The Importance of Declarations of Trust

5 Nov 2018

The recent decision in the case of Culliford v Thorpe [2018] EWHC 426 (Ch) serves as a reminder to cohabiting unmarried couples of the importance of agreeing to a declaration of trust where their interests in a property are shared.

In this case, a co-habiting couple, Mr C and Mr T agreed that a property that was in Mr C’s sole name was to be shared between them yet nothing was put in writing. Mr C subsequently died leaving no will and there then ensued a battle between Mr T and Mr C’s estate. The estate issued possession proceedings requiring Mr T to move out of the property. They claimed he had no interest in the property and Mr T was only living in the property as Mr C had permitted him to do so.

On the other hand, Mr T claimed that he had a beneficial interest in the property and there was a common intention that the property was to be shared. He relied on the argument of the “common intention constructive trust”. This can arise where both parties intended to share a property but where nothing is put in writing. The difficulty Mr T experienced was that the person who could verify his story had passed away and therefore there was nobody to corroborate the common intention.

Nevertheless, such cases are very fact-specific and after considering the evidence the Court agreed that as a matter of fact there had been a common intention that the property was to be shared between Mr C and Mr T.

Mr T was lucky but the best way to avoid such litigation is to ensure that your intentions are set out in writing in a Declaration of Trust which is signed by both parties.

Our property lawyers at Osbornes Law can assist you to draft a Declaration of Trust. To speak with our property lawyers on this or any other issue contact us by calling on 020 7485 8811 or fill in our online enquiry form.

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