Who owns what?

For most lawyers who practice in this area, clients invariably either fall into one of two camps:

EITHER

  • The joint ownership is registered with the Land Registry (i.e. legal ownership) but there is no evidence of what shares they own and there is a dispute as to what the shareholding should be,

OR

  • Only one party to the relationship is the legal owner and the other feels beneficially entitled to a share of that property.

In either case, an application can be made to the Court under section 14 of the Trusts of Land and Appointments of Trustees Act 1996. It is a matter for the applicant to prove that he or she has a beneficial interest and/ or the extent of his or her beneficial interest in the property.

A beneficial interest will afford a person the right to occupy, prevent a sale or obtain a share of the proceeds of a sale equal to the extent of their beneficial interest. This is why it is important to establish the existence of a beneficial interest.

Establishing the extent of a beneficial interest is always tricky and complex. Unlike marriage where the Courts will divide the proceeds in accordance with the principles of fairness, this doesn’t apply to cohabiting couples. Where a property is now bought in joint names, joint owners are required to indicate how they wish to hold their property. This wasn’t the case previously and therefore there has been a raft of cases before the court where couples are in dispute as to beneficial ownership.

The key to establishing the existence and extent of a beneficial interest is by looking at the intention of the parties. The best way of doing this would be with reference to documentary evidence. In the absence of documentary evidence the Court will look at the legal ownership and whether the home was bought in joint names. If not, the court will look to evidence of a common intention which can be inferred from the parties conduct and dealings between each other. If the property was owned in joint names but the extent of the ownership is not clear then the courts will presume an intention to share 50/50 but which can be displaced if there is evidence that the common intention is different either when the property was purchased or later on (again which can be deduced from the parties conduct and dealings with one another). Interestingly, where it is clear that there was a different intention either at the start or there was a change as time went on and the Court can’t infer an actual intention, the Court is entitled to infer an intention from their conduct and dealings with one another that is fair to both of them.