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Living together? Make sure you know your legal status
15 November 2011
Many people will have heard about the recent landmark case of Jones v Kernott but not realised its huge importance for any couple living together.
Very many cohabiting couples are blissfully unaware that they can, and should, sign up to a Living Together Agreement to protect their interest in a property and provide for the circumstances in the event of a relationship breakdown. So many people pass through our doors under the mistaken belief that by living together, they become “common law” husband and wife (in fact there is no such legal status) and their interest in the property is therefore protected. They couldn’t be more wrong.
Jones v Kernott was a property dispute between a couple who bought a house in joint names in 1985 but separated in 1993, with Ms Jones assuming sole responsibility for the mortgage and household expenses. Nearly twenty years later, Mr Kernott decided he wanted half the value of the £245,000 property, even though he’d made neither a mortgage payment nor any financial contribution after their separation.
The County Court ruled that Ms Jones should get 90 per cent of the value of the house and Mr Kernott 10 per cent, a decision upheld by the High Court. Mr Kernott took the case to the Court of Appeal, which overturned the lower Court’s ruling and declared that Mr Kernott was entitled to half the value of the house because they owned the house in equal shares when they separated and neither had done anything to change the situation since.
Now the Supreme Court has restored the County Court Judgement holding that where it is not possible by direct evidence or inference to ascertain the parties’ intentions, the Court can consider what is fair. The Court had to declare the parties’ shares in the property because the couple themselves had not expressed them either at the time of purchase or subsequently.
The only way to ensure that property is held as you intend is to make sure you enter into an express declaration of trust in a Living Together Agreement, which can be entered into when you buy a property or even afterwards. And just as you should review your Will on a regular basis, you should review your Living Together Agreement in the same way – circumstances often change over the years.
And it’s not just cohabitants who should be wary. Lots of people are entering into different living arrangements, with parents, grandparents, siblings and friends teaming up to buy properties together without thinking of the possible consequences.
Even if you are the sole owner of a property, you need to be aware of the law and the possibility that someone with whom you have shared a home and then fallen out with may be able to make a claim to some of your equity.
And remember, if you’re living together, unmarried and haven’t made a Will, your estate will pass to your closest blood relative – not your partner.
Living Together Agreements aren’t necessarily expensive either - our Living Together Packs start at only £75 plus VAT and we offer an initial free consultation. Take advantage of this and come and see us if:
• You are buying a property with a partner
• You are buying a property with a friend or family member
• You already own a property and your partner is moving in
• You are already living together but want to formalise your arrangements or protect your equity
• Your circumstances have changed since you purchased the property which may mean that there needs to be a change in your shares
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