The Law Surrounding Family property and family Assets

Ownership of family assets such as Land

  • Wherever there is a co-ownership of land, such as in a marriage or possible cohabitation, the land is always held on trust.

  • The trust may be expressly created by the parties of the relationship, or this may be implied by the circumstances.

  • Another way in which a person may acquire an interest in land informally is through the application of the principles of proprietary estoppel.

Express Trusts

  • An express trust may arise in two different ways; either by a declaration of a trust by the owner, or by a transfer of the title of the property subject to a trust being created.

  • There is no need for special words to create such a trust but there is a definite need for intention.

  • For a trust to be enforceable it must be declared or re-affirmed (after prior oral agreement) in writing.

Implied Trusts

  • For this type of trust to exist, there is no need to have a written declaration of the parties’ intention.

  • There are two varieties of implied trusts, constructive and resulting trusts.

Resulting trusts

  • These are concerned with the pattern of money contributions to the purchase of the property.

  • A resulting trusts is based on the presumption that where a person contributes towards the purchase price of a property/land they gain an interest in that property/land proportionate to the share they contributed.

  • This presumption can be taken away if there is evidence of an intention to the contrary.

  • As a result of one partner gaining an interest in the property because they contributed towards the purchase price, in law, the legal owner of the property will therefore hold the property on a resulting trust for those who contributed to the buying of the property. 

  • Usually in a marriage this will be the husband and wife, or boyfriend and girlfriend where cohabiting

Constructive Trusts

These types of trusts arise in circumstances where it would be unconscionable and unfair not to give effect to the intention between the parties of a relationship upon which they have based their mutual expectations.

For a constructive trust to arise, there are three requirements.

  1. There must be a bargain or common intention between both parties

  2. Either party must have then relied on that common intention  

  3. And there must then be an unfair denial of a person’s rights within the property.

What is meant by the bargaining element?

The bargain in a constructive trust may either be expressed or implied from the partied conduct.

Express bargain

  • An express bargain means there is an agreement or understanding that the property should be shared in a certain way, or used in a certain way. 

  • This must be communicated between all parties. 

Inferred bargain from actions

A bargain is usually implied where one party either makes a contribution to the purchase price or takes on some bills such as the mortgage repayments.

What is proprietary estoppel?

  • Proprietary estoppel basically occurs where one person assures another person, or encourages them to believe that they will have some sort of interest in the property .

  • Proprietary estoppel steps in to prevent the person that assured they would have an interest in the property from acting against his assurance, basically, forcing the property owner to carry out his original promise.

  • Where proprietary estoppels succeed, the courts have a wide discretion in deciding which remedy can be applied.