Unmarried couples and property; Who owns what?

Unmarried couples and property; Who owns what?

17th February 2012

When unmarried couples involved in a long term relationship separate, one issue that may arise is that of property ownership. If the couple have bought a house together,to whom does it belong?

Legally, if the house is in both parties’ names, they both hold the legal title to it. The issue arises in relation to the ‘beneficial interest’ in the house, the value, when parties have bought a house together but have not contributed equally, either by way of a deposit, mortgage payments or the cost of property improvements.

Where this has happened, the prospect of the value of the house simply being divided 50/50 can seem very unfair, especially against the background of ill feeling that so often accompanies separation. However, in cases where there have been unequal contributions such as where one party pays the deposit, whilst the other spends an equal amount on their holiday, to not separate the value 50/50 may also produce an unfair result.

What is important is what the parties intended the division of the value to be, though how this is to be identified in the absence of an express agreement is not easy.

The intention of the parties

Couples will often not set out, in clear terms, at the beginning of a relationship exactly what they do intend the position to be regarding the beneficial ownership of a property purchased together. The Court must therefore figure out what the parties intended.

Jones v Kernott

In this case, the parties met in 1981 and had two children. They purchased a house in 1985 in their joint names. They paid £30,000 with a despoit of £6000 from the sale proceeds of Ms Jones’ previous home. The mortgage and upkeep on the house was shared between them. In 1986, they jointly took out a loan of £2000 for an extension, on which Mr Kernott did some of the work himself. The trial judge found that this extension probably enhanced the value of the property by about 50% to £44,000.

Mr Kernott moved out of the property in 1993. Ms Jones remained with the children and paid all of the household expenses herself. Mr Kernott made no further contribution towards the purchase of the property and, in 1996, he bought his own house by cashing in a joint life insurance policy for the deposit, and by making mortgage payments. The Court found he would have been unable to do this had he been making any contribution towards the mortgage on the former family home.

Over the years, the value of the former family home increased and in 2006 Mr Kernott indicated that he wished to claim a beneficial share in it. In response, Ms Jones applied for a declaration under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 that she owned the entire beneficial interest in the property. Ms Jones’ position was that in the 14 and a half years following the seperation, there was evidence that their intentions had changed. Mr Kernott had bought his own house and ceased to make contributions to Ms Jones. By 2008 the property was valued at £245,000.

What the Court found

The Supreme Court concluded that the following principles should be applied where a family home is bought by a cohabiting couple in joint names with both responsible for the mortgage, but without any express agreement as to how the value of the property should be divided upon seperation;

  1. The starting point is that equity follows the law and, as they are joint legal owners, they jointly own the property 50/50.
  1. That position can be challenged by showing that (a) the parties intended something different when they bought the property, or (b) that they later intended that their ownership of the property would change.
  1. The intention of the parties can be deduced from their words or conduct.
  1. In cases where it is clear that (a) the parties did not intend joint ownership at the point the property was first purchased, or, if they did, (b) had changed their minds (but it is not possible to deduce what their actual intention was) the Court will award each party the share of the property that it considers fair. This it will do by considering the whole course of dealing between the parties.
  1. Each case will turn on its own facts, and the financial contribution of each party is one of many factors the Court must consider.

The Court found that whilst the starting point should be joint and equal ownership of the property as it was held in joint names, in this case, because of the parties’ conduct, that intention had changed. Once Mr Kernott had purchased a new home, his interest in the former family home was established. He maintained his new home whilst Ms Jones maintained the former family home. The intention was therefore that Ms Jones would have the sole benefit of any gain in that home and Mr Kernott would have the sole benefit of any gain in his new home. On that basis, the division made by the trial judge, 90/10 in favour of Ms Jones, would be appropriate in all the circumstances.


This case illustrates the principles the Court will follow and the correct approach. Where the property is in joint names, the starting point will always be that the parties are equal joint owners. If words or conduct at the time of the purchase, or later, before the property is sold, indicates something to the contrary, then the Courts may divide the interest differently. This is something the party seeking a greater share will have to satisfy the Court of, and it will not be an easy burden to discharge.