The law on beneficial ownership for unmarried couples is well laid down in the cases of Stack v Dowden (2007) and Jones v Kernott (2012).
They set out the following principles:
- The starting position is that equity follows the law
- This presumption can however be displaced by showing that the parties had a different common intention when the property was first purchased or that they formed a different common intention later on
- Each case will turn on its own facts.
- The task is to ascertain the parties’ share intentions, actual, inferred or imputed, taking into account their whole course of conduct in relation to the property
- Many more factors than just financial contributions may be relevant to finding the parties’ true intentions
They are usually applied in ‘domestic’ circumstances where a property is purchased as a home rather than an investment.
The recent case of Rowland v Blades (2021) concerned the application of these principles where a property was purchased as a holiday home rather than a family home.
Rowland v Blades (2021) – The Facts
Dr Rowland and Ms Blade started a relationship in 2006. Dr Rowland was separated with a daughter and Ms Blade was divorced with no children. They each owned and lived in their own respective properties and maintained separate bank accounts/finances.
In March 2009 they purchased Tadmarton House, a 3 storey country house with 9 bedrooms, for £1,550,000. It was to be a holiday and weekend home for the unmarried couple.
Dr Rowland paid for the purchase (without a mortgage) and all associated costs. The Property was in registered in their joint names.
In late 2009 the relationship broke down as Dr Rowland had an affair, although they remained in contact until 2011.
Dr Rowland’s case was that he was 100% beneficially entitled to the Property.
The court primarily preferred the evidence of Ms Blade, and that of the conveyancing solicitor instructed at the time (Mr Palmer).
The Property was intended to be a joint purchase and if Dr Rowland had different intentions (at the time or later on) he did not communicate this to Ms Blades and so it was not a common intention.
It was also found that he had effectively gifted 50% in the Property to Ms Blades even though he may have regretted his generosity subsequently especially when the relationship broke down.
The following were pertinent evidence which the court relied on in coming to their decision:
- The parties confirmed in a Buyers Questionnaire the intention was to live at the Property (rather than as an investment)
- The parties confirmed to their solicitor that the property was to be held as joint tenants (after advice on the different forms of ownership) in a form as well as an e-mail (from Dr Rowland)
- At a meeting with the solicitor advice was re-iterated and the parties’ agreement on joint ownership was re-affirmed. The parties were given a cooling off period but did not change their minds about ownership
- Dr Rowland was a generous man and a man of substantial means
- The parties were very much in love at the time of the purchase
- Ms Blades contributed in excess of £100,000 toward the costs of running and maintaining the Property. The fact that Dr Rowland contribution over £200,000 were merely reflective of the fact that he was wealthier and could afford to contribute more than Ms Blade. They both contributed on the basis of their understanding that they both had an interest in the Property.
The declaration of trust part of the TR1 form was not completed by the parties (as is the norm) but the solicitor later based on assumed instructions.
It is clear that even if a property is purchased as a holiday home instead of a conventional family home, the same principles can apply.
You have to be very careful when purchasing a property with your partner about what you are intending in respect of ownership especially if contributions are unequal.
To avoid these problems arising at a later date, it is always advisable to have a Declaration of Trust drawn up to properly document the intention of the parties at the time of purchase and to set out what should happen if the relationship fails and the parties want to go their separate ways.
If you’re seeking legal advice relating to jointly owned property disputes please call our highly experienced property dispute experts on 0808 252 5231 to talk through your situation with us. Alternatively, you can request a call back online.