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Joint ownership - HL guidance |
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It is the HL decision in Stack that has focused much recent interest on
the topic of unmarried couples (whether they be in a relationship, or
mere friends) who buy a property together. The case involved a couple
who bought a property in 1993 for £190,000 financed by a joint
mortgage of £65,000, plus the proceeds of sale of their first property of
£67,000 (in her sole name), and £58,000 cash (from a building society
account in her sole name).
The transfer (Form 19(JP)) contained no
words of trust but included a declaration that the survivor was entitled
to have a valid receipt for capital money. There was no discussion
between the couple at the time of their purchase as to their respective
shares in the property.
The trial judge awarded a 50/50 split, but that was altered by the HL to
65/35 in favour of the woman. What the court said was that when there
is a purchase in joint names then the starting point will be that the
property is held 50/50; that is the initial assumption. However, that is
merely an assumption and the shares can be different if one of the
parties can show a contrary intention:
‘Many more factors than financial contributions may be relevant... These include: any
advice or discussion at the time of the transfer which cast light upon their intentions
then [to be found in the attendance note]; the reasons why the home was acquired in
their joint names; the reasons why the survivor was authorised to give a receipt for
the capital moneys; the purpose for which the home was required; the nature of the
parties’ relationship; whether they had children for whom they both have responsibility
to provide a home; how the purchase was financed both initially and subsequently;
how the parties arranged their finances...; how they discharged the outgoings...’
But, it is quite clear that the starting point is an assumption of 50/50.
As the HL said, ‘cases in which the joint legal owners are to be taken to
have intended that their beneficial interests should be different from
their legal interest will be very unusual’.
The solution, of course, is very simple – the conveyancer should take
instructions at the time and, if necessary, prepare a simple declaration of
trust. To fail to do so is surely negligent. Stack v Dowden [2007] UKHL 17.. © Practical Lawyer
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June 2007 |
