Those who don’t have big enough incomes to raise the mortgage finance they need to buy a home are often tempted to include the name of a better-off friend or loved one on the title deeds. As a High Court case reviewed by Suzanne Moore showed, however, such a step can have dire and unforeseen legal consequences.
The case concerned a father who, on the face of it, purchased his home jointly with his eldest son. He said his son’s name had only been included on the conveyance so that their joint incomes could be taken into account when applying for a mortgage. The son, however, subsequently launched proceedings against his father on the basis that he owned half the property. He sought an order requiring a sale of his father’s home so that he could turn his share into cash.
The son pointed to the fact that, on the form which recorded the conveyance, a handwritten ‘X’ had been inserted in a box which, again on the face of it, confirmed that he and his father held the property as tenants in common in equal shares. Rejecting the son’s claim, however, a judge found that the ‘X’ had been inserted by mistake and that, in reality, the father owned the whole property.
Dismissing the son’s appeal against that outcome, the Court could find no flaw in the judge’s conclusion that there had never been any common intention between father and son that the latter would have an interest in the property. The son had neither contributed to the purchase price nor had he made any mortgage repayments. The property was not bought as a home for him and he undertook no practical liability under the mortgage.
If you’re looking at purchasing a property with shared ownership, it is important to seek legal advice before entering into any agreement.