Towards the end of September it was announced by the coalition government that they would not be proceeding with proposed reforms of cohabitation law.
The Law Commission had in its 2007 report “Cohabitation: The Financial Consequences of Relationship Breakdown” recommended that financial remedies should be available to cohabitants on separation and provided certain eligibility criteria were met.
At the moment couples who are separating after a period of cohabitation and those entering into cohabitation do not have the same rights in law as those couples who have married or entered into a civil partnership.
“There is a stark contrast in dealing with a Divorce or Civil Partnership Dissolution and a relationship breakdown where the parties simply cohabited” says Senior Partner Valerie Wormald. “It is estimated that approximately 4 million couples do not marry or enter into a civil partnership and these are the couples most at risk. Cohabiting couples have to rely on very complex areas of land law if a dispute arises in relation to property. Such a process can take a long time to resolve, increase tension between the parties and their children and can be very expensive”.
Many family law practitioners have welcomed the judgment of Kernott v Jones which was handed down by the Supreme Court yesterday as it goes some way to clarifying the legal position.
The case concerned the rights of Leonard Kernott and Patricia Jones and their entitlement to a £245,000 Essex house they bought for £30,000 in 1985. Since the pair separated in 1993, Ms Jones has lived with their two children at the property and paid the mortgage independently.
The county court and High Court have both previously agreed that Mr Kernott was entitled to just 10 per cent of value of the property on the basis of the couple’s financial arrangements during the time they were apart. However, the ruling was then overturned by the Court of Appeal, which ordered a 50/50 share on the basis of the original agreement.
Today, around 18 years after they split and following months of deliberation on the issue, judges at the Supreme Court have ruled that 10 per cent is a fair share for Mr Kernott.
“Couples purchasing property together need to be aware that they are at risk by not indicating their clear intentions at the outset or upon Separation. By simply purchasing a property in joint names does not mean they are automatically entitled to a 50/50 division” says Partner Gemma Iceton.
“This case shows that the Court have the power to adjust the shares of the property in the absence of a document indicating the parties clear intentions. It is never to late for cohabiting couples or couples who are separating to have their intentions drawn up into a legal document known as a Declaration of Trust and in addition it would be advisable to consider a Cohabitation Agreement or a Separation Agreement. This will give greater certainty for both parties and although not very romantic it is well worth it!”
Valerie Wormald goes onto explain “By taking these simple precautions, a bit like making a will, the couple is going to save thousands of pounds in legal fees and a bitter litigation proceedings that can take many years to resolve. It is anticipated that the Government will not change its mind on reforming this area and therefore it is essential that couples in this situation do everything they can to safeguard themselves”.
Valerie Wormald is a Collaborative and Family Lawyer who specialises in resolving family disputes by negotiation. Read more about collaborative law http://www.carrandcosolicitors.com/services/family-law/collaborative-law/
Gemma Iceton specialises in Family Law and Cohabitant disputes.
Contact the family law department today for an appointment today on 0191 2840363.