Property rights unveiled: Can you make a claim without tying the knot?

Contrary to popular belief, ‘common law marriage’ does not exist. As a result, unmarried couples do not have the same rights as married couples. Merely living together or having children with a partner does not grant the right to make claims on each other’s property, regardless of the duration of the relationship.

When it comes to property ownership, the distinction between legal and beneficial ownership is pivotal yet often misunderstood. Legal ownership refers to the formal titleholder who has the authority to manage and sell the property, as recorded in the Land Registry. Beneficial ownership, however, pertains to the rights to enjoy the property’s benefits, such as proceeds from its sale or the right to occupy it. While the starting assumption is that legal and beneficial ownership align—captured in the principle that “equity follows the law”—this presumption can be challenged.

Through mechanisms such as a declaration of trust, implied trusts, and legal doctrines such as proprietary estoppel, individuals may establish or dispute beneficial interests in a property. This article explores these avenues in detail, providing insights into the nuanced interplay of legal and beneficial rights.

Express declaration of trust

Beneficial ownership can be documented in a separate, standalone agreement signed by the parties, such as a declaration of trust. A declaration of trust serves as binding and conclusive evidence of the parties’ beneficial interests in the property at the time it was made.

A declaration of trust can also be created as part of the conveyancing documentation. When a property is purchased, the buyers and sellers complete a Land Registry transfer form, commonly known as a TR1. The TR1 invites the parties to create an express declaration of trust in panel 10. Though involving a simple checkbox, it satisfies the formality requirements under section 53(1) of the Law of Property Act 1925, making it a legally binding declaration of trust.

A declaration of trust can only be set aside in limited circumstances, such as cases involving fraud, duress, undue influence, or mistake. More information about this can be found in our earlier article: I am a joint owner of a property and there is an express declaration of trust. Is it legally binding?

Common intention constructive trust

If no express declaration of trust exists, a claim for a beneficial interest may still be possible through a common intention constructive trust. This is a type of implied trust, which does not require anything to be in writing. To establish such a claim, the following elements are required:

• A shared agreement or understanding between the parties that you would have an interest in the property; and
• Reliance on that agreement or understanding to your detriment, such as contributing to the mortgage or funding renovations.

As aforementioned, the shared agreement / understanding does not need to be in writing. The court is entitled to find that such an agreement existed with reference to oral discussions between the parties or the conduct of the parties, such as making payments towards the mortgage.

Proprietary estoppel

Proprietary estoppel is a legal doctrine that can prevent a person from reneging on a promise, representation, or assurance if another person has relied on it to their detriment. 

In such cases, the court has the power to enforce the promise or award compensation. For more details on proprietary estoppel, please refer to our earlier article, Were you promised a share in a property which is now being reneged upon?

Resulting trusts

A resulting trust is another type of implied trust and is based on the presumption that those who purchase property intend the beneficial ownership to be held in proportion to their respective financial contributions to the purchase price.

The courts are unlikely to approach the case on a resulting trust basis where the case falls within the ‘domestic consumer context’. A property bought by a couple during the course of their relationship – even a buy-to-let investment property – is likely to fall within the domestic consumer context, meaning the court is more likely to look at the common intentions of the parties under a constructive trust, rather than quantifying their interests in strict accordance with what they each paid.

What to do next?

Property claims of this nature are dealt with under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA). This is a complex area of law, the application of which will depend heavily on the individual circumstances of your case.

The history of your relationship, your discussions and intentions about the ownership of the property and your contributions to it will all be relevant when considering your rights and the prospects of a claim under TOLATA.

If you would like further guidance on claims under the Trusts of Land and Appointment of Trustees Act 1996 or property disputes generally, please contact a member of the Home Ownership Disputes Team.