’s behaviour and may where appropriate alter the share of assets.

Leonard Kernott and Patricia Jones lived together but never married, buying a house in joint names in 1985 and having two children. When the couple split up and Mr Kernott left the house in 1993, Ms Jones continued to meet the mortgage and other payments without any further contribution from her former partner.

The final chapter in this saga began in 2008 when, notwithstanding the change in financial arrangements, Mr Kernott sought to protect his original 50 per cent interest in the property, now worth nearly £250,000.  This, prompted Ms Jones to issue proceedings seeking an increased share which might better reflect the overall contributions which the parties had made. The district judge decided that the interests of the parties had changed when Kernott left and awarded 90 per cent of the property’s value to Ms Jones – a decision upheld by the High Court, overturned by the Court of Appeal, and finally reinstated by the Supreme Court.

This case highlights the devastating confusion that can arise when cohabiting couples separate. Whilst marriage splits are covered by detailed legislation and case law, the government stubbornly refuses to offer any similar protection to cohabitants.

Here at Jones Myers LLP we are campaigning for legislation to be introduced and it seems that even the Supreme Court judges may agree with our standpoint. Lord Wilson, one of the justices who considered the Kernott v Jones case, referred in his written judgement to the “continued failure of Parliament to confer upon the courts limited redistributive powers…upon the breakdown of a non-marital relationship.”

A glimmer of light? We certainly hope so – as we’re sure cohabitees across England and Wales will agree, a change is long overdue.