In Jones v Kernott [2011] UKSC 53 there was again no express declaration of their beneficial interests. However the 50/50 ownership was overturned as it was found that the parties’ intentions had changed from the time that the property was purchased.
The court ruled that there would be a 90:10 division of the ownership in the property in favour of the party who was the primary child carer, even though the legal title recorded equal ownership.
In Rowland v Blades [2021] EWHC 426 the house was held as joint tenants with no express declaration of trust and despite only one party contributing all of the money to the property purchase, the court held that the parties were entitled to a 50/50 division upon their separation.
This was because the financially contributing party had been given legal advice at the point of purchase and had agreed the home would be held as joint tenants and that party was not able to resile from the intention that was agreed at purchase.
The case law relating to cohabitees and their interest in property is often evolving and the outcome of any litigation in this area is very dependent on the facts and individual circumstances of the parties.
It is therefore vitally important for unmarried couples who are purchasing a property together or choosing to live together to get good legal advice at the outset. This is so they can be absolutely clear as to their intentions for their financial shares in the property and what will happen in the event they separate, with their intentions being properly and legally documented.
A declaration of trust can be drawn up when a couple buy a property together that will reflect their legal ownership, how the purchase was funded, arrangements to sell and how the sale proceeds are to be divided, including an option to buy out the other person. This document will cover the ownership of property only.
A declaration of trust is a binding trust deed and is equally applicable to married couples as to unmarried couples.
A cohabitation or living together agreement is an all-encompassing contract between the parties that will make clear all the financial living arrangements of the parties, including the ownership of a property, division of money/assets, how the mortgage, bills, outgoings and debts are to be met ,and what will happen to their finances in the event the relationship breaks down.
A cohabitation agreement is strongly advisable when living together but not marrying.
It is possible to have both a declaration of trust and cohabitation agreement, but it will be sufficient to have one or the other depending on the circumstances of the parties. The existence of either of these documents should avoid costly disputes in the future.
