Property Law: Co-Ownership Of Land
Trust. What comes to mind when you see that word?
Well, trust can be a rare commodity these days. Gone are the days when “spitting on palms” and “shaking on it” was enough to go on. Usually something in writing is a better way forward.
In a similar way, when it comes to the co-ownership of land, Trusts are one of the ways the law comes in to try keep things above board.
But what kind of Trusts?
A Triad of Trusts
If you are married or living together, the property/land is held on trust.
There are three ways a trust can be applicable – Implied Trusts, Express Trusts or Proprietary Estoppel.
Estoppel, you say? What in heaven’s name is that?
Let’s get into the nitty-gritty of these three ways co-ownership of land can be shown.
Implied Trusts
In this case no written agreement is necessary for this type of trust to be in place and they can be divided into two categories: Resulting and Constructive Trusts
Resulting Trust
A Resulting Trust is formed when a person makes contributions towards the purchase price of the property/land. It is then logically presumed that they have an invested interest in this property/land.
However, this can change should there be evidence of the opposite.
The property/land is then held by the legal owner on a Resulting Trust for those that have contributed to the purchase. This is usually in the case of a married and unmarried co-habiting couple.
Constructive Trust
A Constructive Trust is one that is imposed by the court when:
- There is an express or implied bargain* or shared purpose between both people
- Either person has relied on this shared purpose
- The property has been dealt with in a dishonest or unfair way by one party to the detriment of the other (depriving them of their rights with regards to the property). This can be by having stolen it or possessing it by means of fraud
*Express bargain is an agreement/understanding in the way the property is to used or shared which is to be communicated between all parties.
*Implied bargain is when one party makes a contribution to the purchase or pays some of the bills related to the property eg. mortgage repayments
Express Trusts
These come about in two ways. Either by:
- Declaration of self as a trustee
- Transfer of property to trustees
For an Express Trust to be enforceable it must be confirmed in writing after oral agreement.
Proprietary Estoppel
A father promises his son that he will give him the family property and, relying on that promise, the son decides to do a lot of costly renovations on the house in the belief that he would own it in the future. If the father decides to give the property to his daughter in the end, the son could have an estoppel claim against his father (or his father’s estate).
Hopefully this has shed some light on the subject. Of course these things can become more complicated in reality so if you have any questions, please feel free to get in touch!