Legal ownership does not affect who is entitled to the proceeds of the sale
of the home. This is governed by the principle of beneficial interest. This
establishes the financial value owing to each partner if the home is sold.
If only one of the partners is the legal owner, the other (whether married,
a civil partner or a cohabitant) may still be able to claim some of the financial
value of the property. This is because s/he may have a beneficial interest
based on contributions s/he has made to the purchase and/or the intentions
of both partners when the home was bought.
If a couple are joint legal owners, this does not mean that they have equal
rights to the financial value of the home. They may not have an equal beneficial
interest in the property.
Certain people will only have rights because of their beneficial interest.
Partners who are not married or civil partners who are not legal owners can
only have the long-term right to occupy, prevent a sale or obtain any proceeds
of a sale if they have a beneficial interest. This is why it is important
to establish the existence of a beneficial interest.
Rights of a partner with beneficial interest
If a partner has a beneficial interest, this means s/he:-
- has the right to occupy the home. This right can be enforced on a short-term
basis by applying for an occupation order
- may be able to prevent the sale or use of the home as security to raise
- is entitled to a share of the proceeds of the sale of the home based
on her/his beneficial interest.
How to establish the existence of beneficial interest
A written, signed declaration or a formal trust deed which indicates the partners'
intentions about their financial shares will establish that a beneficial interest
exists. Solicitors are supposed to arrange this when a couple buy a property.
If they do not, it may be a failure of professional duty.
If there is no formal statement, the existence of beneficial interest can
be established by applying to court (usually the county court).
The court will look for any evidence of a common intention, which could be
an informal discussion or understanding, as long as both partners are aware
If the court cannot find any common intention, the division of interest will
depend on the amount each partner has contributed to the purchase and/or housing
costs of the home, as long as these were not intended as a gift.
A couple can apply to court for their financial shares in the home to be valued
at any time. It does not matter if one of them has already moved out of the