Supreme Court rules on dispute over property jointly owned by unmarried couple

9th November 2011

Today the Supreme Court handed down its long-awaited judgment in the case of Jones -v- Kernott - a case concerning the beneficial interests in a property owned jointly by an unmarried couple. The decision has shed light on the approach to take when attempting to resolve disputes relating to property following the breakdown of a cohabiting relationship.

The Supreme Court reaffirmed the principle that the starting point is the presumption that "equity follows the law" so that if the legal title is held jointly, the beneficial ownership is also joint and equal in the absence of an express agreement stating otherwise. The Supreme Court also made clear that it may be possible to displace this presumption of equality (1) if it can be shown when considering the conduct, actions and words of the couple that their intention was not to share the beneficial ownership equally at the time of the purchase or (2) if their common intention as to how they would deal with the beneficial ownership of the property later changed. In these circumstances the court will seek direct evidence of the intention or could infer what the intention was. The court can also consider what is fair when considering the whole course of dealing in relation to the property. The facts of each case will be important and the court could look at other factors in addition to financial contributions.

Esther Edmondson, Family Law Solicitor at Gateley (Manchester) LLP - "this decision has gone some way to assist those dealing with the beneficial ownership of their jointly owned property following the breakdown of a cohabiting relationship. It is important to remember that each case will turn on its own facts and preparation in such a dispute is likely to involve detailed evidence of what was said by whom and when. Documentation in support will be critical. The court also addressed the issue of property that is owned in one party's name where the other party is claiming an interest in that property.

It is advisable to set out the beneficial ownership when purchasing the home to try and prevent future disputes. The Transfer Deed assists with this. Other cases require a Declaration of Trust. Where there is no express written declaration setting out beneficial interest and one party seeks a share greater than 50% of the net equity in a jointly owned property upon the breakdown of the cohabiting relationship it is important to seek legal advice. It is also important to remember what, if any, financial claims may be available to any children of the family. This is a complex area of the law and advice should be taken at the earliest opportunity."