Trusts of the Family Home and Proprietary Estoppel — SQE1 FLK2 Trusts Law

Five years living together. She paid half the utility bills, did the weekly food shopping, did most of the cooking and cleaning. Nothing towards the deposit, nothing towards the mortgage, nothing towards any improvement. The house is in his sole name, and neither of them ever mentioned who owned it. The relationship ends and he asks her to leave. What share of the house does she get? None.

This is Trusts of the Family Home and Proprietary Estoppel, and that answer is why the topic exists. Unmarried couples have no automatic rights in each other's property. What they have instead are two doctrines, each demanding, each with its own route in. Keep her in mind. There is a version of her story that ends differently.

Here is the route. Why nothing needs to be in writing. Then the first question you always ask, whose name is on the title, and the two frameworks it sends you to. Joint names, and the presumption of equal shares. Sole name, and the two things a claimant must prove. Then quantifying the shares. And then the second doctrine, proprietary estoppel, and what the court will actually give you.

Start with the gap this fills. Marry, and on separation or death the law gives you rights in your spouse's property. Live together for twenty years and it gives you none. The house belongs to whoever owns it. So a cohabitant who wants a share has to establish one. The vehicle is a common intention constructive trust: a trust the court imposes because the parties shared an intention about who should benefit.

Now a point of formality that surprises people. A declaration of trust of land must be evidenced in signed writing. That is s 53(1)(b) of the Law of Property Act 1925. So how can a cohabitant with nothing in writing win anything at all? Because s 53(2) says that subsection does not affect resulting, implied or constructive trusts. A common intention constructive trust arises by operation of law, so it falls outside the writing requirement altogether.

Then the first question, and it decides everything that follows. Whose name is on the legal title? Get this wrong at the outset and the rest of your answer is wrong with it, because the two situations run on different rules and different starting points.

Joint names first. A couple buy in both names, sign no declaration of trust, and later fall out about shares. The starting point is that equity follows the law. They hold the beneficial interest equally. That is Stack v Dowden, from 2007, where an unmarried couple with four children bought in joint names and Ms Dowden had provided a good deal more of the price.

To depart from equal shares, the party who wants something different must prove a different shared intention, and the burden is a heavy one. The House of Lords said cases where joint legal owners are found to hold unequally will be very unusual. Note what that means in practice. A bigger contribution to the price is evidence, and it is weighed with everything else. It does not displace equal shares by itself.

And do not reach for a resulting trust. In the ordinary domestic joint-names case the shares do not follow the proportions in which the price was found. That approach was rejected for the family home. What the court does instead is look at the whole course of dealing between the parties.

Then what happens when they separate and life carries on? Jones v Kernott, from 2011. A couple bought in joint names; the man left after about eight years and made no further contribution; she paid everything for years afterwards. The Supreme Court worked in two stages, and the order matters.

Stage one, deduce. Look for what the parties actually intended, from their conduct, at acquisition or later. Only if that fails do you reach stage two, impute: decide what they would have agreed had they thought about it at the relevant time. Deduction first, always, and say why it failed before you impute. Confusing the two is the classic slip.

On the facts, Ms Jones took 90% and Mr Kernott 10%, the small share reflecting his early contributions and the fact that he had never formally transferred his interest. Which tells you something about how far the court will go once the presumption is displaced.

Now sole names, which is your client from the cold open, and it is much harder. The starting point is that she has nothing. She must affirmatively prove two things. A common intention that she should have a beneficial interest, and detrimental reliance on that intention. That is Lloyds Bank v Rosset, from 1991, where a husband bought in his sole name and his wife's claim rested on discussions and her work on the renovation.

There are two routes to the common intention. The first is an express agreement, arrangement or understanding, actually discussed between them. And here is a strange feature of the case law worth knowing. Try one. A man tells his partner, untruthfully, that her name cannot go on the title for some reason of her age or her divorce. Does that excuse help him or hurt him?

It hurts him. The courts have treated an excuse of that kind as evidence that the parties did discuss ownership, and that but for the excuse her name would have gone on. So the excuse becomes the express agreement. If the facts give you a reason offered for leaving someone off the title, that is a flag, not a dead end.

The second route is inference from conduct, and it is narrow. Direct contributions to the purchase price are the gold standard: the deposit, the acquisition funds, the mortgage instalments. Lord Bridge thought it at least extremely doubtful whether anything less would do. A direct contribution proves the intention and the detrimental reliance in a single act.

Since Stack v Dowden, the courts take a broader view, and indirect contributions carry more weight than they once did. Paying mortgage instalments. Funding significant improvements. Substantial and sustained contributions to household expenses that free the owner's income for the mortgage. But in a sole-name case, indirect contributions alone may still not be enough without some further evidence of a shared understanding about ownership.

Which is where your client founders. Not every act of reliance is detriment. Routine household contributions, buying the groceries, paying the utility bills, doing the housework, are the ordinary incidents of living together. They are not conduct explicable only on the footing that she was to own part of the house. A woman who had contributed in exactly that way, after nineteen years of cohabitation, recovered nothing.

The detriment has to go beyond what is expected of a cohabitant. Real sacrifice. Giving up secure accommodation elsewhere. Foregoing career opportunities or taking lower-paid work to care for children or the home. Substantial financial contributions referable to the acquisition of the house.

Say the claimant gets over that line. How much does she get? Not a sum worked out on a calculator. Quantification is holistic. The court examines the whole course of dealing. The source of the purchase funds, the mortgage payments, improvements, the discharge of other household expenses. The care of children, the length of the relationship, conduct after separation, and any discussion about shares.

So resist the temptation to divide the house in proportion to what each one paid. That is the single commonest error in a quantification answer. Set out the starting point, look for an express agreement, then work through the course of dealing, then, if you must, impute. And explain your reasoning rather than announcing a fraction.

Now the second doctrine, and the version of her story that ends differently. Suppose he had told her, more than once, that the flat would always be her home. Suppose on the strength of that she had sold her own flat in another town, given up her job there, and paid for a new roof. Nothing was ever agreed about ownership. Does she have a claim?

She does, and not under a constructive trust. This is the point that separates the doctrines. A constructive trust needs a shared intention, and there was none. Proprietary estoppel needs no shared intention at all. It runs on a one-sided assurance by the owner, reliance on it, detriment, and unconscionability in going back on it. Four elements, and all four must be there.

Assurance, express or implied from conduct. Reliance on it. Detriment as a result, substantial and linked to the assurance. And that it would be unjust for the promisor to resile. If the parties discussed ownership together, think constructive trust. If one of them made a promise to the other, think estoppel.

One evidential point that wins cases. Once the claimant proves the assurances, and conduct from which reliance can be inferred, reliance is presumed. The burden shifts to the other side to prove that she did not in fact rely on them. That is a real advantage. Proving why you did something twenty years ago is hard; disproving it is harder.

How clear does the assurance have to be? Less clear than you might think. Thorner v Major, from 2009. David Thorner worked for nearly 30 years, without pay, on the Somerset farm of his father's cousin Peter. Peter was taciturn and never promised the farm in terms. His indications were oblique and made in passing, the clearest a remark as he handed David the bonus notices on two policies on his own life.

Peter made a will leaving David the residue, then destroyed it after falling out with someone else, and died intestate. The House of Lords held that an assurance need not be express or precisely worded. The question is whether it was clear enough in its context, judged against the characters and the relationship of the parties. It was, and 30 years of unpaid work in reliance on it made it unconscionable to deny him the farm.

There is a limit, though, and it is about context. Try one. An experienced property developer reaches an oral agreement in principle with a landowner, expressly subject to contract, and spends time and money pursuing planning permission before the owner walks away. Estoppel?

No. He knew there was no binding agreement and expected a formal contract to follow. A commercial party who takes a known risk that negotiations may fail has not been led to believe he already has a right. Estoppel is at its strongest in the domestic and family context, where assurances are informal and nobody expects a contract.

So what does the claimant actually get? This is where the law has moved, and recently. The leading authority is now Guest v Guest, from 2022. The majority held that the aim of the remedy is to remedy the unconscionability of the promisor going back on the promise. That is normally achieved by satisfying the claimant's expectation. Enforcing the promise, in other words.

That matters, because the argument the majority rejected was that the remedy is simply to compensate the claimant for the detriment suffered. Expectation is the normal measure. Detriment is not.

But it is not unlimited, and the safeguard is proportionality. The remedy should not, without good reason, be out of all proportion to the detriment. That safeguard comes from Jennings v Rice, from 2002. A builder and part-time gardener cared for an elderly widow, latterly unpaid, on assurances that he would be seen right. The house alone was worth about £435,000. He was awarded £200,000.

Read the two together and the modern position is this. Jennings supplies the proportionality safeguard rather than the measure of the award. The court starts from the expectation and cuts it down where holding the promisor to it would be out of all proportion to the detriment.

And the remedies themselves are flexible. Transfer of the property or a share in it. A lump sum. A licence to occupy for life or a fixed term. A charge over the property. Or a clean-break money award instead, discounted to reflect the fact that the claimant is receiving early what was promised for the future.

And one last thing about who the equity binds. It is not a purely personal claim against the promisor. Under s 116 of the Land Registration Act 2002, an estoppel equity has effect from the time it arises. It is an interest capable of binding successors in title. So it can bind a buyer of the land, and where the claimant is in actual occupation it may override the sale altogether.

A word on how SQE1 tests this. You will not be asked to recall a case name or a section number. You get a scenario, five answers, and one instruction: pick the best. But this is the one topic where the names really are the framework, because each of them marks a different starting point.

If you keep only three. Stack v Dowden, for joint names and the presumption of equal shares that is very hard to shift. Lloyds Bank v Rosset, for the two things a sole-name claimant must prove. And Guest v Guest, because it tells you what the estoppel claimant actually walks away with.

Five traps. One: do not divide the house in proportion to contributions. That is the resulting trust approach, and it was rejected for the family home. In a joint-names case a bigger contribution is evidence to be weighed, not a fact that displaces equal shares.

Two: deduce before you impute. The court looks first for what the parties actually intended. Imputation is what it falls back on when that cannot be found, and an answer that jumps straight to what would be fair has skipped a stage.

Three: routine domestic contributions are not detriment. Groceries, bills and housework are the ordinary incidents of living together, however long it goes on, and cohabitation confers no property rights by the passage of time. There is no two-year rule.

Four: estoppel needs no shared intention, only a one-sided assurance. And five: after Guest v Guest, the estoppel remedy starts from the expectation, not from the detriment. An answer that measures the award by what the claimant lost is applying the argument the majority rejected.

Quick check. An unmarried couple bought a house eight years ago and are registered as joint proprietors. They signed no declaration of trust and never discussed what shares they were to have. The woman provided about 65% of the price from savings built up before they met. The balance was on a mortgage in both names, which the man has paid throughout. They have separated, and she claims 65% of the proceeds.

Is she entitled to that 65%? Three candidate answers. One: yes, because beneficial shares follow the proportions in which the price was provided. Two: yes, because providing the larger part of the price is by itself enough to displace equal shares. Three: no, because equal shares are the starting point and she must prove that they intended something different. Pause here if you want a moment.

The answer is three. Joint names, no declaration, so equity follows the law and the starting point is equal shares. The burden is on whoever asserts something else, and cases where joint legal owners hold unequally are very unusual. An unequal contribution, without more, does not discharge it.

Why the others fail. Option one reinstates the resulting trust, rejected for the family home. Option two treats one factor as decisive when it is only evidence to be weighed. She may still win, but she will need something further, such as rigidly separate finances or an actual discussion about shares.

Five things to take away. One: ask whose name is on the title before anything else. Two: joint names start at equal shares, and displacing that is very unusual, so weigh the whole course of dealing rather than counting contributions. Three: sole name needs a common intention, express or inferred, plus detrimental reliance, and routine domestic contributions are neither.

Four: your client from the beginning fails on those facts, and would have succeeded on an assurance she had relied on, because estoppel asks only for a one-sided promise. Five: the estoppel remedy normally satisfies the expectation, subject to proportionality, and the court can substitute a discounted money award for a clean break.

That is Trusts of the Family Home and Proprietary Estoppel. Next time, Liability of Strangers to the Trust.

Practise this topic with exam-style questions at sqe1prep.co.uk. This episode is for education and exam revision only, not legal advice, and we are not affiliated with or endorsed by the SRA or Kaplan.