For co-habiting couples, who jointly own property, the recent case of Kernott and Jones is a cautionary tale. So said a Judge in deciding that Mr Kernott still owned 50% of the property, even though he had moved out 17 years previously, without making any further contributions to the property or the mortgage.
In 1985 Ms Jones and Mr Kernott bought a property in joint names for £30,000. Ms Jones paid the deposit of £6000, and the balance was raised by a mortgage. They had two children together and separated in 1993. Mr Kernott left the property, leaving Ms Jones with sole responsibility for all the outgoings on the property, including the mortgage, maintenance and repairs and funding the upbringing of their children. It was agreed that at the time of the purchase, and when they separated, they had an equal share in the property. However, previous court judgments had decided that, because of Ms Jones’ financial contributions after the separation, her interest in the property had shifted to 90% in her favour and 10% for Mr Kernott. He took the case to the Court of Appeal which decided that, whatever had happened after the separation, they still shared the property equally. The property now has a value of £245,000.
Had the couple been married, the court would have had wider powers, in divorce proceedings, to divide the property interests to produce a fair outcome.
In contrast, for co-habiting couples, strict rules of ownership apply and if the property is held in joint names, it will be assumed that the property is owned jointly even if, as in this case, one party’s contributions were much greater than the other.
There is a strong case for the current law to be changed for co-habiting couples, but until that happens, and there is no likelihood of it being any time soon, anyone living together should seek legal advice on how to protect their interests.
Taking proper advice and acting on it can save a great deal of heartache and possible unfairness later on. A specialist solicitor can draw up binding agreements to set out a couple’s financial responsibilities to each other and their shares in joint property.