Administering Estates: Can a cohabitant claim ownership of property held in the deceased’s sole name?

Co-habitation is not in itself enough to establish a right of co-ownership. Indeed, unlike married couples, ordinarily, a co-habitant has no claim, under the Matrimonial Causes Acts, against the legal owner’s property whilst the legal owner is alive. On the death of a legal owner, co-habitants claims are limited to those under the Inheritance (Provision for Family and Dependents) Act 1975. Whilst these claims may well be worth exploring, statute-based Family Provision claims are limited and do not form the subject material of this article.

This article will focus on claims of a direct propriety interest in a property to which common law principles apply.

Complications can arise when personal representatives are trying to sell estate property, but the occupier refuses to leave voluntarily. Recovering possession can become even more complex in circumstances where the occupier was co-habiting with the deceased and asserts rights to ownership of the estate property. This is most likely to occur where the occupier and the deceased were in a relationship and cohabiting as a non-married couple, but could potentially apply to co-habitation involving other family members.

Disputes can arise particularly where there is no will set out who is to inherit the property or there is a will but the cohabitee has not been left any interest in the property.

The Land Registry holds details of the legal owner of the property but this will not always provide the full picture of how a property is owned. That is because when dealing with property one has to look at both legal ownership and beneficial ownership.

Someone can be the legal owner, but not have any right to benefit from the sale proceeds. For example. a parent can be responsible for a property owned by a child.  Because of the separation of legal and beneficial ownership, individuals who are not included in the legal title can be co-owners. The cohabitant may assert that claim of beneficial ownership at any time, but this often arises following the legal owner’s death.

The first thing will be to investigate whether there is any express trust between the parties setting out the beneficial interests. An express declaration of trust needs to comply with certain legal formalities including being in writing and signed by the parties (s53(1)(b) Law or Property Act 1925).

However, often in co-ownership cases involving family members, there is no formal, express declaration of trust. If there is no express trust, can an occupier still assert a claim to the property?

The occupier may claim a beneficial interest by arguing that there is an ‘implied trust’, more specifically that a ‘common intention’ constructive trust has arisen. At its most basic, this describes a trust that is implied by law that arises from an agreement, understanding or arrangement, a ‘common intention’ between the parties and detrimental reliance on that agreement.

To succeed with this argument the non-legal owner will have to prove the following:

• That it was intended that they would have an interest in the property i.e. there was a common intention for the beneficial interest to be shared
• That they acted to their detriment on the basis of that common intention. This is often referred to as ‘detrimental reliance’
• If the above can be established, they will then have to prove the extent of their interest is i.e. what the intention was regarding how the property should be shared

The general presumption is that beneficial interests follow the legal title. The non-legal owner will therefore have burden of proof to show that the beneficial ownership should be different to the legal ownership. They must prove this ‘on a balance of probabilities’ which is the civil standard of proof.

To establish a common intention that the beneficial interest is to be shared, one first needs to look at what evidence there is of that intention. Is there written evidence, perhaps emails, messages or notes between the parties setting out the parties’ intentions?

That does not mean the intention has to be in writing. There could be evidence of conversations or discussions between the parties about how a property is intended to be shared.

Of course, an oral conversation is harder to evidence and the outcome of a Court claim could turn on whose witness evidence a judge prefers at trial.

Ultimately it would be for a Court to decide any dispute of fact between the parties. This can make litigating such disputes unpredictable, particularly in cases involving personal representatives where the deceased  cannot give evidence.

If there is no direct evidence of what was agreed between the parties, then the Court can also look at the parties’ conduct and see if an agreement can be inferred. Conduct will include financial contributions to the purchase price of the property or mortgage payments but non-financial contributions may also need to be considered.

The non-legal owner must also be able to prove detrimental reliance on the agreement. The Court of Appeal has recently confirmed in the case of Hudson v Hathway [2022] EWCA Civ 1648 the requirement for  ‘detrimental reliance’ even in cases where there is an express agreement between the parties.

This requires the party claiming the beneficial interest to show that he or she acted in such a way that was detrimental to their position on the basis of the common intention i.e. on the reasonable belief that he or she was entitled to a beneficial interest in the property. The detriment need not be financial but it must be substantial.

If the non-legal owner can prove that there was a common intention to share the beneficial interest and they have acted to their detriment, they will then need to prove the extent of that beneficial interest.

Without evidence of an express agreement the Court will have to determine this through inferring the parties’ intention or by determining what is fair having regard to the whole course of dealings between the parties in relation to the property. This might be determined by reference to the extent of the detrimental reliance.

The non-legal owner may also assert other claims, including propriety estoppel or a claim under the Inheritance (Provision for Family and Dependants) Act 1975. My colleague Tom Dickinson has written more about these other types of claim here.

The law governing constructive trusts is complex and can lead to costly and lengthy litigation. Personal representatives could find that what started as a seemingly straightforward claim to recover possession of estate property develops into much more complicated litigation involving difficult legal and factual disputes.

These cases can be even more challenging for personal representatives as they will need to respond to factual assertions about whether there was a ‘common intention’, when they may not have had any direct knowledge of agreements or discussions that took place between the deceased and the cohabitant.

In such cases it is important to seek legal advice early on including exploring whether the dispute can be settled in a  timely cost-effective manner through negotiation or mediation without Court proceedings.