Establishing A Beneficial Interest In Property

Many non-married couples may decide to purchase a property together and register both their names as legal owners on the title deeds.

If they are contributing different amounts to the purchase price they may also want to record their contributions and therefore the proportions of the property they own in a declaration of trust. That way when the property is sold they will get a respective share of the net proceeds.

A declaration of trust is also a useful tool to protect one partner's beneficial interest in the property, if for whatever reason they are not registered as a joint legal owner.

However, if none of these steps have been taken then the non-legal owner may look to establish a beneficial interest in the property in the following ways:

1. To establish a common intention constructive trust

   There must have been a common intention to share ownership

   This is to say that there was a common intention for one of them as legal owner to hold the land on trust for the both of them. This can only be achieved by evidence of the parties' actual intentions, express or inferred, ascertained objectively (Thompson v Hurst). In a straightforward case a declaration of trust would be express evidence of the parties' intention and agreement to share ownership of the property in the terms stated.

   In cases where there is no evidence of an express written or oral agreement, arrangement or understanding between the parties, a common intention to share the property can be inferred from the parties' conduct, which includes:

   Contributions to the purchase price and/or mortgage Direct contributions to the purchase price by the partner, who is not the legal owner, whether initially or by payment of mortgage instalments, will justify the inference necessary to create a constructive trust (Lloyds Bank v Rosset). Contributions to outgoings including food and entertainment The necessary common intention could not be inferred from a partner's natural concern with the well being of the household (Burns v Burns). The partner's contributions to outgoings may be explained by the fact that the parties were making their lives together, rather than by the belief that a greater interest in land was being acquired (Morris v Morris).However, the House of Lords has stated that a wide view should be taken of what amounts to a contribution to the acquisition of a property (Stack v Dowden) and the parties' whole course of conduct in relation to the property must be taken into account...