When two or more people purchase a property together, they usually intend to share ownership – but disagreements can arise later about what proportion each person owns.
Our TOLATA specialists regularly advise clients where legal title is owned jointly, but the owners dispute their respective shares in the equity. These disputes require careful analysis of the ownership structure, the parties’ intentions, and how the financial arrangements may have evolved over time.
Forms of joint ownership
When buying a property together, co-owners usually choose to hold it either as joint tenants or tenants in common.
- Joint tenants each own the whole property together. There are no defined shares, and if one co-owner dies, their interest automatically passes to the survivor under the ‘right of survivorship’.
- Tenants in common, by contrast, each own a distinct share of the property – which may or may not be equal. Those shares can be left by will or inherited under the intestacy rules.
At the point of purchase, the parties’ intentions are typically recorded on the TR1 transfer form, or in a separate declaration of trust (sometimes called a trust deed). This document will usually specify whether ownership is joint or in defined proportions.
However, not all purchasers appreciate the legal significance of these choices at the time. As a result, disputes can arise later – particularly upon relationship breakdown – about whether the original ownership arrangement was valid and/or continues to determine their shares in the property.
On other occasions, the TR1 transfer form may be silent on the ownership arrangement.
Disputes about beneficial shares
Even where both names appear on the title, one party may claim that the beneficial shares (the equity ownership) are not as recorded, or that the original understanding has since changed.
For example:
- the parties may have purchased as joint tenants, but it is argued that the joint tenancy was later ‘severed’, thereby converting the ownership into a tenancy in common
- they may have declared equal shares, but one party later contributed significantly more to mortgage payments, improvements or outgoings
- there may have been no express declaration of trust at all, but it is claimed that the parties should have unequal shares because they contributed unequally to the purchase of the property or to subsequent outgoings.
Frequently, the court is asked to consider whether a common intention constructive trust has arisen, either because:
- there was no express declaration of trust at the outset, and the court must consider what, if anything, was discussed verbally or ascertain what was intended based on the parties’ conduct
- the common intention changed after the purchase, and one party acted to their detriment in reliance on that change (for example, by making a lump-sum payment towards the mortgage or paying for major renovations).
How Birketts can help
Our TOLATA specialists provide clear, pragmatic advice in disputes about jointly owned property. We can:
- review the purchase documentation, TR1 form, and any declaration of trust
- analyse financial contributions and relevant evidence of the parties’ intentions
- advise on whether a common intention constructive trust is likely to have arisen
- explore negotiated or mediated settlements wherever possible
- represent you robustly in court proceedings where an agreement cannot be reached.
We act for both claimants seeking recognition of a larger share and defendants seeking to uphold the existing arrangement.
Our experience
- Acting for a client who owned a property jointly with his parents. The parents denied our client’s 50% beneficial interest as recorded in the property deeds. The parents alleged (among other things) misrepresentation and undue influence. Following a summary judgment application, the court declared that our client owned 50% of the beneficial interest.
- Acting for a client whose ex-partner challenged the validity of their declaration of trust and sought a larger share of the property. We successfully negotiated a favourable settlement of the dispute at mediation, which upheld the client’s interest and enabled the property to be sold.
- Acting for a client where there was an express declaration of 50:50 shares, however our client later received a substantial inheritance and carried out extensive renovations. We were able to prove successfully at court that there was a subsequent agreement between the parties that the original 50:50 split had changed, and he achieved a favourable outcome reflective of that additional contribution.
