Beneficial interest
This content applies to England only.
Housing laws vary between England and Scotland. Get advice relating to Scotland
Claiming a beneficial interest is a way of getting the court to recognise your financial or other contributions towards the home.
Having a beneficial interest gives you rights to live in the home and a share of its value if sold. If you are not married/in a civil partnership and are not a joint/sole owner, this is the only way to establish long-term rights to the home and a share of the proceeds of sale.
What does having a beneficial interest mean?
Having a beneficial interest means getting any contributions (financial and otherwise) both partners have made towards the home recognised by the court. Legal ownership can be altered by a beneficial interest, and so can affect who is entitled to what share of the home.
Establishing a beneficial interest could give you the right to:
- occupy the home
- prevent the sale of the home (but not indefinitely)
- prevent your partner from using the home to get a loan
- make mortgage payments
- get a share of the proceeds if the home is sold - your share will depend on the terms of your beneficial interest.
However, bear in mind that it can be quite difficult to establish a beneficial interest.
How do I get a beneficial interest?
The simplest way to prove beneficial interest is if you have a written or signed declaration or formal trust deed with your partner, setting out each other's intentions with regard to who gets what. It's helpful to arrange a deed of this kind when you buy a property.
If such a deed does not exist, and you cannot agree, then you will have to go to court. A court will look for common understanding between a couple about what their intentions were. If this doesn't exist, the court will look at:
- contributions – financial or otherwise to any development of the property
- any promises you have relied on that will receive a share of the property.
You can apply to establish a beneficial interest at any point in your relationship if you are worried that your contributions towards the home might not be recognised.
Who should apply for a beneficial interest?
Establishing a beneficial interest is particularly useful if you have no automatic rights to the home (eg you're not a legal owner, or you're not married/in a civil partnership with the legal owner).
If you're a joint legal owner, but feel you and your partner shouldn't have the same rights to the property, you can apply to establish a beneficial interest to try to alter your share of the property.
What if I'm divorcing/dissolving my relationship?
If you are married or in a civil partnership, a decision on the long-term rights you might have to your home can be made as part of your divorce/dissolution proceedings.
Are there any options other than beneficial interest?
If you don't own the home, but believe you are owed a share in it, there are two options aside from establishing a beneficial interest:
- proving you have a licence to stay in the property
- establishing rights to estoppel - this means the courts may give you a tenancy or a licence, or even a share of the property because you have relied on a promise that you would receive a share of the property.
These options may be appropriate if you think you have been misled by your partner into believing you would get a share in the property. This may have caused you to give up your job, or a home of your own, to live with your partner.
Both these options are difficult to prove, and you will need to get advice from an adviser or solicitor. Use our advice services directory to find an adviser in your area. For free legal advice, contact Community Legal Advice on 0845 345 4 345.
How can we agree without using the courts?
If you go to court you will need a solicitor, and are likely to have to pay court fees. This process can be expensive, unless you are eligible for legal aid.
To avoid going to court, it is well worth finding out your rights, and trying to negotiate with your partner. If you and your partner can’t talk alone without disagreeing, you could try mediation.
Mediation is different from counselling as it aims to reach practical agreements about money, children and property by using a neutral third party (the 'mediator') to help you talk through issues. Mediation can have very positive long-term benefits as it can help build understanding between ex-partners, which is especially important if you have children.
