Lack of Clarity Causes Title Disputes

When a couple’s intention is that a property should be owned in a way which is not the same as the legal form of ownership (i.e. where the intention is that they both have an equitable interest in their home, the title to which is in one of their names only), it is always sensible to make sure that the appropriate documentation is put in place to reflect this position – if only to avoid the potential problem of unnecessary legal costs if the ownership is subsequently disputed.

Two recent cases illustrate the potential pitfalls. In the first of these, a divorced couple who had had a stormy relationship for years got back together and bought a house in the name of the ex-husband, although both contributed towards its purchase. When their reconciliation failed, the ex-husband left the property. His ex-wife sought a declaration by the court that the property was hers alone whilst he sought a declaration that the property was jointly owned. The case went to the Court of Appeal, which rejected the ex-wife’s claim. However, the Court considered that she would not have contributed to the purchase and moved in to the house without an assurance that she could continue to live there if their relationship collapsed again. Accordingly, it ruled that the property could not be sold without the consent of the ex-wife and that on sale she would be entitled to half the proceeds.

Another case resulted from the death of a man who emigrated from Bromley to Australia 60 years ago, leaving his house in the UK to be occupied by his relatives here. The house purchase had been financed by a bank loan and loans from members of his family. His will left the residue of his estate to a woman in Australia who had cared for him in his old age. The man’s relatives claimed that he had held the house in Bromley on trust for his family. Again, the case went all the way to the Court of Appeal, which ruled that the man’s family had failed to discharge the burden of proof that their loans were contributions to the purchase price of the property, entitling them to a share in it, rather than just advances of money.

“To avoid problems, it is a simple matter to execute the appropriate legal documents giving someone a legal interest in a property. Failure to make one’s intentions clear can prove expensive and cause delays in the event of a dispute over ownership later on,” says Rupinder Bains.

Partner Note

Holman v Howes [2007] EWCA Civ 877.
Tackaberry v Hollis, Cobbett and Beacham [2007] EWCA 2633 (Ch).

This publication is intended for general guidance only. It provides useful information is a concise form and is not substitute for obtaining legal advice. If you would like advice specific to your circumstances, please contact us.