Fraud in the context of property ownership disputes 

Our Home Ownership Disputes Team frequently encounters cases where one party seeks to establish an interest in property in reliance on a document which the other party insists they never signed. These disputes typically revolve around whether the document bears genuine signatures from both parties or if any of the signatures have been forged. 

Legal ownership vs beneficial ownership 

These disputes involving authenticity of signatures often arise because it is possible to acquire rights to a property even if you are not named on the deeds as a legal owner. This is due to the distinction between legal ownership and beneficial ownership of a property. 

The legal owner(s) will hold the property on trust for the beneficial owner(s) and will not necessarily be the same as the beneficial owner(s). As trustees, the legal owners can control what happens to the property, including whether it should be sold. However, it is the beneficial owners who get to keep the sale proceeds and, in most cases, will also have rights to occupy the property.  

Express declaration of trust 

The most straightforward way to establish that a property is subject to a trust in this way is by creating an express declaration of trust. A declaration of trust is a document that sets out how the beneficial interest in the property is to be held, for example to whom the equity in the property belongs and in what shares. To satisfy the formality requirements of a trust, a declaration of trust must be in writing and signed. It can be a stand-alone document, but frequently people enter an express declaration of trust simply by ticking one of the options within panel 10 of the Land Registry’s Transfer Form (TR1 or TP1) when purchasing a property in joint names.  

An express declaration of trust will be binding on the parties and is usually conclusive evidence of how the sale proceeds should be divided. It will not usually be affected by subsequent changes of circumstances, for example, if one party starts to pay more towards the property than had initially been envisaged. However, see our article ‘Nilsson v Cynberg: express trusts over property and the validity of subsequent oral agreements’ about a recent case which confirms that informal agreements can vary an express declaration of trust.    

Declarations of trust do not have to be prepared by solicitors (although this is generally advisable). This means an express declaration of trust can be prepared by the parties themselves, which unfortunately makes them susceptible to potential disputes about whether the signatures are genuine or fraudulent.  

How Birketts can help 

Birketts has considerable experience in advising clients facing such disputes. One such client had a valid, express declaration of trust which provided that the property was to be held solely for our client’s benefit. We sought a declaration from the court that the property belonged exclusively to our client in accordance with the express declaration of trust. Our client’s ex-partner sought to defend the claim, relying upon several subsequent ‘declarations’, which purported to give him an equal share in the property. Had those declarations been genuine, they would have superseded the earlier declaration and the most recent of the declarations would have been binding. However, we successfully argued that the more recent ‘declarations’ relied upon by our client’s ex-partner were fraudulent on the basis that our client’s signature on the deeds had not, in fact, been written by our client.  

These cases are fact specific and require expert evidence to be given by a person specialising in forensic handwriting analysis. Typically, the handwriting expert is jointly appointed by the parties and will analyse agreed examples of the person’s signature alongside the disputed signature(s) before reporting on their authenticity.  

To help minimise the potential for dispute, we advise that declarations of trust are prepared by solicitors. This is not only because a solicitor is able to produce a more comprehensive agreement, but also because it would be harder for a party to argue that their signature is not authentic where they have been in communication with a solicitor about the document and the process has generally been overseen by a solicitor. The solicitor can then be called to give evidence, confirming that the document was indeed signed by the relevant person(s), if a signature is later called into question.  

If you would like further advice on fraud in the context of home ownership disputes, or property disputes generally, please contact the Home Ownership Disputes Team.