Buy together now and forever be prepared
The number of couples buying property together, without marrying or planning to marry, is increasing each year. Consequently, the number of cases involving disputes over how properties are owned and subsequently shared is also on the rise.
A jointly-owned property, regardless of if the parties have cohabited for a long time or not, is not treated in the same was a matrimonial home in divorce. There is often a misconception that once a period of time has passed a couple becomes 'common law' husband and wife, which is incorrect and has no legal meaning whatsoever. The legislation that applies is the Trust of Land and Appointment of Trustees Act 19 (and the Children Act 1989 if the couple have had a child together who is under 18).
In 2011 guidance was given to lawyers to assist with such disputes, in the case of Jones and Kernott. The aim of the Judges in the Supreme Court was to give a summary of the law and how it should be applied, after years of varying outcomes and discussions relating to disputes of ownership of jointly held property. The Judges' summary was that:
- the starting point on how the property should be shared is that it should follow how the property is owned, ie how it has been registered at the Land Registry
- this starting point can be displaced by evidence that the parties had a different intention when they acquired the home or that they later changed their intentions
- the common intention must be deduced objectively from their conduct
- where is clear that the parties had a different intention, or changed their intentions later, but it is impossible to ascertain what actual shares were intended, the outcome should be what is fair, having looked at the whole course of dealing between the couple in relation to the property.
What does this mean in practice?
If you have legally outlined and defined the ownership of your property to specifically confirm who owns what share, but then go on to act or do things that show your intention has changed (or was actually different at the start) you are at risk of the Court coming to a conclusion that it thinks is fair based on how you have both dealt with the property during its ownership. The best way to ensure protection is to take advice when you buy a property together and have a declaration of trust outlining the ownership of the property, and preferably a living-together agreement to support this, which can be reviewed and updated throughout the ownership to prevent problems occurring at a later date.
Family lawyers continue to press for reform in this area of family law, to protect cohabitants on separation and raise the profile of this issue so that public awareness is improved of the pitfalls of joint ownership and cohabitation.
If you have any questions about shared ownership please contact our Residential Property team.