There is a common misconception that there is a legal status known as "common law wife" or "common law husband". This is not true, and living together does not in itself give rise to a share of the home.
Unmarried couples and those who are not civil partners have very limited financial claims against each other on the breakdown of their relationship. For example, there is no entitlement to maintenance or pension benefits. The Court does not therefore have the power to make Orders in relation to property on the same discretionary basis that it would otherwise do in divorce or civil partnership dissolution proceedings. The Court therefore needs to look to the principles of Land and Trust Law to resolve any dispute which arises in relation to the ownership of a property.
The starting point for the Court is "who owns what?" This can be established by reviewing the Title Deeds to the property and other related documents. Where a property is held in joint names, there has previously been a presumption that unless there is a document in place saying otherwise, both parties have an equal share in the property. This is often despite one party making additional contributions to the property or costs associated with it. However, it may be time for change.
The case of Kernott –v- Jones was heard by the Supreme Court in May 2011 and family lawyers are currently awaiting the Judgment with bated breath. The issue the Supreme Court is being asked to decide is whether a parties’ interest in a property should alter if they make additional contributions despite both parties having equal shares in the property at the date of their separation.
The brief facts of the case are that in 1985 the parties purchased a property in joint names. A deposit was paid by Ms Jones and the property extension was paid for by Mr Kernott. The couple separated in 1993. Ms Jones and the couple’s two children remained in the property, and she discharged the mortgage and household expenses. In 2006, Mr Kernott claimed his 50% share in the property in accordance with the Legal Title.
The High Court initially awarded Ms Jones a 90% share, but this decision was overturned by the Court of Appeal. It is now a decision for the Supreme Court and if they decide that Ms Jones should be awarded a higher share in the property given her additional contributions, this is a fundamental change in the way that these issues have been dealt with previously.
The President of the Family Division, Lord Justice Wall, stated recently that urgent legislation is required for cohabiting couples to assist in the regulation of their financial affairs.
In the meantime, many family lawyers are simply adopting the approach of advising clients who are caught up in cohabitation disputes to "wait and see".
The decision of Kernott –v- Jones, whether ground breaking or not, will hopefully provide some guidance as to how such disputes should be resolved.
For more information on this subject please contact Rebecca Pike at Rickerbys LLP on 01242 246450 or email:
rebecca.pike@rickerbys.com.