New Case Enforces The Need For Unmarried Couples To Formally Record Their Interests In Property That They Jointly Own

The Judgement from the Law Lords came out this week on the case of Stack v Dowden. Dehra Ann Dowden and Barry Alan Stack had been in a relationship together since 1975, lived together since 1983 and had four children together during this time. They had purchased a property in their joint names by way of a mortgage and Miss Stack contributed her savings and net sale proceeds from a previous property that she had owned in her sole name.

When their relationship broke down, Mr Stack applied to the court to declare his entitlement in the property. The Judge ordered that he had an equal share. The case eventually came before the House of Lords who decided that the interests were not equal. A 65% share was awarded to Miss Stack from the net sale proceeds with 35% to Mr Dowden. In reaching this decision their Lordships examined the position in relation to jointly owned property and concluded that if there was a clear agreement evidenced, then this would be binding on the parties in the absence of mistake or fraud, or indeed a later supplemental agreement.

In cases such as this one where the property was jointly owned, but there was no declaration as to the ownership of the equity behind the title, the starting point would be to presume an equal equitable ownership, and the onus is on the person alleging something different to prove this.

The moral of the story for purchasers? In order to try to minimise the potential for dispute at a later date, ensure that your interests in a property are formally recorded, preferably in a Declaration of Trust which a solicitor can draft for you. A cohabitation agreement, again drafted by a solicitor will also help. The alternative may otherwise be that a Judge has to decide among other things, what your intentions were at the time of purchase, or throughout your relationship!

Published 27/04/2007.