Cohabiting couples need to address property issues as new landmark case shows the limits of legal protection

FAMILY Lawyer Neil Grunfeld is urging cohabiting couples to address their property and financial affairs in the light of a landmark case being heard in The Supreme Court.

The head of family law at Manchester based Howards Solicitors is warning couples to avoid possible financial and emotional distress by considering Declarations of Trust and cohabitation agreements.

The saga of the Kernott v Jones case is raising the issue of how little protection cohabiting couples currently possess.

The case focuses on the claims of Mr Kernott who is claiming 50% equity, from his ex-partner in the home Ms Jones lives in although he left it in 1993 and has not contributed to its mortgage or upkeep since.
The case, first heard in 2008, ended with Ms Jones being awarded 90 per cent equity in the house, Mr Kernott 10 per cent. The decision was upheld by the High Court in 2009.

However it was overturned on a majority by three appeal court judges in 2010. The Supreme Court is expected to make a ruling within weeks.

If the Supreme Court upholds the Court of Appeal’s decision that joint ownership means a 50/50 split, it will end judges attempting to introduce some element of interpretation in such cases.

With The Government Actuary Department predicting that the number of cohabiting couples in the UK will double to nearly four million by 2031, this type of case could become more common until the law is revised.
Neil Grunfeld head of family law at Howards Solicitors comments: “Many cohabiting couples believe they are protected in law. It is a dangerous assumption.”

“They believe after a few years of living together they become common law husband and wife with the same rights as married couples. In fact, cohabiting couples hardly have any of the same rights as married couples or civil partners.”

Grunfeld advocates using Declaration of Trust (trust deeds), to avoid possible costly and lengthy litigation concerning property.

A Declaration of Trust makes it clear how much of the property is owned by whom, the level of contributions made and responsibility for future obligations such as insurance, repairs and the mortgage.

Cohabiting agreements can also be useful for property and other financial issues, Grunfeld believes, but must be drawn up carefully to increase their acceptance by the courts.

Neil Grunfeld concludes: “Ms Jones has a borrowed £22,000 to date to finance her legal fight and, after three years of legal proceedings, is still in danger of losing her property. It is a situation that could have been avoided.”