Cohabiting Couples Property Rights
On 9 November 2011 the Supreme Court gave guidance in a case on dividing property proceeds where couples who live together are splitting up.
Sometimes when couples live together and buy a property they say exactly how the property proceeds should be divided if they sell it.
This intention is set out in a Declaration of Trust.
It makes it clear who is to have what.
However sometimes couples don’t make their intentions clear.
What did the case say about cohabiting couples selling property?
Mr Kernott and Ms Jones bought a property as joint tenants and did not set out their intentions on purchase. Usually this means that each person owns 50% of the property.
The presumption that each person owns 50% can be overturned if the couple later formed a common intention that their shares would be different.
The court must see if there is any evidence of this.
What share of the proceeds did Mr Kernott and Ms Jones get?
The court decided that there was a common intention to have shares other than 50/50.
It looked at what would be a fair split considering what each had contributed during the period of ownership.
The court gave Ms Jones 90% and Mr Kernott 10%.
It’s best not to get to the point of needing to involve the court.