Rebecca Taylor – Solicitor in our Dispute Resolution department – discusses beneficial interests in property

Cohabiting couples who buy a property together may find themselves in the unfortunate situation where the relationship between them has ended but they continue to share a property together.

In many cases, both parties will be registered at HM Land Registry as the owners of the property. However, in some cases, only one party is registered as the owner of the property.

Regardless of whether the property is registered in one or both party’s names, if both parties have a beneficial interest in the property, there will be a trust of land whereby the legal owner of the property (i.e. the registered owner) holds the property on trust for the beneficial owners.

It is often the case that, on the breakdown of the relationship, one party will move out of the property while the other party remains in occupation of the property. If the party remaining in occupation is able to purchase the other party’s interest in the property (and the other party agrees to sell their interest in the property) then the parties will need to agree how much the paying party is to pay to the receiving party for their interest in the property. Unfortunately, it is often the case that parties are unable to agree their respective shares in the property and thereby how much should be paid for their interest in the property.

If there is a dispute as to the parties share of the property, either party can make an application to the court for a declaration as to the beneficial interest in the property.

It is also possible for one of the parties to make an application to the court for an order that the property is sold and the proceeds of sale be shared in accordance with the declaration as to the beneficial interest in the property (as determined by the court or as agreed between the parties). This may be necessary where neither party can afford to purchase the other’s interest in the property but one of the parties is refusing to sell the property.

If you need any advice in respect of a dispute with a former partner in relation to your interest in a property, please contact Andrew Ryan (Partner and Head of Dispute Resolution) or myself on 0161 832 3304.

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