There are times when the ownership of property can be different from what it seems. The legal owner of a property is the person whose name is registered at the Land Registry, but this may not tell the whole story of who owns a property. It is the beneficial ownership that sets out who actually owns the property and in what shares.
There may be formal paperwork setting out who the beneficial owners are (for example, where a property is purchased by one person who holds it on trust for another, under the terms of a clear trust document). However, this is not always the case.
Co-habitants or family members who are helping each other out with a property purchase, often fail to put into writing the extent of their beneficial interest in a shared home or investment property. This can cause issues if the couple split, or when the property is sold or the legal owner of the property dies. We are frequently approached by clients who want to realise their share in a property which is in the name of another person.
In such scenarios, there are a number of legal routes that can be taken to try and remedy the situation.
Constructive Trust (common intention between you)
If there is no written agreement then you may be able to argue that there was a “common intention” between you and the other party that you would be entitled to a share in the property. This is known as a constructive trust.
In order to prove this, you would have to prove;
a)That there was a common intention between you and the other party that you would have an interest in the property (this intention can be through something said or written, or inferred through actions);
b)That there has been a change of position on your part and that of the other party (for example contributing to the mortgage or paying for property renovations); and
c)That it would be unfair to prevent you having that share in the property.
If this intention is proven then the Court will decide your share based on any established agreement or by deciding what is fair based on all the circumstances of the case.
Proprietary Estoppel (a promise made to you)
If you were promised a share in a property and have relied on this promise then you may be able to make a claim to the Court that this promise should be upheld. This is known as proprietary estoppel.
In order to prove this, you would need to prove;
a)That a promise (or series of promises) was made to you, and the terms of that promise;
b)That it was reasonable for you to rely on the promise or promises that were made to you.
c)That you relied on the promise to your detriment (you normally have to show that you have suffered some kind of financial hardship (like contributing to the mortgage payments) as a result of the promise).
Where this is established the Court has a wide discretion and will usually award you what is considered to be fair to satisfy the promise or promises made.
Claim under the Inheritance (Provision for Family and Dependants) Act 1975
Cohabitants often face a problem when their partner, the legal owner of the property has died, and they do not stand to inherit the property. If this has happened to you, it can mean that you are threatened with loss of your home at a time when you are already mourning the loss of someone close. A cohabitant, or child in the same position, is entitled to bring a claim under the 1975 Inheritance Act for reasonable financial provision, which can include the provision of housing.
The Court decides such cases by looking at a variety of factors including your financial resources/needs of the Claimant, any other Claimants and the beneficiaries of the estate; any obligations/responsibilities of the deceased (including promises made to you about what might happen with the property, or what might happen on their death); the size of the estate; any health needs you may have and any other relevant issues including conduct. The Court will balance these factors to reach a result, which can include the provision of property, or money to buy or rent somewhere else.