Property Matters, Case Study Example

Case Issue

This case concerns the ownership of an investment property purchased in 2005 by two brothers, Denver and Watson. Watson provided £150,000 of the £200,000 appraised value, with Denver providing the remainder of £50,000. Denver did not want to be listed on the title deed then; thus, the estate was only filed in Watson’s identity. Denver covered the property’s maintenance costs and six months’ worth of energy bills in 2010. Denver and Watson are currently alienated due to a domestic dispute, and Watson is in the process of the property’s sale. Denver is curious about his ownership stake in the property and his potential financial benefits from the sale.

Renovations were required in the construction of the house, which Denver accounted for. The utility bills for the property amounted to £8,000; meanwhile, Watson is selling the house for £300,000. It is considered under English law that when two or more persons buy property jointly, they hold it as joint tenants until there is contrary evidence.[1] It means they own the property equally and have an undivided interest. Should one of the tenants die, the surviving owner would take over the deceased’s share of the property (s). Additionally, “The rational in Arjula v. James Monday is that: a husband who marries a woman and builds a house during the pendency of the marriage stands the risk of losing that house if the latter divorces the woman who had children for him and lay claims to joint ownership unless such woman on her own volition leaves the matrimonial home.” Tenancy in common and joint ownership is the two types of shared ventures legally recognised.[2] Each co-owner in a joint tenancy holds an impartial stake in the property and has equal rights to use and possession. “The Court held that an owner cannot bring an action in trespass or nuisance if he relies solely upon the flight of the aircraft above his property.” It allows each co-owner to name anybody they like as the beneficiary of their portion of the asset upon their passing.

However, Denver and Watson did not intend to own the asset as joint owners, and there is no proof to suggest that they did. There is ambiguity as to whether they would be acquiring the property as contracting parties or tenants in common. They probably intended to hold the residence as a joint tenancy, as they did not have a formal ownership discussion or fill out any paperwork. It shows how much of the company each person owns. In a joint tenancy, the property owned by the deceased owner is passed on to the renter’s estate rather than the living tenant (s). Since Denver and Watson are no longer romantically involved, Watson is free to sell the home.[3] In any case, Denver is owed a proportional amount of the sale’s revenues based on the size of his original stake in the property.

Watson is the exclusive owner of the property, making it difficult for Denver to claim it even though Watson is selling it. Denver would own unique and indivisible ownership in the land, though, if they had meant to purchase it as joint tenants. To put it another way, he may get his hands on some of the money made from the transaction. Based on the available data, it is clear that Denver and Watson never discussed who actually owned the property or made any formal claims to it. Denver would have a solid case that he is entitled to a part of the income from the sale if they had discussed property rights and acknowledged that they were acquiring the residence as tenants in common. However, Denver will likely have a harder difficulty presenting his case that he is entitled to a part of the income from the sale because they had not explored the possession of the home and had not signed any papers outlining their shareholdings.

Rule

It is unclear neither how Denver and Watson agreed to purchase the property together nor how they intended to share ownership. However, it is likely that, as they contributed unequal amounts toward the purchase price, they would each own a share proportionate to their contribution. It is known as a ‘contributory’ ownership arrangement. In the lack of evidence to the contrary, Denver and Watson are each considered to own a fifty percent interest in the property. While Watson may have title to the land in controversy, Denver may be able to claim a “beneficial” interest in it due to his financial contributions to the property. These contributions include £10,000 for improvements and six months’ worth of past-due utility payments. Therefore, Denver may have grounds for a claim to a portion of the sale price. Denver and Watson may need to seek a “partition order” from the tribunal if they are unable to reach an agreement on how to partition the earnings from the sale of the residence. A decree will mandate the sale of property with the revenues being split among the owners. The court will consider several factors when making a partition order, including each owner’s financial contributions and ownership duration.

Denver is a joint renter with Watson, such that each of them owns half of the property at this time. The two of them split the cost of the property’s down payment evenly. Fifty per cent of the sale price will be allocated to Denver.

Apply

The jury would certainly consider Denver’s contribution of £50,000 toward the purchase price and £10,000 toward upgrades. The fact that Denver covered the utilities for six months whilst the house sat empty is also likely to be considered by the judge. Watson, Denver’s brother, would contend that since the property is listed in his name, he is the only owner. The jury, however, is likely to consider the fact that Watson did not pay the full cost of purchasing the homes and that Denver did not want Watson’s name on the title at the time of acquisition. Despite not being listed on the legal title, Denver has an egalitarian stake in the property because of the substantial contributions he has made to it. The fact that he has paid the utility bills demonstrates his determination to invest financially in the property.[4] “Denning J held that the full rent was payable from the time that the flats became fully occupied in mid-1945. However, he continued in an obiter statement that if Central London had tried to claim for the full rent from 1940 onwards, they would not have been able to.” The jury will also likely decide that Denver still has an equitable stake in the land, given the circumstances. Given his investments in the property, the court is anticipated to determine that Denver is eligible for a portion of the sale’s revenues.

Conclusion

The best advice that can be given to Denver is to seek legal advice concerning the matter from a competent lawyer. While it is true that Denver and Watson did not discuss the asset ownership nor complete any paperwork regarding their contributions, there is still a possibility that Denver could claim a partial ownership interest in the sale based on his contributions. For example, suppose it is proven that Denver and Watson agreed, verbally or implied, that they would share property based on their contributions. Denver might be able to assert an ownership stake in such a scenario. Additionally, suppose Denver can prove that he paid for repairs to the property and paid the utility bills for a period when the property was not rented out; he may claim that he made a “contribution to the property,” which entitles him to a ratio of the profits from the exchange.[5] Denver may be eligible for a percentage of the sale revenues based on his efforts, even if he cannot claim an ownership stake in the asset. Considering Denver has evidence that he has made substantial contributions to the property, such as by covering the cost of repairs or utility payments, he may claim “equitable compensation” from the sale in that case. A court would typically decide it on a case-by-case basis.

Swettenham Cottage

Case Issue

There are several issues in this case. First, Denver and Petra have not agreed on a beneficial ownership arrangement, meaning it is unclear how the sale surplus should be divided. Second, over the previous five years, Denver has used his salary to pay the mortgage and other expenses on the property, but Petra has only sometimes donated from her freelancing income. Finally, Petra used some of her earnings to pay for redecorating the children’s bedrooms, which may be considered a joint investment in the property.

Rule

According to law, Denver and Petra are in a common law marriage, meaning they are considered married even though they have not had a formal ceremony or obtained a marriage license.[6] This type of relationship is recognised in the UK. To be considered married, the couple must live together for a certain period and must present themselves to the world as a married couple. In this case, Denver and Petra have been living together for ten years and have two children together, so they would likely be considered married under common law. Common law marriage has many benefits, including the ability to file joint tax returns and inherit from each other. However, it is not without its flaws. One major problem is that it might be difficult to verify that the connection exists without a special ceremony or marriage license. If the duo intends to divorce, they will need to provide evidence that they were legally married, which can be difficult. Unfortunately, the pair will not enjoy the same legal protections and benefits as married people because no official ritual or marriage certificate has been obtained; they cannot apply for things like Medicare or Social Security together.

Denver and Petra have chosen to separate and sell their home in this case. They have a house buyer asking for £600,000 for it. Denver feels that because he initially put in two times as much as Petra, he should be eligible for two twice the value of the selling earnings. However, it is unclear whether Denver would be obliged to pay twice the value of the selling earnings without a formal marriage certificate or ceremony. Variables such as the partners’ financial situations at the point of sale, the duration of their relationship, and the value of their respective contributions could all affect the outcome.

Apply

The legal position about the ownership of Swettenham Cottage is that, as the property is registered in joint names, Denver and Petra are equally entitled to the property. In other words, the revenues will be split 50/50 between the two if the sale is completed. When deciding who should pay what share of a property’s expenses, repayments, and other costs, it is critical to mind everyone’s financial contributions. Denver and Petra each made a £25,000 contribution toward the appraised value, and Denver has been responsible for the loan and other monthly expenses for the previous five years. Petra has helped maintain the home by footing the bill for occasional child care and by sprucing up the children’s rooms. Notably, in the lack of a pronouncement of ownership interest, the inference is that the parties own the property equally. This asserts that Denver has no superior claim to the land over Petra, regardless of the stance that he has made more contributions throughout the years. Denver and Petra may need to see an attorney or take the matter to court if they cannot agree on how to split the funds earned from the sale of the residence.

If Denver and Petra decide to sell the house, they will need to use the earnings to pay down the mortgage. They may have to take the matter to court if they cannot settle their differences on apportioning the surplus balance. Denver would receive £200,000, and Petra would receive £100,000 based on their respective commitments to the acquisition price of £600,000. Imagine, though, that Denver and Petra have been making the mortgage and other payments on the house out of their pockets for the past five years. Denver may try to argue that he should get a larger chunk of the sale money under these circumstances.[7] If Denver and Petra cannot agree on how to split the selling money, they might have to settle the dispute in court. The court will look at several variables, including the parties’ financial situations, the amount each party contributed to the original cost, the mortgage payment, and other monthly expenses. The court will also consider the needs of dependent children like Sia and Tobias.

When dividing the proceeds of the sale, there are several options that Denver and Petra could consider. One option would be to divide the profits equally, as they are both listed on the mortgage and title to the property. Another option would be to divide the proceeds based on their initial investment into the property, with Denver receiving twice as much as Petra. A third option would be to consider the contributions made by each party during their ownership of the property, including mortgage payments, outgoings, and improvements made to the property.[8] “In achieving an equitable distribution of marital assets in dissolution of marriage cases, the court must “identify, value, and distribute those assets.” Denver has invested more financially in the asset than Petra has; according to the case study, he might be eligible for a more significant portion of the revenues.[9] “Clearly, he had not forgotten the schoolboy maxim “Finders keepers.” But, equally clearly, he was well aware of the adult qualification “unless the true owner claims the article.” However, it is also worth noting that Petra has made significant non-financial contributions to the property, including raising the children and decorating their bedrooms Denver and Petra will have to decide how they think the money should be split from the sale based on their personal values and the specifics of their situation.

Joint custody would have an effect on the property ownership of the case. It includes paying for childcare, food, clothes, housing, education, and other necessary costs. Both parents will also be responsible for spending time with the children and providing them with love and support. If the relationship between Denver and Petra breaks down, they will still be required to fulfill their responsibilities to the children. However, if one parent cannot meet their obligations, the other parent may be required to provide more support.

Conclusion

According to the law, when a married couple separates, their assets are divided equally. For such unions, their assets are not automatically divided equally, and each person is entitled to keep whatever assets they bring into the relationship. In the case of Denver and Petra, they bought the property together, so each person is entitled to half the proceeds from the sale. Denver may feel entitled to a larger portion of the earnings, given that he invested twice as more as Petra. Denver and Petra can ask the tribunal for a pecuniary order if they cannot come to terms on how to split the money from the auction of the house. The jury will apportion the money based on several variables, including how much each spouse contributed to the house’s purchase, how much each spouse helped with maintenance costs, and how much money each spouse needs, along with the requirements of any children involved. The court will likely consider that Denver has been responsible for all property expenses, including the mortgage, for the last five years, while Petra has worked part-time to cover costs like childcare. The needs of the children may be viewed as evidence when deciding how to divide the profits from the auction of the assets.

Denver’s legal counsel is expected to inform him that he and Petra are co-owners of Swettenham Cottage and are each entitled to half of the sale revenues. It is for the simple reason that Denver paid more of the total purchase price than Petra did though there is no proof of an agreement between them. Even though Denver has been responsible for the bulk of the mortgage and other expenses related to the home for the previous five years, this does not modify the fact that they are co-owners. If he feels that he should be entitled to more than half the proceeds, he would need to provide evidence of contributions made toward the property over the years that Petra did not equally share. It could include mortgage payments, bills, and renovations. If he is able to provide evidence of such contributions, he may be able to argue for a more significant share of the proceeds.

Bibliography

Agbo, Ifeoma Lynda. “Palm tree justice and settlement of matrimonial property under a statutory marriage in Nigeria.” International review of law and jurisprudence (IRLJ) 3, no. 2 (2021): 1-7. https://nigerianjournalsonline.com/index.php/IRLJ/article/viewFile/1536/1507

Bernstein of Leigh (Baron) v Skyviews and General Ltd. (1978) QB 479

Buckinghamshire CC v Moran [1990] Ch. 623 (13 February 1989)

Central London Property Trust Ltd. V High Trees Housing Ltd (1947) KB 130

Curtis, Lynn. “Valuation of Stock Options in Dividing Marital Property upon Dissolution.” J. Am. Acad. Matrimonial Law 15 (1998): 411. https://heinonline.org/HOL/LandingPage?handle=hein.journals/jaaml15&div=22&id=&page=

Ijalana, Emmanuel Folayan, and Julius Olaseinde Agbana. “A Critical Appraisal of the Concept of Double-Decker Marriage under the Nigerian Family Law.” Beijing L. Rev. 12 (2021): 1163-1181. https://heinonline.org/HOL/LandingPage?handle=hein.journals/beijlar12&div=69&id=&page=

Ispas, Petruta Elena. “The Joint Tenancy over Property.” In Conf. Int’l Dr (2021): 294. https://heinonline.org/HOL/LandingPage?handle=hein.journals/cidstue2021&div=37&id=&page=

Parker v British Airways Board (1982) QB 1004

Raj, Prince. “Transfer by Co-Owner under the Transfer of Property Act: An Analysis.” Issue 3 Int’l JL Mgmt. & Human. 4 (2021): 237-249. https://heinonline.org/HOL/LandingPage?handle=hein.journals/ijlmhs11&div=28&id=&page=

Waverley Borough Council v Fletcher (1996) QB 334

[1] Raj, Prince. “Transfer by Co-Owner under the Transfer of Property Act: An Analysis.” Issue 3 Int’l JL Mgmt. & Human. 4 (2021): 237.

[2] Ispas, Petruta Elena. “The Joint Tenancy over Property.” In Conf. Int’l Dr (2021): 294.

[3] Bernstein of Leigh (Baron) v Skyviews and General Ltd. (1978) QB 479

[4] Buckinghamshire CC v Moran [1990] Ch. 623 (13 February 1989)

[5] AGBO, Ifeoma Lynda. “Palm tree justice and settlement of matrimonial property under a statutory marriage in Nigeria.” International review of law and jurisprudence (IRLJ) 3, no. 2 (2021). 2

[6] Ijalana, Emmanuel Folayan, and Julius Olaseinde Agbana. “A Critical Appraisal of the Concept of Double-Decker Marriage under the Nigerian Family Law.” Beijing L. Rev. 12 (2021): 1163.

[7] Waverley Borough Council v Fletcher

[8] Curtis, Lynn. “Valuation of Stock Options in Dividing Marital Property upon Dissolution.” J. Am. Acad. Matrimonial Law. 15 (1998): 411.

[9] Parker v British Airways Board