Joint Ownership
Where an unmarried couple purchase a home in joint names then they will generally own it in 50/50 shares. The Supreme Court provided the following guidance in the leading case of Jones v Kernott in 2008 for disputes about the level of financial ownership a person has in a property:
1. The starting point is that a property purchased in joint names (and without the title deed which they both sign on the purchase saying otherwise) is owned jointly 50:50 shares.
2. This starting point can be displaced by showing that they had a different common intention at the time they purchased it, or that they later formed the different common intention to change their shares.
3. Where they did not record their agreement in writing, it is necessary to look at their conduct.
4. If it is clear that they did not intend to own the property equally, the Court has to decide what is fair having regard to the whole course of dealing between them in relation to the property. This gives the court a wide discretion and hence each case is different.
5. Each case will turn on its own facts. Financial contributions are relevant, but there are many other factors which may enable the court to decide what shares were either intended or fair.
Where the family home was purchased in the name of one person, the Court needs to decide whether it was intended that the other person would have any share of it. If so, the Court must decide the amount of that share and the common intention has once again to be deduced from their conduct. This is explained in more detail below.
Resulting and Constructive Trusts
It is often said that an unmarried couple live together as ‘common law man and wife’. This is not however correct and the legal position for unmarried couples can often be complex.
The main two legal concepts are known as Resulting and Constructive Trusts. These are relevant to a court where it has to decide whether someone has a share in a property when the legal title is registered in the sole name of someone else.
Resulting Trust
A ‘resulting trust' arises when the non-owner has made a direct financial contribution to the purchase of the property registered solely in “A”'s name. It is important to have evidence of this payment and to show that this contribution to the purchase was not intended to be a gift or a loan.
A resulting trust means that the legal owner holds either all or part of the property on trust for or for the benefit of the other person. If a resulting trust is determined to exist, the court will then need evidence to calculate the precise share in the property based on the amount of the direct capital contribution, proportionate to the purchase price. However, they may also then look at wider factors, and hence this area needs a solicitor with experience in this area of law.
Constructive Trust
A ‘constructive trust’ is a more complex area of law and happens when there is an agreement, arrangement, understanding between the two parties. This can happen either when there is an express agreement and when there is not. The Court will look at all the evidence in determining the share of each party:
An express agreement may occur when set out in a formal document and signed by the legal owner and obviously gives much better evidence to show the intentions of each party. However, it is usually the case that the intentions are only spoken in conversations and this means that evidence needs to be given and it is one party’s word against the other. When this occurs, it is also necessary for the person claiming a share in the property to have acted to their detriment or to have altered their position by relying on the agreement, arrangement, understanding or promise.
Where there is no such express agreement, the Court may look at the conduct of the parties in relation to the property, which is called ‘imputing a common intention'. If the person claiming a share contributed directly to the payment of mortgage instalments, or to payments for a substantial improvement to the property, the Court may infer that this must have been as a result of a common intention to share the property. Indeed, it would be very unusual to pay another person’s mortgage for no financial gain. The contributions of a substantial nature and once again this can be a complex area needing the expertise of an experienced solicitor. Our legal experts Anthony Vingoe and Marc Hartnell regularly deal with complex cases of this nature.
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