The law for those living together, and not married, has been up for debate for as long as we family lawyers can remember. A recent case brought into focus the benefit of taking a moment to record the intentions of the parties particularly upon separation - was it about to become even more complex or was the law going to stay as it was?
The Court of Appeal was faced with considering an appeal which would change things for cohabitees who had owned a house jointly during the time that they were together but where one person had moved out without resolving the financial aspects of ownership.
In the case of Kernott and Jones the couple had jointly owned a home together. At the time they separated they both acknowledged that they had an equal entitlement to the value of the home. Ms Jones remained in the home with the children and Mr Kernott left and eventually purchased another house for himself. Mr Kernott made no particular financial contribution to the jointly owned home after he left. Ms Jones paid the mortgage, the usual outgoings, all insurances and maintained the property at her own expense. The question for the court was should their entitlement after several years remain equal or should Ms Jones “investment” in the home mean that she should now be entitled to a greater share of the value of the home.
At the first court hearing the Judge awarded Ms Jones 90% interest in the home, leaving Mr Kernott with only 10%. There had been no formal intention for Mr Kernott to lose part of his 50% interest but the court felt that this was a “fair and just” outcome. Unsurprisingly Mr Kernott appealed the decision.
The Court of Appeal this week allowed Mr Kernott’s appeal saying there was no evidence of a common intention between Mr Kernott and Ms Jones to vary the shares each had held in the property at the time of separation. The court ruled that their shares should remain at 50/50 ie an equal share unvaried from the date of separation.
There are some that might comment that this is unfair. Why should Ms Jones who has maintained the home since separation not be rewarded for her effort. There are others who would say that Mr Kernott should not be penalised for allowing his former cohabitee (particularly where there were children to be housed) to remain in the property and thereby having the benefit of his share in the home without payment and whilst he had paid to house himself elsewhere. Everyone will have a different view.
However what this case does highlight is the benefit of having a written agreement if couples separate and when all the financial issues are not to be addressed immediately upon separation. That agreement can record what is to happen with various assets, who is to pay what, and identify when the property is to be sold or the absent owner’s interest paid out. The agreement may not be legally binding upon any future court asked to rule on a future dispute but it will show clearly what the parties intended, and that seems to have played a big part in the Kernott and Jones case.
Jarvis Family Law LLP is available to provide advice not only to new or separating cohabitees, but on all aspects of Family Law including divorce, financial settlements and child related issues. Initial interviews can be arranged free of charge when we can provide the initial advice and overview of your situation.
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