Implied trusts and trusts of the family home - Establishing ...

Learning Outcomes

This article examines how beneficial interests in family homes are established under implied trusts, particularly where legal title does not reflect the parties' contributions or intentions. It focuses on the requirements for common intention constructive trusts (CICTs), distinguishing between express and inferred common intention, and the necessity of detrimental reliance. For the SQE1 assessments, you need to identify when an implied trust might arise in a family home context and apply the principles for establishing a common intention to share beneficial ownership, especially in disputes between cohabiting couples.

It also clarifies how an oral understanding can be enforceable notwithstanding formalities for declarations of trust of land, because constructive trusts arise by operation of law (and so fall within the exception in section 53(2) of the Law of Property Act 1925). You should be able to analyse the evidential routes to proving a shared intention (including the “excuse” cases), evaluate when financial and non‑financial conduct amounts to detrimental reliance, and recognise the different treatment of joint name and sole name properties. Finally, you should understand the separate stage of quantification once a CICT is established, including the “whole course of dealing” approach used to fix shares.

SQE1 Syllabus

For SQE1, you are required to understand the creation and operation of implied trusts, specifically in the context of family homes. This includes applying the relevant legal principles to determine beneficial interests where there is no express declaration or where the legal ownership does not mirror the intended beneficial ownership, with a focus on the following syllabus points:

• The distinction between resulting trusts and common intention constructive trusts (CICTs) in family home scenarios.
• The requirements for establishing a CICT based on express common intention, including the nature of discussions or agreements needed.
• The requirements for establishing a CICT based on inferred common intention, particularly the significance of direct financial contributions and the approach outlined in key case law.
• The concept of detrimental reliance and the types of conduct that may satisfy this requirement in both express and inferred intention cases.
• How the courts quantify beneficial interests under a CICT once it has been established.
• The interaction between section 53(1)(b) Law of Property Act 1925 and CICTs (the section 53(2) exception for implied, resulting and constructive trusts).
• The “excuse” line of authority as a route to proving express common intention.
• The potential role of substantial indirect contributions (such as paying household expenses that free funds for mortgage payments), and the limits suggested by case law.
• Practical consequences once an equitable interest exists, including the need to consider protection and the potential interaction with third parties (e.g. actual occupation in registered land).

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Which type of trust is most commonly applied by courts to determine beneficial interests in a family home where cohabiting partners dispute ownership and there is no express declaration?
   1. Express trust
   2. Resulting trust
   3. Common intention constructive trust
   4. Secret trust
2. According to Lloyds Bank plc v Rosset, what is required to establish an express common intention constructive trust?
   1. Significant non-financial contributions only.
   2. Direct financial contributions to the purchase price only.
   3. Evidence of express discussions, agreement, or understanding between the parties regarding shared ownership, plus detrimental reliance.
   4. Registration of the property in joint names.

3. True or false: Paying household bills generally allows the court to infer a common intention to share beneficial ownership of the family home.

4. What type of conduct might constitute 'detrimental reliance' for the purposes of establishing a common intention constructive trust?
   1. Making significant financial contributions towards property improvements.
   2. Giving up a career to look after the home and children based on an agreement to share ownership.
   3. Making substantial mortgage payments.
   4. All of the above.

Introduction

Disputes often arise concerning the beneficial ownership of family homes, particularly between unmarried couples upon relationship breakdown. While married couples or civil partners have recourse to statutory remedies (under the Matrimonial Causes Act 1973), cohabiting couples must rely on the principles of trust law to establish their respective interests. Where legal title is held solely by one partner, or jointly but without reflecting the true intended shares, the court may imply a trust to determine the beneficial ownership. This article focuses on the common intention constructive trust (CICT) as the primary mechanism used by the courts in this context, specifically examining how a common intention to share beneficial ownership can be established through express or inferred agreements, and the requirement of detrimental reliance.

A CICT is an implied trust that arises by operation of law. This is significant for formalities: although declarations of trust “respecting any land” normally need signed written evidence under section 53(1)(b) of the Law of Property Act 1925, implied trusts (including constructive trusts) are exempt under section 53(2). In practice, many understanding‑based claims concern oral assurances or informal agreements; provided a constructive trust can be established with detrimental reliance, the absence of signed writing does not bar enforcement.

Distinguishing Implied Trusts in the Family Home

When the legal ownership of a family home does not accurately reflect the beneficial interests, equity may impose an implied trust. The two main types are resulting trusts and constructive trusts.

Resulting Trusts

Historically, resulting trusts were sometimes used, based on the presumption that a contribution to the purchase price gives rise to a proportionate beneficial interest. Two principal patterns are common: a voluntary transfer with no consideration, and purchase money contributed by one person while title is taken in another’s name. In family home claims, the purchase‑money resulting trust would typically recognise only direct, contemporaneous contributions to the price (including a cash deposit or mortgage capital instalments at the time of acquisition). Ancillary costs such as legal fees or stamp duty do not count towards this presumption.

However, this approach is now largely confined to investment properties rather than family homes occupied by cohabiting couples. The courts prefer the flexibility of the CICT framework in the domestic context, which allows for a broader range of contributions and conduct to be considered beyond just the initial purchase price contribution (Stack v Dowden [2007] UKHL 17). That said, resulting trusts still matter in certain domestic contexts—for example, where an occupier uses a statutory “right to buy” discount (a valuable, quantifiable contribution to acquisition), a resulting trust analysis can be appropriate to reflect that contribution in a subsequent property purchased with the proceeds.

Common Intention Constructive Trusts (CICTs)

The CICT is the principal tool used by courts today to determine beneficial ownership in family homes involving cohabiting couples. It arises where the legal owner and the claimant shared a common intention that the claimant should have a beneficial interest in the property, and the claimant acted to their detriment in reliance on that intention.

Key Term: Common Intention Constructive Trust (CICT)
A trust imposed by equity in relation to a family home, based on the parties' shared intention (express or inferred) regarding beneficial ownership, coupled with detrimental reliance by the claimant.

The establishment of a CICT involves two key stages:

1. Establishing the common intention (either express or inferred) and detrimental reliance.
2. Quantifying the respective beneficial shares based on that common intention or the parties' whole course of dealing.

This article focuses primarily on the first stage: establishing the common intention.

Establishing Common Intention

A shared understanding or agreement regarding beneficial ownership is essential for a CICT. This common intention does not need to be legally formal but must be genuine. It can be established in two ways: through express discussions or inferred from conduct.

Express Common Intention

An express common intention arises from evidence of actual discussions, agreements, or understandings between the parties that the beneficial ownership of the property was to be shared. The evidence may be oral; it does not need to be documented, because constructive trusts arise by operation of law and are exempt from the section 53(1)(b) writing requirement by section 53(2).

Key Term: Express Common Intention
A shared intention regarding beneficial ownership derived from explicit discussions or agreements between the parties, however informal.

The benchmark case, Lloyds Bank plc v Rosset [1991] 1 AC 107, indicated that evidence of express discussions about sharing the property, even if imperfectly remembered or imprecise, could suffice. The court will scrutinise what was said to ensure the assurance relates to ownership, rather than merely cohabitation or support. Vague statements (“we’ll sort it out,” “you’ll always have a roof over your head”) are generally not enough; assurances that convey sharing of ownership (“it’s as much your house as mine”; “the house is ours”) are more probative.

An important sub‑category is the “excuse” cases, where the legal owner gives a reason why the property is not put into joint names. If the excuse is coupled with language that indicates the home would otherwise be jointly owned, the court may treat it as evidence of a shared understanding about ownership:

Key Term: Excuse
A reason given by the legal owner for not putting title into joint names which, when coupled with an assurance that the home would otherwise be jointly owned, can evidence an express common intention to share.

• In Eves v Eves [1975] 1 WLR 1338, the excuse (her age) was accepted; combined with the broader assurance that the house was for them both, it established an express common intention.
• In Grant v Edwards [1986] Ch 638, the excuse (possible prejudice to divorce proceedings) likewise helped show an express common intention.
• In contrast, Curran v Collins [2015] EWCA Civ 404 shows the limits: a purported “excuse” that did not genuinely convey an intention to share (and where the claimant could not prove detriment) was insufficient.

These cases emphasise two essentials. First, the assurance must relate to ownership, not just occupation. Second, there must be authentic evidence that a shared beneficial interest was envisaged; an “excuse” that appears to be no more than a placatory remark will not suffice.

Timing matters. Discussions at or around the time of acquisition are strongest for establishing an initial common intention to share. Later statements can still be relevant—particularly on the question of quantification—because intentions and shares can change over time, but an initial beneficial interest normally requires evidence arising at acquisition or soon thereafter.

Detrimental Reliance (Express Intention)

Once an express common intention is established, the claimant must demonstrate that they acted to their detriment or significantly altered their position in reliance on this agreement.

Key Term: Detrimental Reliance
Action taken by the claimant, based on the common intention to share beneficial ownership, which results in some form of loss, disadvantage, or change of position for the claimant.

Detriment is fact‑sensitive. There is no closed list, but the following are commonly accepted indicators:

• Direct financial contributions to the deposit or other purchase monies, or sustained mortgage repayments.
• Substantial renovation or improvement works, beyond minor DIY, that increase value.
• Significant life changes in reliance on an ownership assurance, such as giving up employment, relocating, or assuming responsibilities that enable the legal owner to finance the mortgage.
• A sustained pattern of paying household expenses with an explicit arrangement that thereby enabled the legal owner to meet mortgage instalments.

A claimant does not need to prove each of these; one or more, if significant and shown to be in reliance on the assurance, can be sufficient. Conversely, minor expenditure on decoration or ordinary domestic tasks, without more, is unlikely to amount to detriment.

Worked Example 1.1

Chloe and Ben, an unmarried couple, decide to buy a house together. Ben tells Chloe the house will be "theirs", but it is registered in his sole name because Chloe has a poor credit history which might affect the mortgage application. Chloe pays the deposit. After moving in, Chloe pays all household utility bills and food costs, while Ben pays the mortgage. Chloe also undertakes significant re-plastering and re-wiring work herself. They later separate. Can Chloe establish an express common intention constructive trust?

Answer:
Possibly. Ben's statement that the house would be "theirs" and his excuse for sole registration could indicate an express common intention to share ownership. Chloe acted to her detriment by paying the deposit, contributing indirectly to the mortgage by paying other bills, and carrying out significant improvement works. The court would assess if these actions were done in reliance on the shared understanding.

Inferred Common Intention

Where there is no evidence of express discussions, the court may infer a common intention from the parties' conduct. This route focuses on contributions—especially financial—so that the same facts proving inference typically prove detriment.

Key Term: Inferred Common Intention
A shared intention regarding beneficial ownership deduced by the court from the parties' conduct, primarily their financial contributions to the property.

In Rosset, Lord Bridge suggested that only direct contributions to the purchase price (deposit or mortgage instalments) would suffice to infer common intention in sole name cases. On that strict view, even substantial improvements or paying household bills would not support an inference.

Subsequent authorities (notably Stack v Dowden and Jones v Kernott [2011] UKSC 53) brought greater flexibility to quantifying shares (especially for joint names cases) and emphasised that the court may consider the parties’ “whole course of dealing” in relation to the property. In sole name cases, the strict Rosset threshold for inferring any common intention remains influential, but there is room for argument that significant indirect contributions may be relevant in particular factual settings. A frequently cited example is Le Foe v Le Foe (a first‑instance decision), where the wife’s substantial payments of other outgoings were found to enable the husband’s mortgage payments, supporting an inference of intention to share.

A helpful way to approach inference is:

• Start with direct contributions to acquisition (deposit and mortgage instalments): still the strongest evidence.
• Consider whether there was an explicit arrangement that one partner would cover household expenses so the other could meet the mortgage, and whether those contributions were significant and sustained.
• Examine major improvements funded or carried out by the claimant that materially enhanced the property’s value.

The further you move from contributions to acquisition or mortgage payments, the more closely the court will scrutinise whether the conduct, objectively assessed, supports an inference that both intended the claimant to have a share.

Key Term: Whole Course of Dealing
The broad, contextual assessment of the parties’ financial and non‑financial conduct over time in relation to the property, used primarily for quantifying shares once a CICT is established.

Detrimental Reliance (Inferred Intention)

Where a common intention is inferred from contributions to purchase or mortgage payments, the same conduct usually suffices to show detrimental reliance: such contributions are unlikely to have been made without a belief in ownership and are, by themselves, disadvantageous if no share is recognised.

Worked Example 1.2

David buys a house in his sole name. His partner, Sarah, moves in later. There are no discussions about ownership. Sarah uses a small inheritance to pay for a substantial loft conversion, significantly increasing the property's value. David pays the mortgage and all other household bills. They separate years later. Can Sarah establish an inferred common intention constructive trust?

Answer:
Under the strict Rosset approach, Sarah's contribution to improvements might not be enough to infer common intention, as it wasn't a direct contribution to the purchase price or mortgage. However, post-Stack/Jones, a court might consider her substantial financial contribution to the improvement as part of the "whole course of dealing", potentially inferring a common intention and finding detrimental reliance. The outcome is less certain than if she had contributed to the purchase price directly.

Worked Example 1.3

Marta and Leo agree she will meet all childcare and day‑to‑day household outgoings so that Leo can afford the monthly mortgage on a home bought in his sole name. There are no express discussions about ownership. Marta does this for eight years, during which time their finances are arranged on the agreed basis. Can a common intention be inferred?

Answer:
Possibly. Although Rosset stresses direct contributions to acquisition or mortgage as the clearest route, a court may treat Marta’s sustained and significant indirect contributions—explicitly structured to enable mortgage payments—as capable of supporting an inference of common intention. Success will turn on the clarity of the arrangement, the magnitude and duration of her contributions, and the overall context. If a common intention is inferred, the same conduct will typically establish detriment.

Worked Example 1.4

Priya and Nathan live together in Nathan’s sole name house. Priya redecorates and undertakes light DIY at weekends for two years. She pays occasionally for groceries and utilities but has never paid towards the mortgage or funded capital improvements. There were no discussions about ownership. Can Priya claim a share?

Answer:
Unlikely. Occasional bill payments and light DIY will generally be treated as ordinary domestic contributions and insufficient—without more—to infer a common intention to share, and they would struggle to qualify as detrimental reliance.

Exam Warning

Be aware that the precise scope of conduct sufficient to infer common intention post-Stack and Jones in sole ownership cases remains debated. While direct financial contributions are strongest, arguments might be made for substantial improvements or significant indirect contributions, but Rosset's stricter approach has not been explicitly overruled for the initial stage of establishing any common intention (as opposed to quantifying shares once intention is found). Focus on direct contributions as the clearest path in exam scenarios.

Further guidance on evidence and timing

• Discussions or “excuses” given close to the time of purchase are particularly persuasive.
• Later conduct and statements can evidence a change in intention affecting shares over time (Jones v Kernott), even if the initial acquisition intention was different.
• Assurances must relate to sharing ownership; statements that only address cohabitation or support are rarely sufficient on their own.
• Proof is on the claimant; consistent documents, contemporaneous messages, and witness testimony can assist where memories are contested.

Quantifying the Shares

Once a common intention constructive trust is established (either expressly or by inference), the court must quantify the parties' respective beneficial shares. If there was an express agreement about the shares, that will usually be upheld. If not, the court determines the shares it considers fair having regard to the whole course of dealing between the parties in relation to the property (Stack v Dowden; Jones v Kernott). This allows the court to consider a wide range of factors, including financial and non‑financial contributions over the entire relationship, not just contributions at the time of purchase.

Where legal title is in joint names, there is generally a presumption that the beneficial interest is also joint and equal unless there is evidence that the parties intended otherwise. That presumption can be displaced on evidence of a different common intention (for example, if finances were kept rigidly separate and contributions were markedly unequal over time). Where title is held in a sole name and a CICT has been established, the court will either:

• Infer the specific shares originally intended if the evidence supports that; or
• If it cannot, impute a fair division by surveying the parties’ whole course of dealing.

Relevant factors include, among others:

• Any discussions at or around the time of purchase regarding ownership and shares.
• The reasons why title was taken in one name only, or in joint names.
• Children for whom the parties had a responsibility to provide a home.
• How the purchase was financed, both initially and subsequently (including who paid what and for how long).
• How the parties arranged their finances (joint accounts or separate, pooling or separation).
• How they discharged ongoing outgoings on the property and other household expenses.
• Significant improvements, who funded them, and their effect on value.

Although this stage allows a broad, fairness‑based survey, it is not an open‑ended discretion: the court is still seeking to give effect to what the parties’ shared intentions—objectively assessed—are to be taken to have been, rather than simply imposing what a judge considers fair.

Key Term: Whole Course of Dealing
The broad evaluative exercise the court undertakes to identify the shares that best reflect the parties’ shared intentions, considering their financial and non‑financial conduct over time.

It should also be remembered that the route chosen to establish the interest affects quantification. If a resulting trust alone were applied, shares would follow the proportions of direct purchase money contributions. Under a CICT, the court is not confined to that mechanical approach and can reach a share that better reflects the realities of the parties’ dealings.

Worked Example 1.5

Amira pays a 30% deposit on a property purchased in Tariq’s sole name; Tariq alone services the mortgage for the next 12 years. There were no discussions about shares. Amira also pays for a kitchen extension midway through the relationship, adding value. A CICT is established. How might shares be quantified?

Answer:
The court would look at the whole course of dealing: Amira’s large deposit, Tariq’s sustained mortgage payments, and Amira’s capital expenditure on the extension. While a resulting trust lens might point to 30%, a CICT quantification may award Amira a larger share than 30% to reflect the extension and other factors, but not necessarily an equal share given Tariq’s long‑term mortgage burden. The outcome turns on the court’s evaluation of the parties’ shared intentions over time.

Practical note on third parties

Once an equitable interest is established, its effectiveness against third parties in registered land may depend on notice and actual occupation. An unprotected interest can still override a registered disposition if the claimant is in actual occupation and the occupation would be obvious on reasonably careful inspection or was known to the purchaser; however, if an occupier is asked and fails to disclose their interest, overriding status may be lost. In practice, cohabitants often protect their interest by a restriction where possible, but the primary focus in the present context remains establishing the equitable interest.

Key Point Checklist

This article has covered the following key knowledge points:

• Unmarried couples must rely on trust law (primarily CICTs) to resolve disputes over family home ownership.
• A CICT requires proof of a common intention to share beneficial ownership (express or inferred) and detrimental reliance by the claimant.
• Express common intention is based on evidence of actual discussions or assurances about shared ownership; an “excuse” for sole legal title can evidence intention if it genuinely conveys joint ownership but for the stated reason.
• Inferred common intention is deduced from conduct—most strongly from direct contributions to the purchase price or mortgage, though significant indirect contributions and substantial improvements may support inference in some cases.
• Detrimental reliance involves the claimant acting to their disadvantage (financially or otherwise) based on the common intention; sustained mortgage payments, capital improvements, or significant life changes often qualify, while minor domestic contributions usually do not.
• The quantification of shares under a CICT involves assessing the parties’ whole course of dealing to identify the shares that best reflect their shared intentions, unless shares were expressly agreed.
• Resulting trusts are generally not the primary mechanism for resolving family home disputes between cohabitees, but they still apply in investment arrangements or to capture certain acquisition contributions (e.g. right‑to‑buy discounts).
• Constructive trusts arise by operation of law and fall within section 53(2) LPA 1925, so an enforceable CICT can be established without signed written evidence of the arrangement.
• The timing and content of assurances matter: statements must relate to ownership (not just occupation) and are most persuasive if made around acquisition; subsequent conduct may alter shares over time.

Key Terms and Concepts

• Common Intention Constructive Trust (CICT)
• Detrimental Reliance
• Express Common Intention
• Inferred Common Intention
• Excuse
• Whole Course of Dealing