Dangerously in Love
As couples in both England & the Scandinavian region are becoming increasingly secular, they are more often choosing to buy a house together but remain unmarried. However, in the event that the relationship breaks down and the couple has not sought adequate legal advice, the fairytale often turns into a lengthy battle. Whilst in Scandinavia, the general view is that property bought in the joint names of an unmarried couple will be divided by way of a 50/50 split, the position is more complicated in the UK. As recent case law suggests, if couples want to avoid the court system in the event they split up, they need to agree how common property is to be owned when times are good, just in case.

The recent Supreme Court judgment in the case of Jones v Kernott gives some indication of the legal minefield that can ensue in the absence of such pre-emptive agreement.  The facts of this case are, in brief, that in 1985 J and K purchased a house in their joint names (“the Property”). The purchase was funded by the proceeds of the sale of J’s mobile home and an endowment mortgage in their joint names.   K moved out of the Property in 1993 and in 1995 a joint life insurance policy was cashed in to enable K to put down a deposit on his home.   J remained living in the Property with their two children paying the mortgage and all other expenses. Indeed throughout that time K made very little contribution to the upkeep of the children. This situation continued for some 14 and a half years.  

At the heart of the case brought by the parties was the question of how much equity each party was entitled to from the Property. At first instance the judge accepted J’s assertion that when the Property was purchased it was the intention of the parties that the property was to be held in equal shares, but that intention had changed once the parties had separated. The Judge in the first instance held that J was entitled to 90% of the equity in the Property and K to 10%. K appealed the judgment and the Court of Appeal rebutted this, awarding each party 50%. However, on appeal, the Supreme Court reverted to the original decision, justifying this based on the parties’ conduct and the facts of the case.

All this goes to show that whilst love can be fickle and the courts sometimes unfair, the only way to avoid the possibility of a potentially lengthy and costly legal battle is to seek advice early and to create a legally binding document that parties agree with. Any agreement reached should be regularly reviewed by the parties in light of changing circumstances. This course of action will minimize any uncertainty between the parties.

Corren Troen regularly advises Scandinavian clients living in the UK on Private Client issues.  For more information  please contact Elizabeth Jones on 020 7592 8900.