By Sharon Hundal
Borneo Martell Turner Coulston
PROPERTY disputes come in all shapes and sizes. Often, the most complicated cases arise from informal arrangements made between family members or friends. They have relied on promises made to each other and have reached decisions because of their close relationship, at times to their detriment.
A recent and ongoing case reported in the media has highlighted the perils of transferring property to family members without properly understanding the potential implications of doing so. In this case a dispute has arisen between a father and son with regard to the father’s home.
In 2010, the father legally transferred his home into his son’s name. According to the father, it was agreed that despite no longer owning the property, he and his partner would continue to live there for the rest of their lives. The father had taken legal advice on the transfer but nevertheless relied upon the promises made by his son and felt safe in the belief that he still had a home for life.
The reason for the father’s decision to transfer the property may have been connected with worries about inheritance tax liabilities or possibly to take the property out of the equation if the father was required to later go into a care home. Either way, father and son appeared to have reached a deal which they were both comfortable with. Eight years later, the son asked the father to leave the property as he intended to move in it himself. The father has asked the court to consider the alleged deal reached with his son, even though it was not reflected in any legal document and to ‘undo’ the legal transfer. It will be difficult to persuade a court to acknowledge the existence of the informal agreement and then to prioritise it. The parties clearly had legal advice at the time and should have had the option to formalise the right to occupy for life upon transfer. The court is yet to make a decision in this particular case.
In another case, the claimant orally agreed to let the defendant have a room in his property on a short-term basis and without any formality. The deal was made on a handshake. The claimant charged the defendant a nominal amount to stay but paid all utilities and council tax himself. Time passed and the claimant moved out of the property. Although others lived in the property for periods of time, the defendant remained. The claimant asked the defendant to leave but the defendant refused to do so and was deemed not only to have a tenancy, but one that fell outside the usual Assured Shorthold Tenancy rules making it a lot more difficult to remove him.
Whilst it is best to try to avoid the situation by getting early detailed advice before entering into an agreement, sometimes this is not possible and a dispute inevitably arises. If this should happen it is important to understand and take advice on your legal position.
If you wish to discuss any issues relating to a dispute, contact Sharon Hundal at Borneo Martell Turner Coulston on 01604 622101.
