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Couple Buying a Home? In Joint Names or that of One Party Alone

18-Jul-2018


In last Friday's Chronicle there was a report on a survey carried out in Gibraltar which showed that 31% of the people on the property ladder surveyed thought the only way possible to buy a home was to do so jointly with a partner.  Many of these will be young people venturing on their first home purchase.

Whilst this may be true for economic reasons, it is even more important for legal reasons that a home be bought in the joint names of the couple.    This is not so acutely important where the couple are married and the home is bought in contemplation of or during the subsistence of the marriage and registered in the sole name of one of the spouses.   In the event of the breakdown of the marriage, the non-registered spouse will still be entitled to a share of the matrimonial home, the starting point being at 50% of the value, notwithstanding that the purchase money has been, or the mortgage is being, paid by the registered spouse alone.   

However, given the decline in the institution of marriage, for a non-married couple to buy a home in the sole name of one of the partners is sheer folly and may turn out to be a recipe for problems and loss in the future.  In the event of the partnership breaking up, without the protection afforded by marriage or registration under the Civil Partnership legislation, the plight of the non-registered partner (let’s say the woman) is bleak indeed.

At worse, she may find herself homeless and without legal recourse and the loss of what, perhaps over many years, she has come to know as her home.    In these circumstances, the law offers no solution since the only owner the law recognises is the registered owner.  The only possible course available for the woman to establish a beneficial interest in the home would thus be to rely upon a remedy in equity known as an implied trust, which can take the form of a resulting or a constructive trust.   This can be a complex matter often resulting in prolonged and expensive litigation.

A resulting trust arises where both parties make a monetary contribution towards the purchase of a property but the property is registered in the name of one party only.   Here, the matter is simple in that, on the breakdown of the relationship, the registered owner is deemed to hold that part of the property on trust for the benefit of the non-registered owner equivalent to his monetary contribution.

The matter becomes more complex where the woman partner, for example, has made no direct contribution towards the purchase of the home but may have lived there for many years and considered it as her home and even where there may be children of the union.   In this case she would need to rely upon a constructive trust in order to establish a beneficial interest and have a share in the home in the event of the breakdown of the relationship.   She would need to show not only that there was a common intention in buying the property as their joint home and that she has acted to her detriment in reliance of such intention, but that there has also been a tangible contribution, either financial or otherwise explicable only on such common intention.

There is a plethora of authorities, some of which are conflicting, on this particular point of what amounts to a contribution.  At one end the Courts may require a substantial monetary contribution whereas in different circumstances such things as paying towards household expenses, carrying out work in the home, giving up a career to bring up a family and keeping home may be deemed sufficient as an indirect contribution.

The best advice young couples can have when embarking upon buying their homes if they do not intend to marry is; buy in joint names.