IMPORTANCE OF COHABITATION AND SEPARATION AGREEMENTS19th Apr 2012
The property dispute of a couple who separated 17 years ago has recently been decided by the Courts reminding us of the importance of proper advice where property is bought by a couple, particularly unmarried couples.
The Court has decided that as the property was jointly owned the former partner, Mr Kernott, is entitled to half the equity in the property despite the fact that he has not lived at the property since the separation and has not since that time made any financial contributions to the property which was occupied by Ms Jones throughout.
The dispute could probably have been avoided had the couple given further thought to their financial arrangements at the time they purchased the property. By having a cohabitation agreement and declaration of trust documents prepared at the time of the purchase the couple could have specified how they intended to share the proceeds of sale should they separate or fall into dispute.
Of course in the time since their separation the equity in the property has increased as a consequence of an increase in property prices as well, and this aspect of the problem could have been addressed by resolving matters at the time of the separation. Whilst it can be a very stressful and upsetting time, it is normally far better to resolve matters as quickly as possible further to a separation, and to have any agreements drawn into a document so that terms are clear for the future. Both parties can then move on knowing that the issues are dealt with.
We are happy to offer advice where a joint purchase is planned - just ask your conveyancing solicitor for details of a member of the family department convenient to you and for details of the costs involved.