Dr Rowland and Ms Blades, then an unmarried couple in their 50s, had acquired the property in their joint names in 2009 as a weekend retreat. The purchase price was £1,550,000. Dr Rowland paid the whole of the purchase price and all the other costs associated with the acquisition. There was no stand-alone declaration of trust document.
Not long afterwards, the relationship began to break down when Dr Rowland formed a liaison with another woman.
Ms Blades continued to use the property as a weekend retreat. Dr Rowland did not use the property at all. Occasionally Ms Blades invited him to provide her with dates when he might want to visit the Property. However, any invitation was always subject to the clear proviso that Dr Rowland was not to attend the property with his new partner. Dr Rowland acknowledged Ms Blades' sensitivity around this subject, and agreed not to take his new partner to the property.
Dr Rowland brought a legal claim against Ms Blades for:
- A declaration that he owned 100% of the equity in the property.
- Compensation (known as occupation rent) for the period where Ms Blades had enjoyed sole use of the property to Dr Rowland’s exclusion.
The court approached the case as a domestic one. So, given that legal title to the property was held in joint names, without an explicit declaration of beneficial interests, there was a presumption that Dr Rowland and Ms Blades each owned 50% of the equity. Such a presumption can be rebutted by showing that the parties had a different common intention when the property was first acquired or that they formed a different common intention at a later date, providing that there is detrimental reliance. Detrimental reliance is discussed in more detail in our previous article, Can I bring a claim against my ex-partner for a share of the property’s equity?
After hearing the evidence, the court held that:
- The parties each owned 50% of the equity in the property. The court was satisfied that Dr Rowland did in fact understand and intend that he and Ms Blades would each own 50% of the equity. Dr Rowland and Ms Blades had signed their solicitor's ‘Joint ownership of property form’ (circling the option ‘joint tenants’). The Land Registry transfer form (TR1), signed by the parties, contained an express declaration of trust stating that the parties were to hold the property as joint beneficial tenants. The court dismissed Dr Rowland’s alternative case that the parties’ interests in the property had become unequal post-acquisition. So, Dr Rowland failed to rebut the presumption of a 50:50 split in the equity.
- Dr Rowland was entitled to an occupation rent of £59,958. The court decided that Ms Blades' use of the property to the exclusion of Dr Rowland was, on average, for three days a week (being a Saturday and a Sunday and either a Friday or a Monday) for a period of six years. Therefore, the appropriate calculation was 6 years x 52 weeks x 3 days x the appropriate daily rate x 50%. In arriving at the appropriate daily rate, the court relied on expert valuation evidence.
The following lessons can be taken from this case:
- Just because one party pays all or a larger share of the deposit/ purchase price, this does not mean that they are necessarily entitled to a larger share in the property.
- If you and your partner are unmarried, it is prudent to enter into a declaration of trust when purchasing a property together. This is particularly true if you are contributing unequally towards the purchase price. A declaration of trust records the financial arrangements of everyone who has an interest in the property, detailing what share of the property they own and what should happen in various circumstances, for instance if all owners agree to sell the property or if one owner wishes to buy out another. Birketts is well placed to assist you with the drafting and interpretation of such documents.
- If your relationship with your partner breaks down, and one of you is effectively excluded from the property, then the other may be entitled to compensation. Birketts is well placed to advise you on your legal rights and options in circumstances such as these.
Would a live in partner have rights to my property?
A live-in partner does not automatically have rights to your property. It depends on whether the live-in partner has acquired a beneficial interest in your property. In some cases this will be easy for them to establish (for instance if there is an express declaration of trust, or if they have contributed towards the purchase price or mortgage).
If they have a beneficial interest, then they are entitled to a share in the proceeds. Also, depending on the purposes of the trust, they may have a right to reside there.
If your live-in partner has made no significant financial contribution towards the property, and if there is no declaration of trust, then it is unlikely that they will have a beneficial interest in your property or an automatic right to reside there.
People who reside in residential properties (even those who have no rights in the property per se) have certain rights under the Protection from Eviction Act 1977. If you wish to remove your ex-partner from your property, please get in touch and we can assist you with serving the appropriate notice.
Can I claim half of my partners house?
You would first need to establish that you have acquired a beneficial interest in the property.
If you succeed with this, it does not necessarily follow that you are entitled to 50%. If there was an express agreement between you and your partner as to the size of your share (for instance, if you agreed to a 10:90 split), then you would probably be entitled to 10% of the beneficial interest in the property and no more.
Where no express agreement was ever reached between you and your partner as to the size of your interest, it can be very difficult to quantify your respective interests in the property. If your case went to Court, the judge would try to ascertain the common intention of the parties during their whole course of dealing in relation to the property, and reach a conclusion on the basis of what is perceived to be fair.
Example: in the High Court case of Aspden v Elvy in 2012, the claimant (the non-legal owner) had made substantial financial contributions to the cost of converting the property. The defendant (the legal owner) argued that she was the sole beneficial owner. The judge held that the common intention of the parties (objectively ascertained) during their whole course of dealing was that the claimant should acquire an interest in the property of 25%.
If you require any further information on property disputes of this nature, please contact Stephanie Butler on 01473 406312 or [email protected].
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at May 2021.