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Landmark case has implications for couples 'living together'

17 November 2011

Landmark legal case has far-reaching implications for couples 'living together'

People who are buying a property with someone else, or allowing them to move into their property, should enter in a declaration of trust or a cohabitation agreement so that their intentions are clear.

In addition, if couples subsequently separate, they should seek legal advice at an early stage and confirm their intentions with regard to the future ownership of the property especially if the property is not going to be sold immediately or transferred to the other owner.

That’s the urgent advice from leading south east law firm Furley Page following a landmark House of Lords decision in the case of Kernott v. Jones.

It’s estimated that more than two million couples live together in the UK and Anne Blenkinsop, a partner in the firm’s family law team, says the decision potentially affects every unmarried cohabiting couple in England and Wales.

Anne said: “Mr Kernott and Ms Jones, who were not married, jointly bought a property in 1985. Mr Kernott left the relationship 18 years ago. Ms Jones paid the mortgage and the outgoings following their split but the house remained in joint names. On the face of it Mr Kernott was entitled to 50% of the current value of the property as joint owner. Unsurprisingly, Ms Jones argued that her much greater contributions since separation should give her a bigger share.

“A district judge had awarded Ms Jones 90% of the equity in the house but the Court of Appeal ruled the proceeds should be split 50 / 50. Now the highest court in the land has decided that Mr Kernott’s share should be cut to just 10%.

“The House of Lords has decided that the court can look at the entirety of their relationship, rather than simply the property rights that the couple agree upon when they buy the property. In essence this means that the court will approach property disputes between unmarried couples in a way that is more discretionary and closer to the court’s approach on divorce.

“Apart from blurring, still further, the legal distinction between marriage and cohabitation, the effect of the decision is to make the law in relation to this area much less certain,” says Anne.

She said that legal advisors will find it much more difficult to tell their clients what they can expect to get in the event of an application to the court if the court will not automatically uphold the division that they agreed when they bought the property.

Anne says: “It remains to be seen whether the test of fairness that the court will apply in this area will be similar to the principles applied in divorce or an entirely new concept.

“Whatever one thinks of the rights and wrongs of the decision, more legal uncertainty can only give rise to more litigation in the courts. The sooner Parliament legislates either to make the rights of cohabitants the same as those of married couples or to provide clarity as to how they differ, the better it will be, not only for legal advisors but also for their poor confused clients.

“In the meantime, if you are buying a property with someone else, or allowing them to move into your property, you should enter in a declaration of trust or a cohabitation agreement. If you later separate from your partner you should seek legal advice at an early stage so that your intentions are made completely clear and not open to challenge at a later date if the property is not immediately sold or transferred to the other co-owner,” she adds.

For further information, call Anne Blenkinsop on 01227 763939.


Notes to editors


Anne Blenkinsop

Anne has more than 20 years of experience in dealing with all aspects of relationship breakdown. She advises on all areas of divorce and the financial issues arising from the breakdown of a marriage. She has a particular interest in resolving financial disputes between cohabiting couples (including same sex couples) and is developing a niche practice in this field to include applications on behalf of the children of unmarried couples for financial provision.

Anne is a collaboratively-trained lawyer – the collaborative family law process is a relatively new way of dealing with family disputes. Each person appoints their own lawyer but instead of conducting negotiations between you and your partner by letter or phone you meet together to work things out face to face. Each party will have their lawyer by their side throughout the entire process and therefore you will benefit from legal advice as you go. The aim of collaborative law is to resolve family disputes without going to court.

 

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