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Getting back what you put into your co-owned property

Posted by , Solicitor

The last thing unmarried couples who have bought a house together tend to think about is “what happens to the house if it all goes wrong?” What if your relationship breaks down? Will you get back what you put in financially? It’s not the most romantic of topics!

Property Co-Ownership

Often people only seek advice in this area when it’s too late – perhaps after they have paid all, or the lion’s share of the mortgage for several years,  after they have paid for the new kitchen or after things have gone wrong in their relationship.

Generally the advice they get at that point is that if there is an express declaration of trust (the standard conveyancing forms include a very basic express declaration which many people do not realise) then they are stuck with it. If your agreement says the house is owned 50/50, then that’s it. The equity after sale will be divided equally with no room for argument. Or is there?

An equitable account

An express declaration is normally definitive as to co-owners’ equal share in the property. It leaves very little room for arguments that the beneficial shares should be different. However, a recent High Court case, Davis v Jackson, re-confirmed that the court can, in some circumstances, order an “equitable account” should be taken.

This, put simply, is a way for the court to allow credit to the person who paid the mortgage or paid for the new kitchen against their co-owner. It allows for a fairer or more “equitable” result and can mean the sale proceeds are adjusted before being paid out to the co-owners.

So whilst their equity in the property may be fixed 50/50, it allows some flexibility and room for fairness in terms of the actual cash each co-owner ends up with.

This in an important point to consider when things have gone wrong and where, as often happens, one person wants to buy the other out. How much should they pay? An express declaration particularly a basic one, is not always the end of the story. Often, the possibility of an equitable account is not even considered at this point but, it should be.

What should I do if I have a property co-ownership dispute?

Our advice would be to seek specialist legal advice at the early stages of any co-ownership dispute.

Even better, if you are embarking on a purchase with your partner, speak to your conveyancing solicitor about the best way of owning your house so it will suit your circumstances and plans. Perhaps consider a fully detailed declaration, either when you buy, or before you commit a large amount of your own money to improvements. That way, the need for the court to be involved at all, or to rely on its discretion, should be avoided altogether.

For further information on tackling an express declaration of trust on your property contact specialist lawyer Calum Campbell on

01793 847 698     Email uscalum.campbell@roydswithyking.com

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