Can I Make A Claim For A Beneficial Interest In A Property Where I Am Not Registered As The Legal Owner?

It is common for people to live together where one person may be the legal owner of the property although their intention is that the other person has a beneficial interest in the property, despite that intention not being recorded in writing anywhere.

This can cause problems where:

  • Parties later fall out and the party, who is not registered as the legal owner, wants to claim their beneficial share in the property;
  • If the legal owner dies and they have not made a Will or other provision protecting the other party’s share; or
  • The executor or beneficiaries of the estate do not recognise their interest.

What can I do to establish my beneficial interest in a property where I am not registered as a legal owner?

If the legal owner disputes your beneficial interest, despite it being their intention previously or if they die without ensuring your interest is protected, you can bring a claim for a declaration from the Court of your beneficial interest in the property.

Common intention constructive trust

If you can establish there is a common intention constructive trust, the Court can make an order that the property is owned how the parties intended it. It is for you to prove the intention and so evidence of that intention is crucial.

In establishing that a constructive trust exists, the Court would look at:

  1. The common intention between the parties relating to the beneficial interest in the property; and
  2. Whether you acted to your detriment in the belief that you would be acquiring the beneficial interest in the property.

When establishing the intention, the Court would look at the evidence of that intention, so whether any express declarations were made, and if not, witness statements outlining what was said and agreed, and any supporting documents, such as text messages/letters, if they exist.

You would need to show that you have acted to your detriment as you believed that you owned a share in the property. This can be most obvious in the form of financial contributions, such as paying the mortgage or improvements to the property but also may be via contributions to the family life.

Proprietary estoppel

The principles to establish in a claim under the doctrine of proprietary estoppel are similar to a constructive trust claim but the Court can make a wider variety of orders if you are successful in this type of claim.

These orders can include:

  • Granting the beneficial interest to you in the value that has been determined;
  • Ordering that a lump sum be paid to you;
  • Creating a licence to occupy a property rent-free; and
  • Transferring the freehold title of the property.

This would depend on what is most suitable considering the circumstances of your case.

To be successful in a claim under proprietary estoppel, you would need to establish the following:

  1. A promise or assurance was made to you that you would acquire an interest in the specified property;
  2. That the promise was relied upon by yourself, and in reliance of that promise, you acted to your detriment; and
  3. It would be unconscionable to deny you of your interest after you had acted to your detriment.

The evidence the Court would look at in this type of claim is the same as for a constructive trust above. You would need to show what detriment you suffered in relying on the promise made to you that you would own a share in the property.

There is an additional limb to this test, in that the Court must be convinced that it would be unconscionable, e.g. extremely unfair to deny a person of the beneficial interest they are seeking after they have acted to their detriment.

How Nelsons can help

beneficial interest property

Emma Winfield is an Associate in our Dispute Resolution team.

If you require more specific advice on co-ownership disputes, we can assess your claim and advise on the merits of bringing such a claim to Court. In most cases, parties can settle claims outside of Court in mediation (for further information on mediation, click here).

If you have any questions concerning the topics discussed in this article, please call Emma or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or contact us via our online form.