Supreme Court clarifies approach to property disputes

Posted: 17th January 2012

There have been many cases over the years which have involved the entitlement to shares in a property when an unmarried couple have split up and wished to dispose of it, but there has been no formal agreement about the ownership of it.
Village House
One such case was recently dealt with by the Supreme Court, which made good use of the opportunity to set out the principles to be applied in such cases although the court stressed that each case will be determined on its own facts.
In the absence of any express declaration of trust, the property owners will be considered to be ‘joint tenants’, so that each has full equitable ownership of the property (rather than each owning a defined percentage of the property). If one dies, the other inherits whether or not there is a will and whatever it provides.

This presumption can be challenged if there is evidence that joint tenancy was not in the minds of the purchasers when the property was purchased or that they formed a later intention to change their shares of ownership.

The common intention of the parties will be determined by their conduct.Where it is clear that a joint tenancy was not intended on purchase or that the intention had subsequently changed, but it is not possible to ascertain by direct evidence or inference what the intentions were, then the court will rule that the owners’ respective entitlements will be what is fair depending on their entire course of dealing between them in relation to the property.
The Government is proposing to introduce legislation to clarify the respective rights of the owners in such cases. Until then, the best course of action if you are buying a property with someone else is to take professional advice at the outset and create a form of agreement to ensure the ownership is clear.