Sir, – I noted the article “Informal family loans can be more trouble than they are worth” with interest (Business, May 16th).
Sadly, informal property transactions between family members (and sometimes business partners) are all too common.
The practical advice to document such transactions is age old and very sensible.
While the outcome of every case will turn on its own unique facts, the courts have developed numerous rules over many years which may help a person in these sorts of situations.
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First, a lack of written agreement is not necessarily a bar to someone proving they made a loan or contribution towards a property acquisition. Corroborating material such as bank statements, text messages, and emails can assist. Second, there are certain equitable doctrines (a specific body of legal rules developed to avoid unconscionable outcomes) which may provide a way forward.
A presumption of a purchase money resulting trust may arise where a person contributes funds to the acquisition of land but is not named on the title documents.
If established this would require the beneficial interests in the property to be held on trust by the legal owner in shares proportionate to each party’s contributions.
The presumption may be displaced if a counter-presumption of advancement arises or if there is evidence of contrary intentions, eg a gift. – Yours, etc,
JAMES FAGAN,
Barrister,
London.
