Giles Robinson, Family Law Partner, discusses the importance of cohabitants entering into a declaration of trust or cohabitation agreement.
The recent case of Horn v Chipperfield has, once again, emphasised the importance of cohabitants entering into a declaration of trust or cohabitation agreement, particularly if there is a wish to recognise that one of them has a greater interest in the value of their home.
In this case the couple had never married and had two children together. They had purchased a property in joint names. Upon separation they could not agree how much each was entitled to. The court noted that at the heart of the dispute was the question as to whether the parties intended to purchase the property as joint tenants or tenants in common in unequal shares corresponding to their respective financial contributions. The property was purchased for £740,000. Mr Horn invested £231,820 at the outset and paid the costs of the purchase. The precise amount invested by Ms Chipperfield was debated, but substantially less, and the balance was made up by a mortgage.
With the couple having originally indicated that they wanted to hold the property as joint tenants this created a presumption that they had an equal interest in the property and, despite Mr Horn’s assertion to the contrary, the court ultimately found that there was no evidence to suggest that that presumption should be overturned.
If Mr Horn had wanted to properly protect his interest in the property then he should have entered into a declaration of trust or a cohabitation agreement to do so, rather than agreeing to hold the property as joint tenants – and wishing that he had not done when the relationship broke down.
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