Sunday, 13 November 2011

Cohabitation and the effect of Kernott and Jones

The case of Kernott and Jones has been in the media and followed by all those that practice in family law. Talvinder, the Director at Leeds Family Law says "this case highlights the need for the development and reform of Cohabitation laws which are governed by parts of the law that relate to property, trusts and children. Whilst these laws serve a purpose they do not effectively deal with the family dynamics of the modern family. Many chose to cohabit and have children without realising that they have insufficient laws to protect them if the relationship breaks down.'

It is most important that if you decide not to enter into a marriage with your partner, that steps are taken to protect your interests. For example, in one of my earlier articles (Titled This is my home - isn't it?) I touched upon the issue of Cohabitation Agreements or Living Together Agreements as they are commonly known. It is important that the parties to a relationship consider their dynamics and provide for what will happen in the event that they separate. This is not the most romantic idea. Consider the situation if you moved into a home that your partner owned and then separated. Legally the person who is the registered owner of the property retains all the interest. The most dire situation would be the death of the person who owns this property and the remaining partner finding that they have to leave their home. If there is no Will the property will pass under the rules of Intestacy to the deceased partners family members. The bereaved partner would lose their home.

The case of Kernott and Jones awarded a 10% share of the property held in joint names to one of the cohabitants and 90% to the current occupant partner. The facts of the case are that Kernott and Jones lived together in a property for eight years. Then Kernott (male) moved out leaving Jones (female) in the home with 2 children. Jones continued to make the mortgage payments and maintained the home for 13 years. The property remained registered in their joint names for the duration of this separation. Kernott waited until the children were grown up before he issued a financial claim to realise his interest in the family home. Kernott and Jones were not married. A local County Court Judge ruled that Kernott should recieve 10%. Kernott appealed this decision seeking a larger share. The High Court upheld the County Court ruling on appeal. Kernott appealed again to the Court of Appeal. The Court of Appeal overturned the County Court and High Court decision and ruled that each should receive 50%. Jones appealed and the case was considered by the Supreme Court. The Supreme Court upheld the original decision and awarded 10% to Kernott and 90% to Jones. This was a hugely anticipated decision and welcomed by family lawyers who have long campaigned for recognition of the unmarried family and supported the need for reform and development of this area of law. There is recognition that the court will depart from the presumption that the property should be divided equally between the two joint owners if either have failed to take steps to address this position at the time that they separate. So essentially, the decision shows that the Court will depart from this view and consider the individual contributions made by each party. This is an important step for Cohabitation laws and the need for the reform of the laws relating to Cohabitation has never been highlighted more than in this case.

Our previous Government, and this Government, shy away from the area of cohabitation because it is very complex and there is the view that it would undermine the principle of the marriage if cohabitants were given similar rights. However, the fact remains that until such time this area of law is reformed all those that chose to Cohabit remain vulnerable and have a sense of uncertainty surrounding their financial security should they separate.

Scotland have welcomed and introduced laws in relation to Cohabitation but our Government seems reluctant to do so despite support from many members of the public and in particular, recognition from Solicitors and Barristers alike that cohabitants needs more legal rights to protect them.

So what steps can you take to protect yourself?  The first most important issue is that you obtain advice from Solicitors so that you can regulate how you will deal with the financial matters in the event that you separate. You will also need to consider provisions in your Will to ensure that your intentions on your death are stipulated should you wish to pass the property to your partner.

It is also important to ensure that provisions on how financial contributions will be made towards the property and how the home will be maintained and in what shares if there is not going to be an equal division upon separation. This is where Cohabitation Agreements may assist and it is important that these are considered early on. Any relationship will have complications when it breaks down and the agreement cannot help the emotional fall out that will occur. However, the agreement can serve to deal with the practicalities which can assist is resolving the issues surrounding finances.

No comments: