Co-Ownership - Interest in the Family Home
What if there is no express declaration? - We will consider equitable presumptions and how they apply…
Equity Follows the Law
In law, only joint tenancy can exist – the assumption will therefore be that in equity there will also be joint tenancy.
This can however be rebuttable.
Where a family home is purchased in joint names, there will be a strong presumption that there will be joint tenancy,
even if there is unequal contribution of shares (Stack v Dowden (2007)).
Equity Prefers a tenancy in common
Tenancy in common is seen as producing more just/ fair results. As we know, equity prefers a just outcome and
therefore it is considered that by equity, tenancy in common will be favoured.
Q: Why is tenancy in common considered more fair?
Survivorship does not apply…
Unequal contribution to the purchase price
When it comes to family homes, unequal contribution to the purchase price is unlikely to rebut the presumption of
tenancy in common.
However, where we are not dealing with family domestic relations, and the parties contributed different shares to the
purchase price, a presumption will suggest a tenancy in common which can then reflect the different shares.
Mortgage loans from two or more mortgagees
Where you have two separate lenders providing a loan for a purchase of property, it is presumed that they will be
tenants in common in equity.
Imagine, if lender A provided a loan of £200,000 and lender B provided a loan of £50,000. It would be unjust if these
could only be viewed as joint tenants.
Commercial/ business partnerships
When it comes to business partnerships and co-ownership in this business context, there is presumption in favour of the
parties holding the interest in the property as tenants in common.
Q: Would survivorship make any sense between business partners?
As much as life partners would often want the property to pass to the other at death, it would be surprising if business
partners would prefer their interests to pass to their business partners, rather than their families.
Business tenants
Very similar to the previous assumption:
Where an interest in land is held over a property to allow for distinct business purposes, there is the presumption that
these will be held as tenants in common in equity.
And therefore, each partner may be entitled to unequal shares of ownership.
If it is unclear how the parties intended to divide the ownership, how do we quantify the shares?
, Quantifying shares
Firstly, the presumption of equitable joint tenancy has to be rebutted.
The court will search for the actual common intention of the parties, only where this is unknown or unclear, is the court
permitted to infer a common intention based on the conduct of the parties.
Chadwick LJ in Oxley v Hiscock (2004):
‘each is entitled to that share which the court considers fair having regard to the whole course of dealing between them
in relation to the property’
Jones v Kernott (2011)
F: Miss Jones and Mr Kernott purchased a property and shared the household expenses for over eight years. Mr Kernott
moved out of the property but Miss Jones remained living there with their two children. She paid all the household
expenses. Mr Kernott made no further payments towards the property. This continued for over 14 years at which point
the property was placed on the market to be sold. Mr Kernott brought proceedings seeking a declaration as to the
equitable entitlements of each party in the property.
Q: What was the extent of the parties’ respective shares in 39 Badger Hall? Was there sufficient evidence to justify
rebuttal of the presumption of equitable joint tenancy?
D: The Supreme Court awarded a 90–10 percent split in Miss Jones’. The Supreme Court confirmed that where property
was purchased in joint names, there was a presumption of beneficial joint tenancy. This presumption could be rebutted
by evidence of common intention to share other than equally. Any rebuttal of this presumption was, however, not to be
lightly embarked upon as purchasing property jointly as a home indicated an emotional and economic commitment to a
joint enterprise.
At the outset when the property was purchased, the common intention was to provide a home for Miss Jones, Mr
Kernott, and their children. But their intentions changed.
But how about if one party is not a registered legal or equitable owner?
When it comes to married couples, or couples in a civil partnership, we have legislation which deals with division of
assets.
We however don’t have the same guidance when it comes to unmarried couples, or ones who have not entered a civil
partnership.
Office for national statistics (2019):
“Conversely the proportion of families containing a cohabiting couple increased from 15.3% to 18.4%. This reflects the
declining trend seen in the proportion of the population who are married and an increasing trend in the proportion
cohabiting.”
This means that nearly 1 in 5 families is not accounted for by the existing legislation.
Parliament has not stepped up to provide a framework to determine interests in family home when it comes to
cohabiting couples.
Let’s imagine…
Alison and Patrick purchased a property together. The house was under Alison’s name because she has a better credit
score, however Patrick paid half of the deposit and they continued to pay the mortgage jointly.
Once their relationship breaks down, does Patrick have any rights to the house?
NO LEGISLATION TO DEAL WITH THIS… WHAT DO WE DO?
What if there is no express declaration? - We will consider equitable presumptions and how they apply…
Equity Follows the Law
In law, only joint tenancy can exist – the assumption will therefore be that in equity there will also be joint tenancy.
This can however be rebuttable.
Where a family home is purchased in joint names, there will be a strong presumption that there will be joint tenancy,
even if there is unequal contribution of shares (Stack v Dowden (2007)).
Equity Prefers a tenancy in common
Tenancy in common is seen as producing more just/ fair results. As we know, equity prefers a just outcome and
therefore it is considered that by equity, tenancy in common will be favoured.
Q: Why is tenancy in common considered more fair?
Survivorship does not apply…
Unequal contribution to the purchase price
When it comes to family homes, unequal contribution to the purchase price is unlikely to rebut the presumption of
tenancy in common.
However, where we are not dealing with family domestic relations, and the parties contributed different shares to the
purchase price, a presumption will suggest a tenancy in common which can then reflect the different shares.
Mortgage loans from two or more mortgagees
Where you have two separate lenders providing a loan for a purchase of property, it is presumed that they will be
tenants in common in equity.
Imagine, if lender A provided a loan of £200,000 and lender B provided a loan of £50,000. It would be unjust if these
could only be viewed as joint tenants.
Commercial/ business partnerships
When it comes to business partnerships and co-ownership in this business context, there is presumption in favour of the
parties holding the interest in the property as tenants in common.
Q: Would survivorship make any sense between business partners?
As much as life partners would often want the property to pass to the other at death, it would be surprising if business
partners would prefer their interests to pass to their business partners, rather than their families.
Business tenants
Very similar to the previous assumption:
Where an interest in land is held over a property to allow for distinct business purposes, there is the presumption that
these will be held as tenants in common in equity.
And therefore, each partner may be entitled to unequal shares of ownership.
If it is unclear how the parties intended to divide the ownership, how do we quantify the shares?
, Quantifying shares
Firstly, the presumption of equitable joint tenancy has to be rebutted.
The court will search for the actual common intention of the parties, only where this is unknown or unclear, is the court
permitted to infer a common intention based on the conduct of the parties.
Chadwick LJ in Oxley v Hiscock (2004):
‘each is entitled to that share which the court considers fair having regard to the whole course of dealing between them
in relation to the property’
Jones v Kernott (2011)
F: Miss Jones and Mr Kernott purchased a property and shared the household expenses for over eight years. Mr Kernott
moved out of the property but Miss Jones remained living there with their two children. She paid all the household
expenses. Mr Kernott made no further payments towards the property. This continued for over 14 years at which point
the property was placed on the market to be sold. Mr Kernott brought proceedings seeking a declaration as to the
equitable entitlements of each party in the property.
Q: What was the extent of the parties’ respective shares in 39 Badger Hall? Was there sufficient evidence to justify
rebuttal of the presumption of equitable joint tenancy?
D: The Supreme Court awarded a 90–10 percent split in Miss Jones’. The Supreme Court confirmed that where property
was purchased in joint names, there was a presumption of beneficial joint tenancy. This presumption could be rebutted
by evidence of common intention to share other than equally. Any rebuttal of this presumption was, however, not to be
lightly embarked upon as purchasing property jointly as a home indicated an emotional and economic commitment to a
joint enterprise.
At the outset when the property was purchased, the common intention was to provide a home for Miss Jones, Mr
Kernott, and their children. But their intentions changed.
But how about if one party is not a registered legal or equitable owner?
When it comes to married couples, or couples in a civil partnership, we have legislation which deals with division of
assets.
We however don’t have the same guidance when it comes to unmarried couples, or ones who have not entered a civil
partnership.
Office for national statistics (2019):
“Conversely the proportion of families containing a cohabiting couple increased from 15.3% to 18.4%. This reflects the
declining trend seen in the proportion of the population who are married and an increasing trend in the proportion
cohabiting.”
This means that nearly 1 in 5 families is not accounted for by the existing legislation.
Parliament has not stepped up to provide a framework to determine interests in family home when it comes to
cohabiting couples.
Let’s imagine…
Alison and Patrick purchased a property together. The house was under Alison’s name because she has a better credit
score, however Patrick paid half of the deposit and they continued to pay the mortgage jointly.
Once their relationship breaks down, does Patrick have any rights to the house?
NO LEGISLATION TO DEAL WITH THIS… WHAT DO WE DO?
