Resolving property shares

We lived together, but are now separating. How will our property shares be resolved?

The head of our family law team analyses the way in which the family courts now determine property disputes between couples who lived together, and were not married, when their relationship breaks down.

At the end of 2011, the Supreme Court decision of Kernott and Jones established that even though on paper a jointly owned property was owned 50:50, it is possible for one of the co-owners to be stated to have just a 10% share.

Why is this? The court are clear that it will consider all the circumstances and evidence, and it can now decide that the evidence points to a conclusion that it was not the intent of the owners to own the property equally, or that at a later time it ceased to be the common intent to share equally. In fact, this can leave the couple with uncertainty of possible outcome, and it is clear that the history needs to be reviewed carefully.

When you look at the specific facts of Kernott and Jones, it is important to note that these considerations only apply where the property is held in joint legal names, and also the case only applies where there is no other document in existence which sets out the defined shares in the property.

Mrs. Jones had put in a £6,000 deposit to the £30,000 purchase price, in 1985, and they lived in the property, sharing the mortgage and maintenance and upkeep costs up until 1993, when he left Mrs. Jones. She remained living in the property for another 14 years, and she met all the mortgage and property maintenance herself. Over those years, the property increased significantly, to £245,000 by the time of the court hearing. Mrs. Jones argued said that his lack of contribution over the many years proved that their common intention, of equal shares, had changed.

The court agreed with this view, and said that once it is established that the presumption of equal shares has been displaced, then the court can infer what was intended by them, as fair and reasonable people, and he got 10%.

So whilst a starting point for a house purchased in joint names is that the property is owned equally, evidence can show that their common intention was in fact different, whether at the time of purchase of the property, or later. The court will look at the financial contribution that each has made, but it will also look at the conduct and dealings of both of them during ownership.

In the situation where a co-owner has agreed to a property being retained after separation, for the benefit of the children while they remain at school, then it may be best to record your intentions in respect of the property share, and the arrangements for upkeep and the mortgage until the eventual sale, and not merely leave things to the passage of time, assuming that your share will remain an equal share, as Mr. Kernott did to his cost.

Please contact our specialist family law team, to discuss this issue, or any other issue of family law or relationship breakdown.

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