Co-ownership – A Cautionary Tale

Co-OwnershipRecent case law highlights the importance of understanding how property can be held jointly

Whenever property is jointly owned, there is the possibility of disagreement. The ongoing case of Kernott v Jones [2010] provides, in the words of Lord Justice Wall, “a cautionary tale” to all unmarried couples and the solicitors who advise them.

If you have already completed the Diploma course, you will be aware that there are only two ways to hold property in England and Wales – as a joint tenant or as a tenant in common. With only two options, you would think that couples entering into the world of home ownership should always get suitable legal advice. Unfortunately, this is not the case and it can be a very costly mistake.

Patricia Jones split up with her partner, Leonard Kernott, in 1993. They had lived together for eight years. Ms Jones paid the £6,000 deposit on the house and the £30,000 mortgage, and Mr Kernott paid £400 a month in expenses until he moved out. It was only 12 years later, when Mr Kernott tried to recover a half share in the property, that the trouble began. The house was now worth £240,000, and as the case stands at the moment Mr Kernott is entitled to half of the property. A decision from the Supreme Court will be made later this month on the case, but even if they find in favour of Ms Jones, this will have been a very expensive lesson for all concerned.

Most readers might understandably feel that in light of the fact that Ms Jones brought up the couple’s two children and paid the mortgage without assistance from her ex, she is morally entitled to 100% of the property. What the case highlights is that the courts will not simply ignore the law even if they feel it might be more just to do so.

Lord Justice Wall went on to say about cohabiting partners that they should:

“contemplate and address the unthinkable, namely that their relationship will break down and that they will fall out over what they do and do not own”.

It is natural that a couple will be reluctant to discuss what should happen if a relationship breaks down, but those who advise them should make sure they do. There are still common misconceptions, such as the idea that common-law husbands/wives exist or the misbelief that if you live with someone a long time, you have an entitlement to a share of his/her property.

The decision of the Court of Appeal in the Jones case is harsh, and depending on the outcome of the Supreme Court case, it may make the law harder to predict.

When buying a property, the simple way to avoid problems is to get legal advice. If you own your home as a joint tenant, you own it jointly and equally. If you split up and sell it, you will normally get half, no matter how much you contributed. If one of the joint owners dies, the survivors will automatically get the deceased’s share. If you hold property as a tenant in common, a property can be held in unequal shares and can be gifted in a will if you die. As someone training to work in the legal environment, you may be able to avoid problems such as those suffered by Ms Jones by continuing to expand your knowledge of the law.