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What happens when living together doesn’t work? A cautionary tale for unmarried cohabitees

When the Judge allowed Mr Kernott, the ex partner of Miss Jones, to claim 50% of the value of their jointly-owned house, despite having left the home 17 years previously and paying no part of the mortgage in that time, the judgment caused an uproar.

Previously, Judges would assess the whole course of dealings between the parties, including looking at what the parties had discussed, and expressly agreed, but also their actions and behaviour in relation to the property. The outcome of Kernott v Jones represents a fundamental shift in the way that Judges might now apportion shares of properties for unmarried cohabities, following a relationship breakdown.

The details…

The couple had bought the house in joint names in 1985 and lived there until their separation in 1993. It was not until 2006 that Mr Kernott demanded his half share.

The question before the Court of Appeal was whether either party had shown, by their actions, an intention to vary the size of their beneficial share of the property since their separation.

The two previous decisions made in the lower courts had both found in favour of Miss Jones, awarding her a 90% share of the value of the house. The Judges felt Mr Kernott's abandonment of the house, along with his non-payment of mortgage instalments or maintenance, had shown his intention to reduce his right to a share of the property.

However, the Court of Appeal decided 2:1 in favour of Mr Kernott, finding no evidence that the parties had intended to change their beneficial shares to anything other than 50:50. It had been agreed by both parties that they owned the property equally when they separated in 1993 and they had not talked about the division of the proceeds of sale in the following years. The lack of communication had demonstrated that there had been no agreement between the parties to alter their respective shares and it was therefore wrong to imply any from the surrounding circumstances. Trying to do so would also lead to a long and expensive exercise for the courts

In conclusion…

This decision was described in the judgement as being a 'cautionary tale' to unmarried cohabiting couples. It stated that an injustice could be done if they did not think ahead to contemplate what would happen to their jointly owned assets in the event of a separation.

The dissenting Judge in the case criticised the outcome stating that in practice, couples in their honeymoon period would not consider the purchase of property in the same way as a commercial contract and similar injustices would no doubt occur in the future.

If you have been affected by any of the issues raised, or are about to purchase a house with your partner and wish to discuss your options, please contactmartin.keegan@wards.uk.com.

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