Chapter 4: Trusts of family home

• On the divorce of a married couple or on the dissolution of a civil partnership, the court has wide powers to make property adjustment orders dividing the family home
• On the separation of a couple who were cohabiting but were neither married nor in a civil partnership, the court's power is more limited; they will apply legal and equitable principles to determine how to divide family assets
• The family asset most commonly in dispute is the couple's home
• If the home is owned jointly, difficulties of quantification of shares may arise
• If legal title to the property is in the sole name of one of the parties, the 'non-owning' party will wish to claim a share by establishing that the legal owner in fact holds the property on trust for both parties
• This may be achieved by establishing the existence of a constructive trust
• Joint tenants


  Own equally and have a right of survivorship
• Tenants in common


  Hold equitable interests in property in equal or unequal shares
• Express Declaration of Trust

  1. Tenants in common

  2. Joint tenants
• Express Declaration of Trust - Tenants in Common

  • Alice and Bert were close friends. They purchased a house together as joint legal owners. Alice provided 70% of the purchase price and Bert provided the rest. The property transfer form declared that Alice and Bert were beneficial tenants in common with each having a one-half interest.
• Express Declaration of Trust - Joint Tenants

  • Alice and Bert purchased a house together as joint legal owners. Alice provided 100% of the purchase price and paid by cash. The property transfer form declared that Alice and Bert were beneficial joint tenants of the property.
• Presumption of joint and equal equitable interests

  If the legal title is registered in the names of both parties but there is no express declaration of trust
• Proving Common Intention


  1. Advice received by the parties or discussions they had at the point of purchase

  2. The purpose for which the property was purchased

  3. Their motivation for purchasing the property jointly

  4. The nature of the relationship between the parties

  5. Whether there are children of the relationship for which the parties have a responsibility to provide a home

  6. The way in which the parties arranged their finances

  7. The way in which the parties paid bills and other outgoings in relation to the property

  8. The reason why one party was authorised to give a valid receipt for capital monies
• Express Declaration of Trust (sole legal owner)


  A signed writing is required to evidence the trust in favour of the non-legal owner
• Proprietary Estoppel


  • A representation was made or an assurance was given to the claimant
  • The claimant relied on the representation or assurance
  • The claimant incurred some detriment as a consequence of that reliance
• Proprietary Estoppel


  • A farmer invited his nephew to come and work for him on the farm on the promise that the farm would belong to the nephew when the farmer died. The nephew worked on the farm for over 23 years for little wage.
• Common Intention Constructive Trust


  • The parties had a common intention, either express or inferred, that the claimant should have an equitable interest in the property
  • The claimant relied to his detriment on the common intention
• Establishing Express Common Intention


  There were actual discussions between the parties which led the claimant to this belief
• Express Common Intention


  • Bill moves in to live with Jane at her house. Jane tells him that he need not worry that the house is registered in her name alone as she regards it as belonging to them both.
• Establishing Inferred Common Intention

  1. Direct contribution to the purchase price

  2. Mortgage payments

  3. Payment of household expenses made specifically to enable the legal owner to make mortgage payments

  4. Substantial renovations to the property by one party
• Inferred Common Intention


  • Carol and Donald decide to buy a house together. Carol contributes £20,000 and Donald pays £80,000. They live together for 10 years, paying equally towards living expenses and mortgage payments.

  1. Jack moves in to live with Sarah in her apartment. They agree that Jack will pay all their joint living expenses so that Sarah can continue to pay the mortgage.
  2. A couple purchase a house in need of renovation. One party is the legal owner. The other party uses an inheritance of £100,000 to fund the house renovations.
• Detrimental Reliance


  The claimant has significantly altered their position in reliance on the agreement
• Quantification of Claimant's Share

  1. The court attempts to infer the parties' intentions

  2. The court will normally give an express agreement effect, but the share agreed can be varied if the subsequent behaviour of the parties would make the share inappropriate

  3. If there was no express agreement, the court must infer an intention from the parties' conduct or impute an intention to the parties through their "whole course of dealing"
• Quantification of Claimant's Share

  • In the case of Carol and Donald, the court might decide that, given the parties had shared all expenses equally over 10 years, their conduct showed evidence that they intended to share the equitable interest equally and award Carol a 50% share.

  1. Two friends bought a property together with an express agreement of 50:50 ownership. One of them alone paid the mortgage contributions. The court may vary the express agreement by inference and give that party a greater beneficial share.