No, it’s not a bad joke – the hot off the press judgment (from 9th November 2011) from the Supreme Court in the case of Kernott v Jones means that the answer may be, umm, we’re not sure...
There has been so much debate about the vast differences in the law as it applies to couples who live together rather than get married, and this case is the latest development in a long line of cases where some of the most senior judges in the land have expressed very different views about how property should be divided when cohabiting couples split up.
In this case the couple had bought a house in joint names, with Ms Jones paying the £6,000 deposit. Mr Kernott later improved the property by paying for a £10,000 extension. They separated in 1993 and Ms Jones stayed living in the property with their children and paid the mortgage and outgoings alone.
Mr Kernott did not try to release his share of the property until 2007, some 14 years after the separation.
The lower courts indicated they would change the way the equity was owned to give Mrs Jones 90% and Mr Kernott only 10%, to reflect her contributions.
The Court of Appeal disagreed – and made it very plain that a court had to look at what the parties intended. The property had been bought in joint names, with no suggestion that either owned more than the other. There was no evidence, according to the Court of Appeal, that Mr Kernott and Ms Jones had intended to change the way they owned the equity – so it was not for the court to suggest that they had. Mr Kernott would have his 50%.
Now the Supreme Court have overturned that decision, and have gone back to the lower courts’ ruling that Mr Kernott can have 10% only.
We have yet to receive the full judges’ reasons but it appears that the Supreme Court have reinforced the idea that a court can and “should not be reluctant to” find that what was originally intended when a property was bought may have changed over time.
This is a hugely complicated area of law. The starting point however is still to look at how the property was originally intended to be owned (and what the deeds say about this). We family lawyers now have to review any cases we have where cohabiting couples are separating, and look again at the details and facts of each case as this decision may completely change the advice we have already given.
Some ideas you really should think about when you are buying a property together or splitting up:-
- Make sure you understand the different ways the property can be owned. Basically you can agree to own it equally (i.e 50% each) or you can agree to own it in different shares – perhaps if one person is providing the deposit or will pay the mortgage alone.
- If you do want to own it differently to 50-50 make sure you have a trust deed drawn up by a lawyer to reflect this.
- In all cases get some family law advice, not just conveyancing advice, when you are considering buying a home together or moving in together in a home that one of you owns.
- It may be wise to have a living together agreement prepared as the clearest evidence possible of what you both intend to happen.
- If you are separating – make sure you get advice promptly – don’t leave it for years and years as this may make a difference to what a court could say later about how much of the equity you own, just ask Mr Kernott.
- Even if you manage to agree who is going to have what, get some advice about having a separation agreement drawn up – this will help to protect you from future claims.
And if you’re a cohabiting couple confused by all of this, you’re not alone. As family lawyers we’ll have to study the detail of the Supreme Court’s judgement to try and understand how future cases are impacted. Watch this space.
Family lawyer Northampton