Just because a property is held in the name of a particular person does not mean that he or she is the real owner of the property.

Real ownership (in legal language often referred to as beneficial ownership) may differ from formal or nominal ownership. A property may be held in someone’s name but be really owned by somebody else. This is the basis of the idea of a trust. There are many reasons why someone may choose to hold property in a way which obscures the real ownership of an asset. In some cases the motive may not be at all suspicious: it may just be a matter of convenience – particularly in a family context. The presumption, or starting point, in any enquiry about real ownership is that the formal owner is the real owner. Another presumption is that the real owner is the person who paid for the property. But these presumptions only assist in knowing where to start. They do not necessarily indicate the outcome of an enquiry. It should be remembered that the function of legal presumptions is to make good a lack of evidence. In the end it is the facts, if proved by the evidence, that will decide the real ownership of property.

The question at the heart of any enquiry about the real ownership of property is the intentions of the parties when the property was acquired. If there is a written agreement (eg a declaration of trust) then, in the absence of fraud, that may well put an end of the matter. However, in many cases (including family cases) there will be no such agreement. If it is alleged that there is an oral agreement, the court will need to determine whether there was one, and if so what it was. There are still other possibilities, including whether a tacit agreement can be inferred from the conduct of the parties.

As a law firm we have seen different sorts of informal arrangements that have led to disagreements and disputes, many of them among family members. These range from the case of a successful businessman who “gave” his sons central London flats only for his Estate, on his death, to dispute that they were in fact gifts, to a common situation where a property is purchased in the names of a cohabiting couple and then a dispute arises about their respective shares.

Although the property we have been discussing in this blog is real property the same principle applies to other property, such as shares.

Dewar Hogan specialises exclusively in advice and representation in relation to residential and commercial property issues and disputes, and professional negligence claims against solicitors and other property professionals.