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Beneficial interest claim on marital home.


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I'm trying to help somebody with a dispute over claimed beneficial interest in a property. The lady doesn't have a computer or the funds to seek legal advice, and as I've read (and had) so much excellent advice from the people on this forum, wanted to ask for any views/help. Thanks in advance and apologies for the long post.

 

The situation is:

 

The lady (L) was living in a housing association property (1) with young children following a divorce. She lived there for roughly 5 years and then met a man (M) and they became partners. M had his own small house with no mortgage (2). L was informed by the housing association that she could purchase her property under the right to buy scheme, with what she recalls as a 50% discount from market value. After a year or so, L + M decided to live together. Whilst visiting friends and explaining their plans, their friends told them that a nice house (3) in their street was soon to go up for sale. L + M viewed the house and after discussing price with the owner, decided that they would like to buy it - the plan being that they could jointly finance it with the 50% profit of house 1 and the sale of house 2. L wasn't in a financial position to purchase her house (1) under the right to buy scheme and not able to get a mortgage. The value of M's house (2) was about 40% short of the asking price of the new house (3). L+ M went to a financial advisor who advised that they take out an endowment mortgage as a temporary measure (to secure house 3) until both house 1 and 2 had been bought and sold. As L was ineligible for a mortgage, M took out the mortgage in his sole name, and arranged all of the conveyancing through his solicitor. M was able to raise the funds to allow L to buy house 1 under the right to buy scheme, which she then did (although M arranged all the conveyancing through his own solicitor). The Land Registry title states that L was the sole legal owner of house 1. House 1 was then sold for a 50% profit. House 2 was then also sold. The endowment mortgage was then paid off with the joint proceeds from house 1 and 2 and they moved in together to house 3 (mortgage free). The Land Registry title states that only M as the legal owner of house 3, I guess because the endowment mortgage used to buy house 3 was in his name. L + M married the following year. They remained happily married for almost 20 years,and in a relationship for almost 30 years in total, but are sadly now divorcing. House 3 has increased in value by 400% since they bought it. M wants to sell house 3 and move away to another city. L does not want to stay in house 3 for strong personal reasons.

 

M is claiming that he is the sole legal owner of house 3, that L made no contribution to it's purchase and therefore has no beneficial interest in the house. M is stating that L kept the 50% profit from house 1. M refuses to disclose the solicitors used to purchase house 3. M also refuses to disclose bank statements showing the different transactions, and says that as it was 20 years ago, the statements and conveyancing files are not available.

 

On the information given above, any advice that I could pass on to L to help her with this dispute would be greatly appreciated.

 

Kind regards

Pattman

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Does L need funds from the sale of the house to be able to find new accommodation? Are there any dependent children still living in the house?

 

Yes, L needs funds to find new accommodation. There are no dependant children living in the house. Basically, as she contributed 40% towards the purchase price of house 3, and was married to M for 20 years she feels that the equity in house 3 should be split 50/50 on sale. M is claiming she kept the proceeds from house 1 and contributed nothing to the purchase of house 3. L can't prove this as the conveyancing was done by M's solicitor. L is trying to obtain backdated bank statements to prove that she never received funds/proceeds from sale of house 1, but her bank have said that they can only go back 6 years. The bank did however say that regarding the endowment mortgage, they may have records of that, but as this was done in M's name, he would have to apply for those documents which he will not do - would it be possible to get a court order to force disclosure of this information?

 

Thanks

Pattmann

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Sorry more questions - how far into divorce proceedings is L? Decree nisi, absolute etc. Is there any type of mediation taking place?

 

Its not a clear cut area of law (and not an area of law I practice in, although I have studied it) and the court can take several factors into account when splitting assets. I think there's little doubt that this house will be viewed as a matrimonial asset as they have both lived there for a long time whilst married. M seems to be trying to make a case that it is a non-matrimonial asset and therefore should not be split.

 

The court can take into account many factors, e.g. the age of both parties, the length of the marriage...

 

The leading case I believe is still White v White.

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Sorry more questions - how far into divorce proceedings is L? Decree nisi, absolute etc. Is there any type of mediation taking place?

 

Its not a clear cut area of law (and not an area of law I practice in, although I have studied it) and the court can take several factors into account when splitting assets. I think there's little doubt that this house will be viewed as a matrimonial asset as they have both lived there for a long time whilst married. M seems to be trying to make a case that it is a non-matrimonial asset and therefore should not be split.

 

The court can take into account many factors, e.g. the age of both parties, the length of the marriage...

 

The leading case I believe is still White v White.

 

Thanks SuperVillain - Decree nisi but not absolute. M refused mediation when requested by L. You're correct in your analysis - M is trying to keep house C as an asset for himself by denying L has a beneficial interest, and completely ignoring that it was their matrimonial home for almost 20 years, regardless of how it was funded. I will take a look at White v White.

 

Thanks

Pattman

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