The ownership of jointly owned property can be a minefield. People can own it in all sorts of different capacities, all of which have different results if they fall out or want to sell the property.
So, first of all, what happens if two people who are not married buy a property together? You might assume that the property would be purchased in joint names, but quite often for one reason or another, perhaps one of them has a bad credit history and so can’t get a mortgage, it is actually bought in the name of one only. They might not think much about this at the time, but say after five or six years they fall out, the person whose name is not on the title deed does not legally have any claim to the property, even if they put money into the purchase from the outset and/or have paid the mortgage and/or have helped the other person to pay the mortgage by paying other household bills. Unless their interest in the property is protected by a Declaration of Trust, or there is some other overwhelming evidence of their contribution then unfortunately, they have lost out. So a simple omission can have devastating consequences. In any dispute the person not on the title deeds would have great difficulty in establishing any kind of legal ownership.
So what is a Declaration of Trust and how does this alter things?
If the property was legally in the name of one person, a Declaration of Trust may say that in fact it is owned by that person plus the other in equal or any percentage they choose to name. Or if two people who are not married buy a property and one party contributes nearly all the purchase price they might decide between them that although it is purchased in joint names, if it is sold the sale proceeds are not going to be divided 50/50, because this doesn’t accurately reflect their contribution, they should actually be divided, say 90% to the contributing party and 10% to the other. Without a Declaration of Trust saying this, if the property is owned in joint names the presumption is that it is owned on a 50/50 basis. Similarly if the property is in the name of one of them only, then the presumption is that it is totally owned by that one person.
Another situation may be a couple who are married but the property is only in the name of one person – what does that mean? Well because they are married it does not mean that it is the property of one person only, marriage changes things legally. The fact that they are married means that the property is actually owned by both of them, it is matrimonial property, even if it is in the name of one person only. The other person has acquired rights in that property just by being married, even if they have never contributed or even lived in that property.
So jointly owned property can mean all sorts of things. It is important to decide from the outset what you actually mean by jointly owned property, how are you actually buying this property – make sure you get proper advice and purchase your property through a solicitor who can discuss all the relevant options with you. Don’t forget that whatever reason you may have had for getting married, it has legal consequences and it will affect the way you own property.
For more information please visit our website: www.cotswoldfamilylaw.co.uk or contact Nicky Gough on 01608 686590.