Continuing on the Halloween theme, family associate Harriet Collins advises on "nightmare" legal issues that can arise following a divorce or separation.
Our third and final “Halloween nightmare” involves a property dispute between an unmarried cohabiting couple:
“You purchase a property with your partner in joint names though you each contributed different amounts to the purchase price. You agreed at the time of purchase that if you were to ever separate the property would be sold and you would share the sale proceeds in accordance with your initial contributions. This was a verbal agreement between you that you did not document. It is now a few years later and sadly your relationship has come to an end. You’ve agreed to sell the property but there is a dispute as to how the sale proceeds should be split between you. You wake up in a cold sweat…”
Luckily it was just another Halloween nightmare, but how can this scenario be avoided?
The ownership of a property can be a complex matter. The legal ownership (the names in which a property is held) may be different from the beneficial ownership (this is who has a financial interest in the property). Whilst a property may be legally held in joint names, the beneficial interest can be shared in different proportions.
When it comes to dealing with a property, if there is a dispute and you are unable to reach an agreement (whether with the assistance of a solicitor or through different forums such as mediation or arbitration), then you may have to make an application to the Court. Court proceedings dealing with property disputes are often time consuming and can be very expensive.
To avoid finding yourself in this situation, you should consider taking legal advice when purchasing a property (or even moving into someone else’s property) and documenting any agreement you reach. An agreement can be recorded in a Declaration of Trust. This is a legally binding document that records the intention of co-owners and can be relied upon if there is ever a dispute about the property in the future.
Here at Russell-Cooke, we are able to advise you about the ownership of property and we can assist with preparing Declarations of Trust.