The Supreme Court has allowed the appeal by a former cohabitee that she should get 90% of the former couple's home.

The principles to be applied in future cohab disputes where there is no express declaration of beneficial interests are that where property is held in joint names the starting point will be that equity will follow the law so that joint tenants receive equal shares.

This starting point can displaced if there is evidence showing a different intention when the property was purchased or the common intention was later formed that their shares would be changed.

In the recent case of Jones & Kernott it was found that the beneficial interest "crystallised" at the point in time when they put their property on the market and when it did not sell they encashed the joint life savings policy to provide Mr Kernott with enough to put down a deposit on a house of his own.

The property had failed to sell in 1995 for £69,995, Mr Kernott' share disregarding the mortgage would have been about £30,000 or £35,000. That sum divided by the value of the property at the date of trial in 2008, £245,000, was approximately 10%.

Cohabitees have always been able to finalise the terms on which they own the beneficial interest in a jointly owned property by entering into a declaration of trust. The document will generally be accepted as proof of the cohabitees common intention. In practice, however few cohabitees enter into Declarations of Trust or even seek legal advice at the outset of a relationship.

The difficulty is that a cold calculation about how to deal with differing financial contributions in the future is usually the last thing that a happy couple wants to contemplate when buying their home. If they fail to do so, however the trauma of a broken relationship may be compounded by the difficulties faced in trying to get a fair share of the beneficial interest in the jointly owned property.

If you require any further advice or assistance please contact Ros Plumb or a member of the Litigation team at Wortley Byers on 01277 268368 or rplumb@wortleybyers.co.uk.

<< Return to News page