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Property owned in joint names - but in what proportion?
Introduction
In the recent high profile case of Stack -v- Dowden the House of Lords (England's highest court) made a significant ruling on the subject of cohabitants property rights.
It is already settled law that a cohabitant whose name is not on the property title can assert that he or she has an interest in property owned by their partner. They have to prove contribution and an agreement that they have an interest which may or may not be borne out by the evidence but they are certainly in a position to assert an interest.
The Stack –v- Dowden case looked at cases where property was purchased in joint names which is extremely common these days. It is also extremely common for the parties to fail to make any provision for agreement as to proportions in which they will share the equity if the property is sold and forget or ignore the fact that one of them may have made a much more significant financial contribution to the purchase than the other.
The Stack –v- Dowden case established that the party who made the greater financial contribution can still assert that they are due more than 50% of the equity even though no provision was made at the time they bought the property.
It remains a difficult case to make. The House of Lords made it clear that there would be a presumption in favour of division unless it could be proved they had intended otherwise. They said several times that a successful claim would be "Unusual".
The fact that one party paid more than the other will always be important but not in itself conclusive as to intention. The court will look at all the circumstances including anything said to the conveyancing solicitor at the time of purchase, the reason for putting the property in joint names, arrangements for children and so forth.
If the court does decide to order unequal shares it then has to decide what those unequal shares will be. The guidelines on this are far from arithmetical and really rather vague.
The most difficult issue will remain whether or not the case is sufficiently "unusual" to be able to assert that this is a case for an unequal share and whether or not to take on the risks and costs of litigation.
We suspect there will be a rush of further cases perusing these sort of claims which will give further guidance. Do not rule out the possibility of the Court of Appeal laying emphasis on the references to it being "unusual" to be able to establish more than 50% and thus attempt to close down this particular door to litigation which has been so helpfully opened by the House of Lords.
Ashfords is regulated by the Solicitors Regulation Authority. The information in this article is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.
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