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Don't Even Think About Doing a Property Deal Without Legal Advice

Property purchases are, for the majority of people, the highest-value deals they ever enter into and that is why they should never be undertaken in haste or without expert legal advice. A case in which an amateurish, home-made agreement led to years of costly strife between family members illustrates the point effectively.

Due to concerns that the opportunity to purchase a property might otherwise be lost, the sale agreement was created in a hurry, without the assistance of a solicitor. It stated that a woman had put £150,000 towards the purchase of the house by her stepson and his wife, that the money was not an interest-free loan and that she would have a share in the property to reflect the value of her contribution.

After a family rift developed, the woman launched proceedings. A judge rejected the couple's claim that the agreement was a forgery and ruled that she was entitled to a 37.5 per cent stake in the house. He ordered that the property be sold and the woman be paid her share from the net proceeds of the sale. Responsibility for discharging the mortgage on the property fell on the couple alone.

In challenging that outcome, the couple argued that the woman's claim should have been dismissed in its entirety because she had not come to court with 'clean hands'. She had confessed during the trial that she had forged her deceased husband's will, appointing herself as his executor and beneficiary. He had in fact died intestate, with the result that most of the money she had contributed to the house purchase did not belong to her but to the estate.

The High Court acknowledged, in the form of a declaration, that the woman held that part of her stake in the property attributable to her purported inheritance from her husband on trust for his estate. However, in dismissing the couple's appeal, the Court noted that the stepson held his interest in his father's estate in a different capacity to his interest in the property.

The woman had also put some of her own money towards the purchase, and the estate, rather than her stepson, was the principal victim of her act of forgery. The agreement accurately stated the amount of her contribution and it was not rendered unenforceable by the fact that not all of that money belonged to her. Neither the judge's division of the sale proceeds nor his order that the couple pay 70 per cent of the legal costs of the case could be criticised.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.