“What’s mine is yours, and what is yours is yours”

The ownership of property is a complex area of law.  A “blog” of this nature can do no more than provide clients with a “checklist” of issues to bear in mind when purchasing a property jointly and/or contributing financially to the maintenance of a property that belongs to your partner, registered in his or her sole name.

Disputes concerning a party’s “beneficial interest” or an individual’s “share” in the property, are disputes that regularly come before the court.

For property that is jointly purchased now it is likely that there will be less disputes as to each parties’ share.  This is because the current transfer documents have a section that sets out whether the property is held on trust and the percentage share attributable to each of the respective owners. That tends to be binding.

Consequently, any couple that intends to purchase a property jointly, should ensure that the conveyancer properly completes the appropriate section in the transfer form relating to “Declarations of Trust”. If there is a future dispute as to ownership, the court will almost immediately make reference to this part of the transfer document, which will be very persuasive. In this section each parties’ respective share can and should be properly recorded on the transfer document or TR1.

Notwithstanding this important amendment to the TR1, disputes nevertheless continue to end up in court, when they can and should easily have been avoided.

The issue concerning property that is in the name of one individual is more complex.  Usually, one of the partners has the property in his or her sole name and the other partner contributes financially to the purchase or upkeep of the property.

In this situation, for the “other” partner to seek to argue that they have acquired a beneficial interest in the property, some fundamental hurdles have to be overcome.  Firstly, there has to be an agreement or intention that the non-registered party is to own or is to acquire an interest in the property.  Often, there has to be detrimental reliance.  In other words, if the non registered title holder contributes to the purchase of the property in a substantial way, or in any other way, it is possible for the court to infer that there was an agreement between the parties, as regards acquiring a beneficial interest.

It is therefore crucially important that whenever a non-registered partner contributes financially to a property, there is some written document that sets out the basis of that payment.  Conversely, if the legal owner of the property invites his or her partner to substantially refurbish the property, or undertake maintenance works to the property, there should be some written document setting out the basis of this arrangement.

Just because an individual substantially contributes to the maintenance of a property, does not mean that that individual automatically can assert a beneficial interest in it.

Hence, the need to carefully document the terms of the financial contributions that are being made and/or the works that are being undertaken.  When a relationship is in a “good place”, the necessity to document each parties’ intentions may appear to be unnecessary. However, sadly, relationships break down, and if an unregistered partner wants to assert a beneficial interest in a property, or the registered partner wants to oppose such a claim, the court will look closely at written contemporary evidence there is to support such an agreement.

If there is nothing in writing, a court is likely to infer an agreement if an unregistered individual substantially contributes financially to the purchase of the property – the detrimental reliance point.  However, maintenance of a property alone, even if it is substantial, will not usually by itself give rise to a beneficial interest without there being clear evidence of an agreement.

Hopefully this “blog” will give parties who are seeking to purchase or ‘acquire’ a property together, some helpful ‘pointers’ to avoid future litigation.

*Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*