Where parties are unmarried the answer to this question is not easy.
Who owns the property and how?
There are two different ways in which you can own or have an interest in property.
One is legal ownership and the other is beneficial ownership.
For example, you may be joint legal owners of a property, but one party may have a greater beneficial interest because they have contributed more financially.
Is the property owned in joint names or in an individual’s sole name?
If you face a dispute of this type, it is vital to first establish the nature of ownership and you can do this by obtaining an up to date copy of the Title Register from the Land Registry website which you can access here through this link.
A property can be owned by one person or jointly by more than one person:
- if it is owned jointly it may be held as joint tenants or tenants in common
- where parties own a property as joint tenants their beneficial interest or ownership is equal (i.e. 50:50)
- this is also the case where parties own property as tenants in common in equal shares
- otherwise, parties may be tenants in common in unequal shares
Remember whether or not a mortgage against the property is in joint names will not necessarily reflect the legal ownership of the property.
If the property is owned in joint names, was the property purchased before or after 1 April 1998?
On 1 April 1998 the form used to record the transfer, ownership, and registration of a property at the Land Registry changed. The form which has been in use since 1998 is called Form TR1.
Before 1998 where a property was owned jointly the parties’ beneficial ownership was recorded in a document called a deed. The deed would formally record the “declaration of trust” between the parties as to the beneficial ownership of the property.
Since 1998 Form TR1 includes (at panel 10) what may appear to be a fairly innocuous section with a series of tick boxes which indicates whether the parties:
- are to hold the property on trust for themselves as joint tenants
- are to hold the property on trust for themselves as tenants in common in equal shares
- are to hold the property on trust:
AS SPECIFIED either in Form TR1 or in a separate trust document
Where a property is owned jointly and Form TR1 has been completed this will be conclusive as to both the legal and beneficial ownership of the property. This is the case even if the parties’ understanding between themselves was or is different and even if one party has made a greater financial contribution to the property and this is often the cause of dispute.
A copy of Form TR1 may be obtained either from the conveyancing solicitor who dealt with the purchase or a copy may have been filed at and retained by the Land Registry.
Where there is one legal owner of the property the key questions to ask are:
Is there an express declaration of trust?
Are the agreed shares of ownership recorded in writing either within Form TR1 (as described above) or within a separate formal “trust” document.
Assuming that there is only one legal owner panel 10 of Form TR1 should not have been completed. Is there any other written agreement, for example a cohabitation agreement or a separate deed (known as a declaration of trust)?
If there is no express declaration of trust a trust can still be implied. A trust may be implied by something that parties have done, an understanding between the parties, and behaviour and/or conduct as a result of that understanding or belief. This is explained further below.
The person who is seeking to claim a beneficial interest in the property would need to evidence that the legal ownership as recorded by the Land Registry does not reflect the true position and explain why that is the case.
Their argument would be that there is an implied trust in place. There are three types of implied trust or “remedies”. These are a common intention constructive trust; a resulting trust; and proprietary or promissory estoppel. The circumstances in which you might be able to rely on each of these legal arguments is explained below.
Were you and your partner in a relationship when the property was purchased? Did you contribute financially to the purchase of the property?
If so you may be able to evidence that there is what is known as a “resulting trust”. Even if the property is solely owned by one party, if the other can prove that they have funded the purchase in part or in full then they may be able to establish that they have a beneficial interest in the property by way of a resulting trust.
Otherwise, if you and your partner were not in a relationship when the property was purchased but entered into a relationship since then, or if you were in a relationship but you did not contribute financially towards the purchase, what has been your understanding and intentions in terms of the property? You may have:
a. made a direct financial contribution to the property, for example by paying towards the mortgage or to home improvements on the understanding that the property was your home and that you had or would have an interest in the property.
b. made an indirect and non-financial contribution, for example by looking after the family and by taking care of the household, again on the understanding that the property was your home and that you had or would have an interest in the property.
You would need to prove that there was a “common understanding” or “common intention” between you and your partner as to the property. What is relevant is your understanding and intentions during the course of your relationship, and not following the breakdown of your relationship. Here are some examples of how to prove your indirect or non-financial common understanding or common intention:
- you have supported your partner or otherwise facilitated renovations or home improvements
- you have looked after the house and the family (including children and/or other family members)
- you have supported your partner’s career or business
and you have done all of the above or similar on the understanding that “you will always be looked after”. That your partner would “do right by you”. That “this is and always will be your home”.
As well as proving that there was a common understanding or common intention as to ownership it is also necessary to prove that you have relied on that understanding to your detriment by, for example:
- not developing or progressing your career or achieving financial independence because of your commitments to your joint household and to the family and your partner
- spending your income and/or savings on the house (either in order to pay the mortgage or to fund improvements or renovations)
Your beneficial interest in the property would be established by way of a “common intention constructive trust”.
If you have been led to believe that you either had or would have an interest in the property and you relied on this belief to your detriment.
This is in effect a broken promise. The promise may have been communicated verbally or by actions or conduct over a number of years. If established, this would be described as “proprietary estoppel”. If your claim is successful your partner would be prevented, or stopped, from going back on their promise.
The questions above have been framed assuming the breakdown of a relationship where parties have been living together as a couple. While that is the most common scenario, this type of relationship is not part of the legal test and is not necessary in order to evidence the existence of an implied trust or to argue that there has been a promise made which should be upheld.
These issues or arguments can apply in all relationships. What is needed is to establish the type of relationship, the understanding, promise or agreement between the parties, and what has been done (and what has not been done) as a result of that understanding.
You may also be wondering whether the position would be different if there are children of the relationship. If so keep checking our website as we will be covering this related topic very soon.
For an initial FREE consultation on any aspect of family law, us on 01207.655178
This article is intended to give an overview on your legal or financial position and is provided for information only.