Legal and beneficial ownership and constructive trusts
The Court of Appeal case Oates v Stimson [2006] EWCA Civ 548 highlights the need for advisers when ascertaining parties' interests to consider not only the legal and beneficial ownership of a property but also the potential for a constructive trust to exist.
The case concerned how the equity should be split between two legal owners of a house. The parties had previously reached an oral agreement for Mr Oates to sell his interest to Mr Stimson, whereby the latter met all the outgoings and paid for certain improvements over an eight year period, despite not formalising the sale.
Although the Law of Property (Miscellaneous Provisions) Act 1989 requires a sale of an interest in land to be in writing, the Court of Appeal decided that the conduct of the parties had created a
constructive trust, "rendering it unconscionable not to permit him to enforce the oral agreement".
Therefore, if a debtor falls on hard times and the spouse continues to pay all the property outgoings over time, you need to look deeper than mere legal and assumed beneficial ownership when exploring their respective positions. Is there an earlier oral agreement and a course of conduct between them that affects their interests, and thus their available solutions?
Comments (2) Read through and enter the discussion with the form at the end
I was never married to this guy. We bought a house together 2001 and 2003 he signed a quit claim deed so we could get lower interest on our loan. His credit was bad and the bank would not put him on the loan with me. Now we are split up Oct 2006. He is still in the home and will not leave. I ask him to get a loan and get it out of my name and he can have everything plus equity in the home. He said NO, he is going to f_ _k my credit up, he said and also he said I will sit in the house while you make mortgage payments and laugh. Well that happened until Feb 07 to Sept 07 and judge ordered him to make payments if he was going to remain in the home. He has a lawyer and sueing me for constructive trust and equity. My lawyer does not know much about this issue and I was told to settle out of court that I cannot win. Besides all this in Mar 07 I was moving my belongins out because he was getting rid of some of my belongings like hot tub, patio set so my lawyer said I could get my stuff out. He came in on the last load and started strangling me while I had a broke arm and my daughter was trying to get him off me so he slammed her into the wall after crabbing her arms. He left bruises on her and my neck. We filed assault charges. He did all this in front of my grandson. I also have recordings taped that he left on my cell phone threatening me, my 15 year of grandson, daughter and the rest of my family. He also had his daughter to forge a $3000 check with my signature and he signed underneath, an insurance check on the house because of a basement flood. The check was only in my name. So, my lawyer wants me to settle out of court and told me I had a 30% of winning. I can't seem to choke that down very well. If he wanted the house he should get his sister or parents to cosign with him at the bank, but no he wanted to mess my credit up first and still can't get him out. What do you think about this matter.
Sheila
You have my sympathy. It sounds like you're in a different jurisdiction so the English law points above won't apply.
This may not help much, but what you really need is good local legal advice.