2nd November 2015
The question often arises, when a relationship breaks down and cohabitees go their separate ways, whether a party whose name is not on the deeds to a property nevertheless owns a share. Today the issue arises not only between couples whose relationships have ended, but also between friends, family members, business partners and others, who have shared living or working space on all sorts of informal, quasi-legal arrangements, perhaps with a view to stepping on to the property ladder, or getting a business off the ground.
Despite the fairly widespread continued misconception of the common law spouse, the law is clear:
In Capehorn v Harris  the Court of Appeal has provided welcome, practical clarification of the two-stage test which the court will deploy in personal relationship cases to determine the existence, and extent, of a common intention constructive trust.
In the context of investment properties or other sharing arrangements, the legal position can be more complex. Where a property is purchased by one family member for him/her to live in along with another member of the family, the Capethorn common intention constructive trust analysis is likely to govern any beneficial ownership dispute. Where, however, a party or parties has/have purchased a property not as a home but with the primary purpose being investment and another family member, friend or partner claims an interest or a dispute arises as to the extent of any beneficial ownership, a resulting trust analysis may apply instead . In those circumstances, any beneficial ownership may be quantified by reference to the parties’ respective contributions to the purchase price, or otherwise/subsequently to the value of the property.
Following the downturn in the global and national property markets post-2007/2008, people have increasingly purchased, shared and invested in properties in ever more wide-ranging and varying circumstances. As relationships and familial and business arrangements come to an end or change over time, it is likely that the courts will encounter beneficial ownership disputes pursuant to myriad different arrangements and so any clear case law, which can assist with the timely and cost-effective resolution of disputes, is to be welcomed by lenders and lawyers alike.
 Stack v Dowden  UKHL 17, para. 10
  EWCA Civ 955
 Laskar v Laskar ( EWCA Civ 347