Co-ownership and Beneficial Interests
The legal owners of registered land are those named as proprietors in the registered title easily obtained online from the land registry. However, sometimes the legal owner holds the property on trust for someone else not identified in the title, who nevertheless has a beneficial interest in the property and the equity. This may, for example, be because someone else paid the purchase price and this is often the case where an unmarried couple purchases a property in the name of only one of them. This can also arise when a group of friends purchases a property together either as an investment or a shared home, or in the case of faith properties, such as Sikh temples, were places of worship are often registered in the name of a chosen few, but are, in reality held on trust on behalf of a wider group. The trustees of charities, investment trusts and landed estates also hold property on trust for others. The trustees are the legal owners, but they are accountable to the beneficiaries.
Disputes often arise where the legal owner denies the existence or extent of a beneficial interest, perhaps because the beneficial ownership of property is not adequately documented, or is not documented at all. Beneficial interests can also be implied, particularly where someone other than the person named in the title has contributed to the purchase price or someone acts to their detriment in reliance upon promises made to them by the legal owner. Disputes also arise in the case of joint owners (usually cohabiting unmarried couples), where one wishes to sell and the other does not, or they cannot agree on how to share the sale proceeds. There can also be issues where trustees have acted or are threatening to act inappropriately.
Co-ownership and trusts
Where legal title to a property is vested in more than one person or entity, those parties hold the property on trust for all those named including themselves, either as ‘joint tenants’ or ‘tenants in common’. Unless a trust deed or declaration has been entered into stating otherwise, the default position is that they will hold as joint tenants. The important distinction between the two is that with joint tenants, if you die, your interest will automatically pass to the survivor regardless of what your will says. This can be big problem in the case of unmarried couples who have split up, but can be remedied by taking steps to sever the joint tenancy.
Property can also be held under various forms of trust on behalf of others not named as legal owner on the property’s title. These may be express trusts created intentionally, usually with professional advice (as is often the case in the charity sector), for example, under a will trust or in a catastrophic injury case. However, in certain circumstances, constructive or resulting trusts can also be implied. This can happen where someone who is not the named owner contributes to the purchase price or invests in the property in some other way in reliance upon promises of an interest in the property. Proprietary rights can also be acquired by way of the doctrine of proprietary estoppel, where, for example, a farmer’s son or loyal employee dedicates their life to working the land on a modest wage passing up a university education or other opportunities on the promise of a future inheritance which never comes to pass.
How we can help
We have extensive experience in helping clients with:
- Negotiating the sale of jointly owned properties where one party is unwilling to sell
- Negotiating the fair distribution of sale proceeds between joint owners and any other interested parties
- Obtaining court orders forcing the sale of jointly owned property
- Obtaining court orders as to how the net sale proceeds should be shared and for ‘equitable accounting’ between the parties to take into account who has been paying the mortgage, who has been living in the property and other factors
- Severing joint tenancies, including tracing and serving co-owners who have ‘disappeared’
- Complying with trustees duties in relation to the management and sale of property
- Disputes as to implied beneficial and proprietary interests
Please note that if you are/were married to the other joint owner or have children with them, we will have to refer you to a family lawyer.