Justine Simms, associate in the property department at Osbornes discusses why obtaining a trust deed is all the more important after a recent Supreme Court decision.

The number of unmarried couples living in and owning property together has risen significantly in recent years. The recent case of Jones v Kernott highlights the problems that can arise in relation to the matrimonial home when unmarried couples separate and reinforces the importance of having a trust deed in place that sets out all the parties' intentions.

The Supreme Court has in Jones v Kernott provided some welcome guidance in relation to the interests of joint owners of property when they are unmarried. The Court has confirmed that the initial assumption that the property is owned jointly and equally (as set out in the earlier case of Stack v Dowden) remains but that this presumption can be rebutted. The Court determined that if it can be inferred from the parties' actions and conduct (either at the time of purchase or later) that their intention was not equal ownership, or changed from equal ownership, then the inference should be made.

Although the ruling in Jones v Kernott now allows the Court to consider the intentions of the parties and make a decision on what is fair, if a trust deed is in place when the property is purchased, the intention of the parties is clear and will provide the Court with guidance on each party's beneficial interest in the property.

A trust deed can detail the amount of deposit each party has contributed and the redistribution of this upon sale. It can also specify the shares of the property each party owns and the amount each party is to contribute towards any mortgage over the property. Perhaps most importantly, the trust deed can also set out the procedure in the event of a sale or a dispute and can detail what happens if one owner wants to sell the property and the other does not.

It is also possible to vary a trust deed if the circumstances of the relationship change.

If you have any questions regarding the above or would like advice on any other property issue please:

• E-mail Justine Simms
• Call us on 0207 485 8811
• Fill in our online enquiry form.

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