Informal agreement sufficient to pass husband’s share of property to wife
It goes without saying that in every case where husband and wife separate and there are property issues to resolve, expert legal advice should be sought.
But sometimes a couple try to sort things out between themselves without legal advice (or without heeding legal advice). They may do so in an attempt to save the cost of legal fees, but this can be a risky strategy.
This was demonstrated by a recent case concerning a property owned jointly by the husband and the wife, even though in the event it turned out well for the wife.
In the case the couple began their relationship in about 2000. In 2001 they purchased a property together as “joint tenants”, meaning that they owned the property equally.
The couple married in 2006 and had two children together.
In 2009 the couple separated. At around that time they discussed what should happen to the property. In the course of those discussions the husband indicated that he did not wish to retain an interest in the property, and that he was content for the wife to have the whole property, so long as she left it to their two children in due course.
Following the separation the wife paid for all expenditure relating to the property, including the mortgage repayments (when she could), council tax, utility bills and other household expenditure. The husband contributed nothing.
At the time of the separation, and for several years after, no formal divorce proceedings were begun, not least because of the expense involved.
In 2014 the wife received an inheritance, from which she carried out certain minor renovations to the property, at a cost of some £10,000.
The wife also utilised the inheritance money to consult solicitors, with a view to commencing divorce proceedings. In 2015 and 2016, her solicitors wrote to her on several occasions pointing out that the property was still in the joint names of her and the husband, and that the husband had offered to transfer the property to her absolutely.
The divorce proceedings were eventually concluded in 2018, but no further action was taken in relation to the property.
Later in 2018 the husband was declared bankrupt. His trustees in bankruptcy subsequently sought to have the property sold, so that the husband’s share could be used to pay his creditors.
The wife then issued proceedings, claiming that the informal agreement reached between herself and the husband in about 2009 had the effect of transferring the whole property to her, so that the husband no longer had a share.
There then followed complex legal arguments as to whether the agreement could have had that effect. We need not go into the detail of those arguments here. Suffice to say that the court found that it did have that effect, as the husband and wife clearly agreed that the wife should have the whole property, and the wife had acted to her detriment by paying the mortgage and for the renovations, relying upon that agreement.
The wife was successful, but if the facts had been different then the court might have found against her. Obviously, it would have been far preferable if the matter of the property had been properly resolved in 2009, with the property being legally transferred to the wife. There would then have been no question of the husband’s trustees seeking a share of the property.
The lesson from this case is clear: if you are separated from your spouse and have property issues to resolve, you should seek expert legal advice. We can find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.
You can read the full judgment in the case here.
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