the decision of the Supreme
Court in Jones v Kernott
The Supreme Court, the highest Court in England, handed down
its long awaited decision on this matter on 9 November
2011. Its impact on cases of disputes between cohabiting
couples who separate on what shares they have in jointly owned
property is indeed far-reaching.
In summary, the Judges' unanimous decision was
in relation to a couple who had bought a property together and
lived there together for eight years. One of them then moved out
and from then on made no real financial contribution to the upkeep
of the property, for example by helping to pay the mortgage, and
was therefore able to buy another property. The Judges regarded
this as representing a fundamental change in how the couple
intended they would each hold their shares in the house and that
consequently, for the party who moved out, their share would be
diminished from 50% to 10% of the current value of the house.
Although there was a decision made in 2007 by
the then House of Lords in another similar case involving property
owned by two people living together, it was still felt that there
was ongoing confusion on this area of law that was potentially
likely to affect an ever increasing number of people given the fact
that more and more couples are choosing not to get married.
The Judges of the Supreme Court sought to give
clearer guidance on the issues and have helpfully set out the
following principles to be followed in similar cases in the
future:
- Where a couple buy a family home together and
the title is held in their joint names, the starting point will be
that they own the property as 'joint tenants in law and equity', ie
effectively that their shares in the property are equal.
- However, this presumed starting point can be
overturned if there is evidence that can show that what the couple
intended was something different either at the time they bought the
house, or at a later stage for example when one of them moved
out.
- What the couple's intentions are should be
worked out from the way in which they have acted and dealt with
each other.
- In a situation where the couple had different
intentions from each other at the time when they bought the
property, or where their original intentions changed, and it is not
possible to infer an actual intention about what their shares are,
the court will be entitled to decide what would be regarded as a
fair share for each of them, taking account of the ways the couple
acted towards each other in relation to the house.
- Each case is fact-specific and whilst
financial contributions (such as paying the mortgage) are relevant,
the court will also look at many other factors to help decide how
to apportion the shares.
These principles set out very helpful
guidelines for resolving disputes between unmarried partners in
relation to property that is held in their joint names.
At Blake Lapthorn, the advice of the firm's
Family law team to
unmarried couples buying a house together is to try and take steps
to avoid such disputes occurring in the first place. This means
that they need to talk to the solicitor who is dealing with the
purchase for them and make it clear how the title to the house
should be held and what shares they are each to have in the
property. This is then clear evidence of what their intentions are
at the outset and will offer protection, for example, in the
scenario of one party making a much greater cash contribution
towards the purchase than the other.
Again in the event of separation, it is always
sensible, wherever possible, to put something in writing as to what
is intended for the future.
The good news with the decision of the Supreme
Court is that at least there are now clear cut guidelines on how
disputes should be resolved, should they occur.
It must be remembered that the decision in
Jones v Kernott does not apply to cases where the couple
are married or to the situation where only one of an unmarried
couple's name appears on the title deeds.
The Family law team at Blake Lapthorn is always
happy to give advice to unmarried couples at the start of their
relationship as to how best to proceed, or at a time when a
relationship breaks down. The team can offer both mediation
and Collaborative Law as alternative ways to
resolve disputes as well as the more traditional routes of
litigation.
